Poverty reduction and food bank on BIMSTEC's agenda
Sunday, 21 December 2008
Shahiduzzaman Khan
THE BIMSTEC ministers agreed to devise an action plan for poverty alleviation and set up a food bank in the region in a recent meeting in Dhaka. Follow up actions on the two crucial issues would be discussed at the next ministerial meeting in Kathmandu in the second half of 2009.
The BIMSTEC ministers agreed on the need for a plan of action to be adopted by the seven member nations - Bangladesh, India, Sri Lanka, Thailand, Myanmar, Bhutan and Nepal - for poverty alleviation and decided that Nepal would take the lead in preparing the plan. Each of the member countries will organise events like seminars and conferences on any one of the eight millennium development goals to put forward recommendations on the plan of action. The countries will also examine and share their experiences to find the best means for poverty alleviation.
The ministerial meeting also stressed the need for reviewing other issues recommended by the officials' meeting. These are regional cooperation in coaching of trainers for vocational education, development of horticulture, expanding ICT education, strengthening the health and agriculture sectors to reduce rural poverty, and developing seeds that will help to increase agricultural production as well as be resistant to flood and salinity.
Considering the current global scenario, the meeting renewed the country's commitment to poverty alleviation and recognised the need for regional cooperation for poverty alleviation.
Meanwhile, Chief Adviser, Fakhruddin Ahmed, called upon the BIMSTEC ministers to actively consider the impacts of climate change, global warming and recent price-hike of food on poverty to tackle these challenges collectively. Developed nations should come forward along with the BIMSTEC member countries to successfully overcome these issues, he said. The institutional framework of BIMSTEC member-countries should be devised for intensive and extensive research investigation, and ultimately development of programmes incorporating best practice examples. More focused programmes might be considered for cooperation among the member-countries to have a penetrative impact on poverty reduction.
The BIMSTEC group - Bangladesh, India, Nepal, Bhutan, Sri Lanka, Myanmar and Thailand - started its journey in 1997. It now brings together around 1.4 billion or more than 20 per cent of the world population and represents combined annual GDP of $750 billion. BIMSTEC has potentials for a trade volume to the tune of $50 to 60 billion. The forum provides a unique link between South Asia and Southeast Asia. Many regions of the world had achieved fruitful results in trade, industry, tourism, monetary cooperation and technology transfer resulting in a better life for the people through regional collaborations. It is possible to have a far-reaching impact on poverty reduction and development through regional cooperation.
It is well-known that BIMSTEC countries have varied degrees of experience in reducing poverty. All of them have succeeded in reducing the incidence of poverty. Bangladesh felt that the BIMSTEC has immense potential for creating greater economic interaction, flow of trade and investment among the member states. All member countries need to ensure that this opportunity is not lost. There is a need to develop a strategic action plan to increase agricultural productivity in the short-, medium- and long-terms.
Free Trade Agreement (FTA) is a measure that holds the promise of increasing intra-regional trade. The negotiations for an FTA among the BIMSTEC countries have been going on for quite sometime now. Though it was expected to be concluded and come into effect by July 2006, the FTA is yet be finalised. Such issue should be addressed with a greater sense of urgency, and flexibility and accommodation should be demonstrated to conclude the agreement without delay. BIMSTEC's FTA would be a more meaningful instrument for increasing intra-regional trade if the members were able to remove and dismantle all tariff and non-tariff barriers. The main issue of negotiation was to reduce the negative list of products to enhance trade among the member countries. Thailand and Myanmar want to bring down the negative list to 10 per cent of the total 5,226 tariff lines while others, including Bangladesh and India, want it at 20 per cent. At present, the member countries have 25 per cent items on the list. As per the Thai proposal, a product on the negative list of a particular country should not get duty-free export status in other countries of the grouping.
According to reports, the recent ministerial meeting of the sub-regional grouping took one most important decision relating to introduction of free trade in the region. Initially, it will be trading in goods, then it will be in the services and investment under the free trade agreement (FTA). The volume of intra-regional trade would be increased between $40 and $60 billion every year once complete trade liberalisation takes place under the FTA agreement. Basically, trade will lead to incremental investment, sharing of the benefits of economies of scale and external competitiveness.
However, the BIMSTEC provides a unique link between South Asia and Southeast Asia together having 1.3 billion people or 21 per cent of the world population, a combined gross domestic product (GDP) of $750 billion and a considerable level of complementarity due to geographical contiguity, differing levels of development and resource endowments. A study conducted in 2004 shows the potential of $ 43 billion to $ 59 billion trade under the BIMSTEC FTA.
On the economic front, South Asian countries have been more enthusiastic about opening their domestic markets to countries outside the region rather than to each other. Only 13.3 percent of South Asian total trade is with in the region compared to over 55 percent for ASEAN countries. A small step towards economic integration could translate into net benefits of nearly 1.5 billion dollars. Much greater cooperation as envisaged by the 1993 South Asian Preferential Trade Agreement (SAPTA) could make these gains from cooperation even larger. This would also reduce the extensive smuggling of goods across borders. Greater cooperation will lead to a revolution in the communication and energy sector.
Just as the ASEAN Free Trade Agreement resulted in both greater intra-regional trade and greater foreign investment among South-East Asian nations, so too will be the benefits of BIMSTEC. The agreement carries the great promise of sustainable regional economic growth and development. It also promises to add momentum to the Doha development global trade negotiations, which the World Bank estimates can lift more than 300 million people out of poverty.
The intra-SAARC trade, at present, is a tiny 3.8 per cent of the region's total trade. Can its members push it to 25 per cent which is still small compared to other regional groupings? Given the weak advancement of SAARC, it might be possible to push such trade. But in case of BIMSTEC, it sounds optimistic as the way it is advancing fast. Despite the geographic proximity and certain similarities of economic infrastructure of the South Asian nations, intra-SAARC trade still remains at an extremely unsatisfactory 5.0 percent, compared with 38 per cent within the ASEAN.
Meanwhile, Nepal has agreed in principle to issue three-year business visas to businessmen of BIMSTEC member countries engaged in travel trade with Nepal. The plan was approved when the BIMSTEC regional agreement on the Business Visa Card was being drafted. Nepal is reported to be ready to go ahead with the long-promised facility, which was sought to promote trade, tourism and investment in the bloc. However, the scheme would be enforced only after the bloc approved the regional agreement drafted in this connection. The BIMSTEC Business Visa will remain effective for three years, and allow the visa holder to travel to any BIMSTEC member country and stay there for 90 days at a time.
Indeed, regional economic integration in South Asia and South-east Asia has the potential to become a new engine of growth by helping to exploit the synergies for mutual benefit. BIMSTEC is, indeed, a basic food for that.
................................................................
szkhan@thefinancialexpress-bd.com
THE BIMSTEC ministers agreed to devise an action plan for poverty alleviation and set up a food bank in the region in a recent meeting in Dhaka. Follow up actions on the two crucial issues would be discussed at the next ministerial meeting in Kathmandu in the second half of 2009.
The BIMSTEC ministers agreed on the need for a plan of action to be adopted by the seven member nations - Bangladesh, India, Sri Lanka, Thailand, Myanmar, Bhutan and Nepal - for poverty alleviation and decided that Nepal would take the lead in preparing the plan. Each of the member countries will organise events like seminars and conferences on any one of the eight millennium development goals to put forward recommendations on the plan of action. The countries will also examine and share their experiences to find the best means for poverty alleviation.
The ministerial meeting also stressed the need for reviewing other issues recommended by the officials' meeting. These are regional cooperation in coaching of trainers for vocational education, development of horticulture, expanding ICT education, strengthening the health and agriculture sectors to reduce rural poverty, and developing seeds that will help to increase agricultural production as well as be resistant to flood and salinity.
Considering the current global scenario, the meeting renewed the country's commitment to poverty alleviation and recognised the need for regional cooperation for poverty alleviation.
Meanwhile, Chief Adviser, Fakhruddin Ahmed, called upon the BIMSTEC ministers to actively consider the impacts of climate change, global warming and recent price-hike of food on poverty to tackle these challenges collectively. Developed nations should come forward along with the BIMSTEC member countries to successfully overcome these issues, he said. The institutional framework of BIMSTEC member-countries should be devised for intensive and extensive research investigation, and ultimately development of programmes incorporating best practice examples. More focused programmes might be considered for cooperation among the member-countries to have a penetrative impact on poverty reduction.
The BIMSTEC group - Bangladesh, India, Nepal, Bhutan, Sri Lanka, Myanmar and Thailand - started its journey in 1997. It now brings together around 1.4 billion or more than 20 per cent of the world population and represents combined annual GDP of $750 billion. BIMSTEC has potentials for a trade volume to the tune of $50 to 60 billion. The forum provides a unique link between South Asia and Southeast Asia. Many regions of the world had achieved fruitful results in trade, industry, tourism, monetary cooperation and technology transfer resulting in a better life for the people through regional collaborations. It is possible to have a far-reaching impact on poverty reduction and development through regional cooperation.
It is well-known that BIMSTEC countries have varied degrees of experience in reducing poverty. All of them have succeeded in reducing the incidence of poverty. Bangladesh felt that the BIMSTEC has immense potential for creating greater economic interaction, flow of trade and investment among the member states. All member countries need to ensure that this opportunity is not lost. There is a need to develop a strategic action plan to increase agricultural productivity in the short-, medium- and long-terms.
Free Trade Agreement (FTA) is a measure that holds the promise of increasing intra-regional trade. The negotiations for an FTA among the BIMSTEC countries have been going on for quite sometime now. Though it was expected to be concluded and come into effect by July 2006, the FTA is yet be finalised. Such issue should be addressed with a greater sense of urgency, and flexibility and accommodation should be demonstrated to conclude the agreement without delay. BIMSTEC's FTA would be a more meaningful instrument for increasing intra-regional trade if the members were able to remove and dismantle all tariff and non-tariff barriers. The main issue of negotiation was to reduce the negative list of products to enhance trade among the member countries. Thailand and Myanmar want to bring down the negative list to 10 per cent of the total 5,226 tariff lines while others, including Bangladesh and India, want it at 20 per cent. At present, the member countries have 25 per cent items on the list. As per the Thai proposal, a product on the negative list of a particular country should not get duty-free export status in other countries of the grouping.
According to reports, the recent ministerial meeting of the sub-regional grouping took one most important decision relating to introduction of free trade in the region. Initially, it will be trading in goods, then it will be in the services and investment under the free trade agreement (FTA). The volume of intra-regional trade would be increased between $40 and $60 billion every year once complete trade liberalisation takes place under the FTA agreement. Basically, trade will lead to incremental investment, sharing of the benefits of economies of scale and external competitiveness.
However, the BIMSTEC provides a unique link between South Asia and Southeast Asia together having 1.3 billion people or 21 per cent of the world population, a combined gross domestic product (GDP) of $750 billion and a considerable level of complementarity due to geographical contiguity, differing levels of development and resource endowments. A study conducted in 2004 shows the potential of $ 43 billion to $ 59 billion trade under the BIMSTEC FTA.
On the economic front, South Asian countries have been more enthusiastic about opening their domestic markets to countries outside the region rather than to each other. Only 13.3 percent of South Asian total trade is with in the region compared to over 55 percent for ASEAN countries. A small step towards economic integration could translate into net benefits of nearly 1.5 billion dollars. Much greater cooperation as envisaged by the 1993 South Asian Preferential Trade Agreement (SAPTA) could make these gains from cooperation even larger. This would also reduce the extensive smuggling of goods across borders. Greater cooperation will lead to a revolution in the communication and energy sector.
Just as the ASEAN Free Trade Agreement resulted in both greater intra-regional trade and greater foreign investment among South-East Asian nations, so too will be the benefits of BIMSTEC. The agreement carries the great promise of sustainable regional economic growth and development. It also promises to add momentum to the Doha development global trade negotiations, which the World Bank estimates can lift more than 300 million people out of poverty.
The intra-SAARC trade, at present, is a tiny 3.8 per cent of the region's total trade. Can its members push it to 25 per cent which is still small compared to other regional groupings? Given the weak advancement of SAARC, it might be possible to push such trade. But in case of BIMSTEC, it sounds optimistic as the way it is advancing fast. Despite the geographic proximity and certain similarities of economic infrastructure of the South Asian nations, intra-SAARC trade still remains at an extremely unsatisfactory 5.0 percent, compared with 38 per cent within the ASEAN.
Meanwhile, Nepal has agreed in principle to issue three-year business visas to businessmen of BIMSTEC member countries engaged in travel trade with Nepal. The plan was approved when the BIMSTEC regional agreement on the Business Visa Card was being drafted. Nepal is reported to be ready to go ahead with the long-promised facility, which was sought to promote trade, tourism and investment in the bloc. However, the scheme would be enforced only after the bloc approved the regional agreement drafted in this connection. The BIMSTEC Business Visa will remain effective for three years, and allow the visa holder to travel to any BIMSTEC member country and stay there for 90 days at a time.
Indeed, regional economic integration in South Asia and South-east Asia has the potential to become a new engine of growth by helping to exploit the synergies for mutual benefit. BIMSTEC is, indeed, a basic food for that.
................................................................
szkhan@thefinancialexpress-bd.com