Dhaka’s trade with SA region to double if barriers removed: WB

The WB report titled ‘A Glass Half Full: The Promise of Regional Trade in South Asia,’ launched on Wednesday. Photo: Collected
The WB report titled ‘A Glass Half Full: The Promise of Regional Trade in South Asia,’ launched on Wednesday. Photo: Collected

A ‘broader trust deficit’ among the South Asian countries still remains one of the major barriers to increasing intra-regional trade, a World Bank report has found.

Bangladesh, it says, has the potential to more than double its trade with the regional countries.

Overall, trade within the South Asia can grow three times, from $23 billion to $67 billion, if man-made trade barriers are reduced, according to the WB report titled ‘A Glass Half Full: The Promise of Regional Trade in South Asia,’ launched on Wednesday.

The global agtency, however, has identified four critical barriers to regional trade – “tariffs and para tariffs, real and perceived non¬tariff barriers, connectivity costs, and a broader trust deficit.”

“Trust between countries is in short supply in South Asia,” said Sanjay Kathuria, WB lead economist and lead author of the report.

He mentioned that border haats between Bangladesh and India, aimed at recapturing the once thriving economic and cultural relationships are now changing cross-border relations.

“Haats are not just about trade. They are about using trade to foster people-to-people connect and trust. South Asian policymakers can aim to reinforce the virtuous circle between trade and trust – the experience of Bangladesh-India border haats offer several useful insights in this context,” the WB economist added.

The WB report said intraregional trade in South Asia remains one of the lowest in the world and accounts for about five per cent of region’s total trade, compared with 50 per cent in East Asia and the Pacific.

Bangladesh’s trade with South Asia is only nine percent of its global trade, the report pointed out.

“Bangladesh can become an economic powerhouse by deepening regional and global integration in trade, connectivity, energy and investment,” said WB country director Qimiao Fan.

“For increased regional trade, the country needs to focus on improving its trade policy regime, which currently has a strong anti-export bias.”

The costs of trade are much higher within South Asia compared with other regions: the average tariff in South Asia is more than double the world average, said the report.