Bangladesh as a regional economic corridor

Bangladesh as a regional economic corridor

Md. Joynal Abdin

The Independent on June 02, 2016

Bangladesh is located at a very important strategic position in South Asia. It connects the South Asian Association for Regional Cooperation (SAARC) and Association of Southeast Asian Nations (ASEAN) states. You can reach at the doorstep of half of the world population within 24 hours with a motor vehicle from Bangladesh. That means you have direct access to the half of the world market here to build a channel of distribution especially with consumer goods. Asian highway and inter SAARC connectivity can make Bangladesh tomorrow’s world business hub between SAARC and ASEAN member states. Current population of SAARC plus ASEAN states are about 241 crores i.e. 33 per cent of the world population. China has border with both the regional bodies i.e. SAARC and ASEAN. China could be a bonus market for the marketer of this region. Total population of SAARC, ASEAN and China is about 379 crores i.e. 51 per cent of current world population. SAARC, ASEAN plus China are geographically interconnected and culturally close. This region has potential to lead the economic world in near future. A combined SAARC, ASEAN plus China region is much more powerful than any other region of the world.

The total GDP of SAARC and ASEAN is about USD 5,110 billion i.e. about 6.5 per cent of the world GDP. Another important message is that 33 per cent of the world population of this region owns produces only 6.5 per cent of the world’s total products. Productivity of the region is comparatively lower that is why this region belongs to the poor people. If we include China that the total GDP of SAARC + ASEAN plus China is about USD 15,465 billion i.e. about 20 per cent of world GDP. World trade of the SAARC and ASEAN is USD 3,533 billion i.e. 9.3 per cent of the total global trade in 2014. When we think for SAARC, ASEAN and China then the amount rises to USD 7,833 billion i.e. about 20 per cent of the global trade in 2014. China has a large positive trade balance while most of the countries of this region have negative trade balance.

Similar picture will be found if we consider the list of products, inward FDI flow, export growth, economic growth of SAARC and ASEAN states. China and India have greater product baskets, greater export, and greater FDI inflow, etc. than any other states of the region. Therefore, this region shall include China and India within their development programmes to grow faster. Without these two major economic powers, other states of the SAARC and ASEAN have to struggle more to be developed. Therefore, it is the right time to align with these powers and work hand in hand for combined development of the entire region.

Bangladesh has many things to do for capturing the opportunity of being a regional economic corridor of the region. Not only in SAARC or ASEAN, Bangladesh could work with the issue in the Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC) or the Asia-Pacific Trade Agreement (APTA), etc. platforms. All the major players of both the regions are member of APTA. Our strategic geographical location could help us most to offer the connectivity through land, sea even in the air. We have diplomatic good relationship with all these nations. Now we have to develop our infrastructural facilities like deep sea port, national highways, and participating in the Asian highway system, offer a competitive policy to attract investors into this particular process.

Bangladeshi sea ports especially Mongla Port is very much eligible to offer economic transport facilities to the land-locked Nepal and Bhutan. Indian north-eastern provinces could be our major partners for using Bangladeshi ports during their international trade. Bangladesh could offer one stop service facility for both the local and foreign investors to invest here, manufacture products, sale around the SAARC, ASEAN nations even export to the western countries either Europe or America with our duty free market access facility around the globe.

Establishment of private sea ports is a revolutionary decision for making the port services competitive. But delay in establishment of deep sea port is lagging us behind in this regard. We are hesitating to select right partners in many development projects like the deep sea port. Both the powerful neighbours are willing to work with us in many cases. Why we are not going to establish two deep sea ports one with the partnership of India and another one with the partnership of China? We are taking unusually huge time to enlarge the Dhaka to Chittagong highway into four lanes. Not only Dhaka to Chittagong highway Bangladesh needs its alternative too. We need eight lanes highways connectivity into all divisional towns to make the land transportation system faster and efficient.

We could offer more emphasis to develop existing 177 SME clusters as specialized production area to meet the local demands and increase export earnings. Import substituting SME entrepreneurs shall get special attention of the government. Foreign investors having interest for joint venture investment could be navigated to these SME clusters.

Not only in road or sea connectivity Bangladesh has opportunity to establish new airports and a regional transit point for the global citizens. Once all the South Asian citizens were Singapore-bound to catch up transit plane. Similarly Dubai and Doha have established themselves as global transit points. Why not Dhaka, Dhaka shall try to be a popular transit destination for increasing people’s movement here in Bangladesh. It will increase our acceptability, reputation, FDI opportunity as well as export of products.

It is proved that only policy support or investment incentive is not working at all to get attention of foreign investors. Organizing investment summit abroad without concrete project proposals failed to give us expected amount of foreign direct investment. Now is the time to think with local investment environment from multiple aspects like, regulatory regime, required infrastructure, required skilled manpower, related connectivity, adequate market access in home and abroad, transparency of bureaucracy, rule of law, legal and physical security of investors, availability of hassle free logistics etc.

Otherwise only cheap labor, limited EPZs, literally offered fiscal incentives could not make us a lucrative destination for foreign even for the local investors. New initiative and time bound action plan is required to become regional economic corridor while existing BIMSTEC, APTA, ASEAN, SAARC, etc., platforms could help us in report building in this regard.

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Md. Joynal Abdin

Development Researcher, Columnist and Author

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