Policy Research Institute - PRI Bangladesh

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Constraints to external trade expansion identified

News Published: Tuesday, May 22, 2012

Constraints to external trade expansion identified

Tuesday May 22 2012
FE Report

FE_PicSpeakers at a roundtable Monday identified poor transportation infrastructure, inefficiency in operation of ports, bureaucratic tangles, power-gas crisis and limited access to land as the main constraints to expansion of external trading activities of Bangladesh. 

Taking a positive note of enormous opportunities for enhancing, strengthening and deepening Bangladesh's trade with the neighbouring countries, they urged all concerned groups including policy makers, civil society and business people to look at business "from the perspectives of business rather than that of politics." 

The discussants expressed such views while taking part in a roundtable on 'Enhancing Trade Facilitation in Bangladesh.'

The discussion was organised by Policy Research Institute (PRI) of Bangladesh in partnership with International Finance Corporation (IFC) in a city hotel. 

Senior Trade Logistics Specialist of IFC William J Gain presented the keynote paper on the occasion. 

PRI Chairman Dr. Zaidi Sattar moderated the programme and Executive Director of the think-tank, Dr Ahsan H Mansur, made the opening statement. 

In his opening statement, Ahsan H Mansur urged all stakeholders to identify the bottlenecks to trade facilitation. 

Addressing the discussion meeting as the chief guest, Anisul Islam Mahmud MP, a former foreign minister, said there were many Doubting Thomases at the birth of Bangladesh as an independent country in the comity of nations, about its economic survival on its own strength. 

"But we have proved our economic prowess and strength before the world …. now Bangladesh is placed among 11th new emerging economies of the world," he said.

Mr Mahmud stressed the need for upgrading and modernising Bangladesh Standards and Testing Institution (BSTI) so that its standards could become acceptable all over the world. 

Responding to the views expressed by a number of discussants in the round-table who identified India's refusal to accept BSTI's certification as a non-tariff barrier, he said, "while our people do not trust BSTI's standards, how Indian businesses can give credence to the same." 

He commended the developments in the country's banking sector, saying, "Our banks have shown their efficiency about providing proper services to the customers, particularly in areas of letters of credit (LCs)". 

He noted that 'access to land' emerged as a matter of serious concern to the investors, actual and potential ones, in Bangladesh. "It is now almost impossible to get a piece of land for setting up a new factory," he said. 

Ahsan Khan Chowdhury, Deputy Managing Director of PRAN-RFL Group, presented a paper on regional trade at the meeting. 

Narrating the experiences of his own farm, Ahsan Khan Chowdhury said though there is no tariff barrier for the Bangladesh exportable items in the market of the country's biggest neighbour India, but there are still a number of non-tariff barriers there. 

"Exporting food or food-processing products to India take too much time due to testing requirements," he said, calling upon the government to initiate policy-level discussions so that India accepts the BSTI's certificates. 

He said, "We have 126 land ports between India-Bangladesh border of which only 18 are in operation." 

Mr Chowdhury also made strong pleas for easing the procedures for opening company branch offices at abroad. "It is very much needed for expansion of country's trade," he felt. 

"Now the government only allows $500 for taking abroad for opening a branch office," he said, adding that not even meeting the running cost of an office is possible with such a paltry amount of money. 

Dr. Mozibur Rahman, Chairman of Bangladesh Tariff Commission, said Bangladesh and India are now holding discussions for a motor vehicle agreement which will allow vehicles to enter directly into each other's territory. 

He also said Bangladesh can earn a large sum of money by letting India to use the services at Mongla and Chittagong ports. 

"India can save Tk 5.0 billion by using Chittagong and Mongla ports….we can earn a good amount of money from India by letting it use those ports," he said. 

In his key-note presentation, William J Gain of IFC put forward a number of recommendations for enhancing of trade facilitation in Bangladesh. The recommendations included automation for issuance of import and export licences and permits, introduction of an online supporting document submission process and proper delineation of valuation and customs appellate procedures in conformity with international standards. 

He also suggested for undertaking an in-depth study of risk management in all land-border crossings and the port of Chittagong with a view to developing an integrated approach to managing risks for border clearance. 

Dr. M. Rahmatullah said infrastructure in the country's eastern part is yet to be developed in the way the same has developed in its western part. For this reason, the country has not yet been able to make much headway in its trade with the north-eastern states of India, he added. 

FBCCI Advisor Manzur Ahmed, PRI Senior Economist Ashikur Rahman and Customs Commissioner Saidul Islam, among others, took part in the discussions.

 

 

Speech