Bangladesh can double its trade in South Asia: WB report
World’s second biggest apparel manufacturer and exporter Bangladesh has the potential to more than double its trade with South Asian nations by exploring intra-regional trade, the World Bank has said in its report published recently. The global lender, in its report said, intraregional trade in South Asia, which remains one of the lowest in the world, has the potential to grow up to three times from US $ 23 billion now, just by removing man-made barriers like tariffs and distrust. The report titled ‘A Glass Half Full: The Promise of Regional Trade in South Asia’ was published jointly by WB and the Policy Research Institute of Bangladesh. The report was launched during an event at Dhaka. Bangladesh’s Finance Minister AMA Muhith was present at the programme. Trade within the South Asian region accounts for about 5 per cent of the region’s total trade, the report says, dubbing it whimsically low against 50 per cent in East Asia and the Pacific. It said the large gaps between actual and potential trade arise because countries in the region have erected barriers against each other. The World Bank identified four critical barriers towards intra-regional trade: tariffs and para tariffs, real and perceived nontariff barriers, connectivity costs, and a broader trust deficit. Sanjay Kathuria, World Bank’s Lead Economist and Lead Author of the report said, “Trust between countries is in short supply in South Asia.” Zaidi Sattar, Chairman of Organising Institution Policy Research Institute, said South Asia has the potential to stimulate rapid growth and economic prosperity in the region and contribute to pulling millions out of poverty. “The region’s trade with the rest of the world is leaping big for the last quarter century. But, the intra-regional trade declined.” The intra-regional trade has come down to 2.5 per cent from 5 per cent, posted before the signing of the South Asian Free Trade Area (SAFTA) agreement in 2004, said Sattar citing a PRI research.
The WB said the costs of trade are much higher within South Asia compared with other regions. The report stated, “The average tariff in South Asia is more than double the world’s average. South Asian countries have greater protection for imports from the region than from the rest of the world.” The report said countries impose high para-tariffs and more than onethird of the intraregional trade falls under sensitive lists, comprising goods not included under the SAFTA’s tariff liberalisation. In case of Bangladesh, nearly 46 per cent of the country’s imports from the region fall under the sensitive lists.
(From left) – Sadiq Ahmed, Vice Chairman of PRI; Qimiao Fan, Country Director of the WB for Bangladesh, Bhutan, and Nepal; AMA Muhith, Finance Minister; Sanjay Kathuria, WB Lead Economist; and Zaidi Sattar, Chairman of Organising Institution Policy Research Institute