A recent World Bank study advocated for a bilateral Free Trade Agreement (FTA) between Bangladesh and India as it would bring significant growth in trade between the two next door neighbours. “A bilateral Free Trade Agreement between the two countries could increase Bangladesh’s exports to India by 182 percent, and that of India’s to Bangladesh by 126 percent,” says the study report released on Monday.

According to the report, closer economic cooperation with Bangladesh can be an important stepping-stone for India to reduce the economic isolation of its northeastern states.

On the other hand, if markets were to open up effectively, Bangladesh could increase its exports of leather and ceramic products to India, while India could increase sugar exports to Bangladesh, the report pointed out.

The WB study observed that economic ties between India and Bangladesh were far below the potentials. “Greater access to each other’s markets, improvements in physical connectivity and transit, and energy trade between India and Bangladesh can help unlock this trade potential.”

The report said greater engagement in these areas can also stimulate employment and other economic and social activities, which in turn would help reduce poverty (particularly in the border areas), enhance foreign direct investment (FDI) flows, and generate new business opportunities for the private sector.

“Today, South Asia is one of the least integrated regions in the world. Greater bilateral economic cooperation between India and Bangladesh can serve as a critical step for an integrated South Asia,” said Isabel Guerrero, the World Bank’s vice president for the south Asia region while releasing the report.

India is one of Bangladesh‘s primary trading partners. While Bangladesh has a high trade deficit with India, its imports from Bangladesh have grown more than sevenfold between the year 2001 and 2012, while India’s exports to Bangladesh have grown fourfold.

This notwithstanding, Bangladesh accounts for less than 1 per cnet of India‘s total imports with a small range of items, mostly fertilizers and jute products. Though ready-made garments constitute Bangladesh‘s major global export, their share in exports to India is very small. However, this could change.

To realise this potential, both countries need to further liberalize trade, reduce tariffs (largely in the case of imports into Bangladesh), reduce and remove non-tariff barriers, and reduce trade costs by improving trade facilitation both at borders and inland, the study says.

In fact, the study suggests that the two countries should go beyond trade in goods to deepen cooperation and improve Bangladesh‘s export capability.

To enable larger gains, Bangladesh-India cooperation should go beyond goods trade and include investment, finance, services trade, trade facilitation, and technology transfer.

“This will be a building block toward the larger goal of enhanced regional cooperation” said Sanjay Kathuria, one of the authors of the study and lead economist, regional integration, South Asia region.

The study observes that foreign direct investment would also help bilateral trade between India and Bangladesh. Inflow of direct investment from India would stimulate Bangladesh’s exports, facilitate technology transfer, and generate employment in Bangladesh.

Such investment can also help India gain access to Bangladesh’s market; provide it with a competitive production base; and help India link better with its northeastern states. The energy sector too offers enormous investment and trade opportunities for both countries, particularly in a sub-regional context that includes Bhutan and Nepal.

Lastly, the study points to the very significant potential of trade facilitation. A 10 per cent improvement in the efficiency of clearance processes by border control agencies, including customs, can lead to a 3.9 per cent increase in bilateral trade. A 10 per cent reduction in trade-related documentation can result in a 7.3 per cent increase in bilateral trade. A 1 per cent improvement in overall trade facilitation would result in an almost 4 per cent increase in Bangladesh‘s exports.

“Both governments need to facilitate trade by improving infrastructure at border trading posts, harmonising trade-related documentation, and minimising the restrictive element of non-tariff measures.  With the general decline in tariff barriers, addressing such costs of trading becomes paramount to ensure continued growth of trade that could, in turn, be a major force in poverty reduction, especially in border areas,” Kathuria said.

News: The Daily Independent/Bangladesh/20th-Dec-12

Advocate Md Abdul Hamid, Speaker of the Jatiya Sangsad, visits a blood donation programme in Dhaka recently.

Southeast Bank Limited financed a blood donation programme organised by Service Civil International (SCI)’s Dhaka Unit under the banner of Red Crescent Society in Dhaka recently.

Advocate Md Abdul Hamid, Speaker of the Jatiya Sangsad, attended the programme as chief guest, said a press release.

Mahbubul Alam, Managing Director of Southeast Bank Limited and Golam Rabbany Hiru, Chairman of Benchmark Builders Limited were also present on the occasion.

News: The Daily Sun/Bangladesh/20th-Dec-12

Sheikh Abdul Hai Bacchu, Chairman of BASIC Bank Limited, inaugurates Dohazari branch of the bank in Chittagong Wednesday.

BASIC Bank Limited has opened its 58th and 59th branches with online facilities at Dohazari and Pother Haat in Chittagong Wednesday.

Sheikh Abdul Hai Bacchu, Chairman of BASIC Bank Limited formally inaugurated the branches, said a press release.

Kazi Fakrul Islam, Managing Director of BASIC Bank presided over the inaugural functions while Abdullah Al Noman Beg, Chairman of Dohazari Union Parisad was present as special guest.

News: The Daily Sun/Bangladesh/20th-Dec-12

The Asian Development Bank (ADB) and the government of Bangladesh Wednesday signed a technical assistance (TA) grant agreement of $900,000 for improving the quality, delivery and climate resilience of basic urban services and infrastructure in coastal towns.

The Government of Japan is financing the TA through the Japan Fund for Poverty Reduction. ADB will administer the fund and also provide technical support for project implementation.

The TA will prepare the proposed “Coastal Towns Infrastructure Improvement Project”, which will contribute to improving climate resilience and overall health of selected coastal town populations. Local Government Engineering Department (LGED) of the Ministry of Local Government, Rural Development and Cooperatives will be the executing agency of the project.

Saifuddin Ahmed, Joint Secretary, Economic Relations Division (ERD) signed the agreement on behalf of Bangladesh government and Wahidur Rahman, Chief Engineer signed on behalf of the executing agency at a ceremony at ERD, Sher-e-Bangla Nagar, Dhaka. Stefan Ekelund, Deputy Country Director, signed the agreement for ADB.

“The assistance will lead to improved municipal infrastructure with climate-resilient designs, particularly in water supply, sanitation, and drainage, strengthened local governance, capacity for sustainable service delivery and urban planning while raising awareness in disaster risk preparedness”, said Stefan Ekelund, Deputy Country Director for ADB’s Bangladesh Resident Mission.

ADB, based in Manila, is dedicated to reducing poverty in Asia and the Pacific through inclusive economic growth, environmentally sustainable growth and regional integration. Established in 1966, it is owned by 67 members -- 48 from the region. In 2011, ADB approvals including cofinancing totaled $21.7 billion.

News: The Daily Sun/Bangladesh/20th-Dec-12

Firoz Ahmed Khan, Head of Retail Banking of BRAC Bank Limited, and Asanka Fernando, Country Manage (Bangladesh) Mihin Lanka, exchange documents after signing a MoU in Dhaka recently.

BRAC Bank customers and employees will enjoy special discounts for traveling with Sri Lankan airline, Mihin Lanka.

BRAC Bank and Mihin Lanka have signed a Memorandum of Understanding (MoU) recently, said a press release.

Under the agreement, BRAC Bank Premium and Supreme Customers, Credit Cardholders and all BRAC Bank employees will get special discounted packages for traveling to Sri Lanka and the Maldives. Premium Banking Customers will also avail special services like VIP Lounges at Colombo Airport.

Firoz Ahmed Khan, Head of Retail Banking, BRAC Bank Limited, and Asanka Fernando, Country Manager, Bangladesh, Mihin Lanka, signed the agreement.

Mihin Lanka is a leading airline in Sri Lanka. The airline operates scheduled flights from its hub at Bandaranaike International Airport to a number of cities in the Indian subcontinent, the Gulf States and Southeast Asia.

News: The Daily Sun/Bangladesh/20th-Dec-12