Ongoing foreign-currency shortage has severely hindered border trade between neighbouring Bangladesh and Myanmar, according to official documents.
The documents, prepared by the Bangladesh Embassy in Myanmar, highlight the potential consequences of the greenback crisis, suggesting that it may lead to an increase in illegal money transactions such as 'hundi'.
The Bangladesh Embassy in Myanmar has cited the decline in Rui fish imports from Myanmar as a demonstration of the challenges faced in border trade between the two countries.
According to the embassy's reports, Myanmar exported over 1,000 tonnes of Rui fish to Bangladesh in January of this year, generating revenue of US$2.5 million. However, the volume of exports dropped to onlyaround 200 tonnes in March.
The reports note several recommendations aimed at addressing the issue, including the upgrading of the Teknaf port and arranging deals between banks in both countries to facilitate trade.
According to the Bangladesh mission, state-run Sonali Bank, which has been facilitating money transfers for Myanmar-Bangladesh border trade, has reported depletion of US dollars. Consequently, the bank has ceased issuing them since the last week of March. Similarly, Agrani Bank has restricted funds citing a software issue.
The border trade between Bangladesh and Myanmar, specifically through the Teknaf and Sittewa border points, has raised concerns regarding the issuance of Foreign Demand Drafts (FDDs) regulations by the Bangladesh Bank.
The FDDs are required to be exclusively issued by Sonali Bank's Teknaf branch, causing undue pressure on the branch and resulting in an imbalance in its financial position, according to the Bangladesh mission.
To exacerbate the issue, sources have confirmed allegations of corruption, as branch authorities allegedly charge additional fees for issuing bank drafts.
The Bangladesh mission has emphasised that this practice not only strains Sonali Bank's Teknaf branch but also fosters an environment conducive to corruption.
The mission further recommended distinguishing cargo movements through the Teknaf border as international trade, thereby aligning the treatment and regulations for such transactions accordingly.
It also suggested designating the Teknaf port as an international port to facilitate international trade operations.
Besides, the mission proposed the signing of a bilateral memorandum of understanding (MoU) between private or state-owned banks from both countries. This deal would aim to streamline trade processes and enhance trade facilitation measures.
The documents disclosed that Myanmar faces no obstacles when conducting international trade through the Sittewa port. Treating cargo movement via Teknaf as international trade would not only promote transparency but also simplify trade operations for businesses on both sides of the border.
Consequently, exporters and importers would be able to obtain Foreign Demand Drafts from any branches of Sonali Bank in Bangladesh.
Underscoring the significance of trade between the two countries, the Bangladesh mission mentioned that thousands of tonnes of agricultural products are exchanged annually through the ports, with exports valued at US$ 5.58 million and imports valued at US$ 0.12 million from October to December 2021.
The traded goods between Bangladesh and Myanmar encompass bamboo, ginger, peanuts, saltwater prawns, fish, blankets, candy, plum jams, footwear, frozen foods, dried plums, garlic, rice, mung beans, chemicals, leather, jute products, tobacco, plastics, wood, knitwear and beverages.
Total imports from Bangladesh to Myanmar in the fiscal year 2018-2019 amounted to US$90.91 million, while the export was US$25.11 million.
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