B’desh bullish on South Asia integration for growth

• B’desh backs stronger cooperation between neighbours
• Advocates for reduced trade expenses, links by port, rail and road
• Wants FTA expedited, negotiations to kick off by Sept. end

By Divya Thotawatte

Bangladesh is dedicated to leading the charge to integrate better with regional economies as it would benefit from stronger growth in South Asia, a top Bangladeshi official said recently, advocating for Sri Lanka and Bangladesh to maximise on complimentary opportunities.       

Bangladesh Investment Development Authority (BIDA) Executive Chairman Kazi M. Amnul Islam speaking at a seminar titled ‘Investment Opportunities in Bangladesh’ organised by the Shippers’ Academy Colombo in collaboration with the Bangladesh High Commission, said that Bangladesh was one of the fastest growing countries in one of the fastest growing regions in the world.

“But at the same time South Asia is less integrated. Therefore we have a lot of work to do, and in Bangladesh we like to take the initiative to integrate with the countries that are also developing in the South Asian region,” he added.

South Asia is one of the most dynamic regions in the world, with a population of 1.67 billion people and economic growth on average of 7.1% over the last decade. But historical political tensions, trust deficit, cross-border conflicts and security concerns contribute to a low-level integration in the region, experts have pointed out.

Currently, South Asia is one of the least integrated regions. Intra-regional trade accounts for only 5% of South Asia’s total trade, compared to 25% in Association of South-East Asian Nations (ASEAN). Intra-regional investment is lesser than 1% of overall investment, according to the World Bank.

Bangladesh High Commissioner to Sri Lanka Riaz Hamidullah also speaking at the event attributed the lack of integration as one reason why cost of trade remains high in the region. He remarked that the cost of transportation is a major deterrent to improving trade between South Asian countries.

“Transporting goods is cheaper to Brazil from Bangladesh than to Pakistan. Therefore the cost of transportation is a major obstacle for enhancing intra-regional trade,” he explained also suggesting that Colombo port could facilitate trade between Bangladesh and Western India. “If we can look afresh at existing policy frameworks in our countries we could turn things to our own betterment. That would again affect the intra-regional regional trade. That will help us to move beyond the 5% intra-regional trade because it will directly affect costing. That will also help us to move on to the bilateral FTA that we are trying to unlock.”

Hamidullah also said that as the joint feasibility study on the FTA is close to completion, negotiations on the planned Sri Lanka-Bangladesh Free Trade Agreement (FTA) are likely to begin by the end of next month. The High Commissioner also stressed on the importance of connectivity if Sri Lanka wants to position itself as the hub of the Indian Ocean. “We should unlock the Bay of Bengal as a zone of growth and prosperity by connecting our growth zones and ports in every possible manner through railway, roads and through sea lines. So far we only try to connect ports in Sri Lanka, and that is not enough,” he said.

The Bangladesh government plans to establish 100 economic zones to attract investment with about a dozen to be managed by the private sector. The officials also outlined extensive measures proposed by the Bangladeshi regulators to attract investment from Sri Lanka to the sectors of apparel, insurance, financial services, pharmaceuticals and tourism.

Pix by Lasantha Kumara