ADB identifies roadblocks to investment growth, regional cooperation
Saturday, 14 May 2011
Doulot Akter Mala
Asian Development Bank (ADB) has identified 11 areas as roadblocks to investment growth and regional cooperation, which include lack of rail and road infrastructures, maintenance, power, air cargo, inland container depots and port capacities as well as policy barriers. The multilateral development partner has conducted a thorough study on Bangladesh, Nepal, Bhutan and north-east region of India to find out the potentiality of and the hindrance to intra-regional trade. Technical assistance consultants' report on 'South Asia Strategic Framework for Aid for Trade Roadmap,' financed by Bangladesh Investment Climate Fund (BICF) said these recently. Hans-Peter Brunner, team manager of the project and also senior economist of the ADB, prepared the report with the cooperation of other team members of different countries including Bangladesh, the USA, the Philippines, India, Nepal and Bhutan. The report has focused on different roadblocks to regional trade in Bangladesh, northeast India, Nepal and Bhutan. "Bangladesh faces severe constraints with regard to physical infrastructure for production and trade. The country has to make substantial improvements in its road and rail networks," the report said. It suggests upgradation of the rail lines to broad gauge from metre gauge to enhance the capacity of freight handling. The report said trade through land ports can be increased by providing logistic support, improving connectivity and communication links. It also recommended that the government enhance container handling capacities at the sea ports of Chittagong and Mongla. To facilitate export of perishable agro products, it also suggests improving the capacity of air cargo services. It said the manufacturers of the country are using fossil fuels for power from generators due to unreliable power networks. "This not only adds to the production costs but also creates pollution and CO2 emission," the report added. The ADB report focused on the need for adequate export financing to boost footwear export. It also suggested that the government address higher tariff and non-tariff barriers and rent-seeking to ensure smooth regional trade. The report said Bangladesh has the highest tariff value in South Asia. The country also needs to improve quality assurance process and should provide facilities for products testing in order to remain attractive in the international market, particularly western Europe and the USA, the report said. The ADB report has found a total of 89 projects taken up by Bangladesh, Nepal and Eastern India including two regional projects to develop infrastructure for future transit and trade. Of the projects, 39 are for transport sector infrastructure while 21 for agriculture and 16 for energy. "Bangladesh finds itself in a strategic location with regard to facilitating trade from the region through its two seaports -- Chittagong and Mongla. The regional projects under South-Asia Sub-regional Economic Cooperation (SASEC) aim at connecting Nepal and Bhutan through Kakavitta and Phuentsholling respectively to Mongla and Chittagong ports," the report said. The ADB expects that the new link will help reduce goods' transit time by decongesting Kolkata port. It said access to Chittagong port would provide a great fillip to the region's exports. The ADB report identified highest four export products for Bangladesh that included sea food, leather, medicinal plants and ceramic flatware. It has pointed out favourable environment, labour, traditional processing for trade of those products. It has pointed out small firms, fragmented supply chain, uneven quality control, insufficient supply of skin over the year and variable quality of skins as disadvantage for trading of those products.
Asian Development Bank (ADB) has identified 11 areas as roadblocks to investment growth and regional cooperation, which include lack of rail and road infrastructures, maintenance, power, air cargo, inland container depots and port capacities as well as policy barriers. The multilateral development partner has conducted a thorough study on Bangladesh, Nepal, Bhutan and north-east region of India to find out the potentiality of and the hindrance to intra-regional trade. Technical assistance consultants' report on 'South Asia Strategic Framework for Aid for Trade Roadmap,' financed by Bangladesh Investment Climate Fund (BICF) said these recently. Hans-Peter Brunner, team manager of the project and also senior economist of the ADB, prepared the report with the cooperation of other team members of different countries including Bangladesh, the USA, the Philippines, India, Nepal and Bhutan. The report has focused on different roadblocks to regional trade in Bangladesh, northeast India, Nepal and Bhutan. "Bangladesh faces severe constraints with regard to physical infrastructure for production and trade. The country has to make substantial improvements in its road and rail networks," the report said. It suggests upgradation of the rail lines to broad gauge from metre gauge to enhance the capacity of freight handling. The report said trade through land ports can be increased by providing logistic support, improving connectivity and communication links. It also recommended that the government enhance container handling capacities at the sea ports of Chittagong and Mongla. To facilitate export of perishable agro products, it also suggests improving the capacity of air cargo services. It said the manufacturers of the country are using fossil fuels for power from generators due to unreliable power networks. "This not only adds to the production costs but also creates pollution and CO2 emission," the report added. The ADB report focused on the need for adequate export financing to boost footwear export. It also suggested that the government address higher tariff and non-tariff barriers and rent-seeking to ensure smooth regional trade. The report said Bangladesh has the highest tariff value in South Asia. The country also needs to improve quality assurance process and should provide facilities for products testing in order to remain attractive in the international market, particularly western Europe and the USA, the report said. The ADB report has found a total of 89 projects taken up by Bangladesh, Nepal and Eastern India including two regional projects to develop infrastructure for future transit and trade. Of the projects, 39 are for transport sector infrastructure while 21 for agriculture and 16 for energy. "Bangladesh finds itself in a strategic location with regard to facilitating trade from the region through its two seaports -- Chittagong and Mongla. The regional projects under South-Asia Sub-regional Economic Cooperation (SASEC) aim at connecting Nepal and Bhutan through Kakavitta and Phuentsholling respectively to Mongla and Chittagong ports," the report said. The ADB expects that the new link will help reduce goods' transit time by decongesting Kolkata port. It said access to Chittagong port would provide a great fillip to the region's exports. The ADB report identified highest four export products for Bangladesh that included sea food, leather, medicinal plants and ceramic flatware. It has pointed out favourable environment, labour, traditional processing for trade of those products. It has pointed out small firms, fragmented supply chain, uneven quality control, insufficient supply of skin over the year and variable quality of skins as disadvantage for trading of those products.