Bangladesh has made limited progress on reducing trade costs with its south and south-west Asian neighbours, says a new United Nations report.
However, it said, the country relatively made more progress as compared to its East and North-East Asian partners.
When tariff costs are excluded, trade costs between Bangladesh and the United States are only slightly higher than those between Bangladesh and some of the other south Asian countries, suggesting further room for intra-regional trade facilitation, according to the report of United Nations Economic and Social Commission for Asia and the Pacific (UNESCAP) launched in Bangkok last week.
Bangladesh ranks 137th out of 179 countries, according to the ESCAP International Supply Chain Connectivity Index – a new index released on the occasion of the Asia Pacific Trade and Investment week which captures the extent of a country’s facilitation of import and export process as well as access to efficient maritime services.
Dhaka Chamber of Commerce and Industry (DCCI) and Bangladesh Foreign Trade Institute (BFTI) jointly organised a discussion on the report in Dhaka on Saturday.
BFTI Chief Executive Officer M Mojibur Rahman said Bangladesh needs policy consistency and political stability to ensure a sustainable economic development.
He urged all political parties to keep transportation of industrial goods and other supply chain management relating to trade and commerce out of the purview of political activities.
He emphasised on reducing trade cost and bank loan interest to help boost business further. “BFTI is working on formulating a coordinated trade policy.”
DCCI President Sabur Khan called for harmonisation of common standard in Asia and the Pacific region. He also emphasised on trade and export-led economic growth in the region.
He also stressed on considerable use of ICT in the banking sector and urged for making intellectual property acts more effective.
He said the government should frame more investment friendly policies to attract FDI and develop SMEs. “We’ve to enhance regional cooperation to enjoy the essence of international free market economy.”
The report forecasts the export growth of Asia-Pacific region will remain over 5% in 2013 and 6% in 2014.
Developing countries in the region attracted over 33% foreign direct investment (FDI). Reducing the cost of international trade transactions has become a priority for the governments intent to facilitate the effective integration of firms in regional and global production networks, the report suggested.
Along with improving availability and access to trade related infrastructure, cutting red tape and streamlining trade processes have become essential both to maintain competitiveness and enable smaller player to benefit.
The Asia-Pacific region continues to face the risks and uncertainties associated with sluggish economic recovery in developed countries and rebalancing in China and other large emerging economies, according to the report.
Developing countries in the region account for 33% of global foreign direct investment (FDI) inflows, reflecting the established position of the region as a leading investment destination.
FDI inflows to the east and north-east Asian sub-region were $215bn in 2012, down 8% from the previous year. The decline can be attributed to weaker inflows to China, the Republic of Korea and Hong Kong, China.
China, however, continues to attract impressive levels of FDI – investments in 2012 totalled $121bn.
The report provides an independent analysis of regional trends and developments in trade and investment; trade facilitation; usage of protectionist measures; and preferential trade policies and agreements.
It uses macroeconomic analysis as well as regional and sectoral case studies to explore the complementary policies needed for trade and investment to produce more inclusive outcomes.
Among these policies are to increase investment in infrastructure; improve ICT connectivity; widen access to education, especially for women; and promote balanced labour market policies that enhance productivity and recognise international labour standards.