Efficient RTAs key to unlocking Bay potentials: CPD
Our unique geographical location is an asset, she added at the event jointly organised by the CPD and the Embassy of Japan in Dhaka at the embassy premise
Establishing effective Regional Trade Agreements (RTAs) is crucial to capitalise on market opportunities and trade potential in countries neighbouring the Bay of Bengal, Centre for Policy Dialogue (CPD) said in a seminar today (10 March).
"No region can prosper without connectivity. The Association of Southeast Asian Nations [ASEAN] and the European Union are best examples of how to utilise trade potentials by collaborating with each other," Dr Fahmida Khatun, executive director of CPD, said, adding that the country's unique geographical location is an asset.
She made the remarks at the seminar titled "Multilayer connectivity in the Bay of Bengal: Positioning Bangladesh as an economic hub." The event was jointly organised by the CPD and the Embassy of Japan in Dhaka at the embassy premise.
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Syed Yusuf Saadat, research fellow at CPD, presented key insights into the untapped trade potentials in the Bay of Bengal region, including Bangladesh, North East India, Nepal, and Bhutan.
He stressed the significance of improving the investment climate, tackling behind-the-border barriers, enhancing skills, providing financing for small and medium enterprises, and investing in trade and digital infrastructure in Bay of Bengal economies to promote industrial value chains and establish the region as an economic hub in Asia.
"Efficient RTAs include standard preferential tariff structures, rules of origin, smooth supply chain operations, digital trade processes, trade facilitation across borders and strong dispute resolution mechanisms," he explained.
Implementing trade liberalisation in five south Asian nations could potentially boost Bangladesh's real GDP by 1.44 times and aggregate employment by 6.16%, he said referring to a research.
Referring to an annual survey, the Chief Country Representative of Japan External Trade Organization (JETRO) Yuji Ando expressed that there was significant interest from Japanese companies in investing in Bangladesh but noted challenges compared to India.
"Despite investment opportunities, India holds certain advantages over Bangladesh," he said. Challenges include the development of value chains between Bangladesh and India, as well as issues related to infrastructure development and mutual access for vehicles, he added.
However, initiatives such as the bilateral Comprehensive Economic Partnership Agreement (CECPA) and the development of the Matarbari deep-sea port are expected to enhance connectivity and facilitate trade, he further added.
Dr Kabir Ahmed, chairman and managing director of Conveyor Logistics Ltd, raised concerns about the logistics sector's readiness for the operationalisation of the Matarbari deep-sea port. He stressed the need for additional policies at the regional level to fully leverage Matarbari's advantages.
Ichiguchi Tomohide, chief representative of Japan International Cooperation Agency (Jica), highlighted the importance of the Moheshkhali-Matarbari Integrated Infrastructure Development Initiative (MIDI) for multi-layered connectivity in the Bay of Bengal.
"Under the leadership of Moheshkhali Integrated Development Authority, there are plans to develop the economic zone, township, logistics and transport, and utilities," he added.
He also emphasised the potential of the Matarbari port to become a central hub for energy, power, logistics, and industry.
While talking about the challenges in the investment climate in Bangladesh, Jica Chief focused on low foreign direct investment (FDI) flow, low labour productivity, and dependence on readymade garments (RMG) as major export items.
"Industry diversification is needed for promoting FDIs. Unpredictable tax rules, complicated licensing procedures, complicated custom procedures, lack of industrial clusters and insufficient cargo handling are the challenges for higher FDIs," he added.
Pranay Verma, high commissioner of India to Bangladesh, stressed efficient connectivity, including the restoration of historical routes and agreements on port usage.
Quoting a study, the Indian envoy said, "Seamless transport connectivity, along with improved trade and transport regulations and infrastructure between India and Bangladesh, has the potential to increase Bangladesh exports to India by almost 300 percent."
"Increasing Bangladesh exports to India is one of the priorities of our trade relations with Bangladesh as the country makes the important economic graduation to become a developing country in 2026," he said.
"We are going to slowly start negotiating the Comprehensive Economic Partnership Agreement (CEPA) through which both countries will be able to harness each other's growing trade potentials," he further added.
Md Mosharaf Hossain, Director of Trade, Investment, and Development at the Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC), shed light on the commitment to establishing a seamless transport network. He mentioned initiatives such as the BIMSTEC Motor Vehicle Agreement and maritime cooperation as crucial steps toward enhanced connectivity.
Ahasanul Islam Titu, MP, State Minister for Commerce was the chief guest at the seminar.
Other speakers at the seminar were Iwama Kiminori, Japanese Ambassador to Bangladesh; former foreign secretary Shahidul Haque; Sonoko Sunayama, principal public sector management specialist, sectors group, Asian Development Bank (ADB).
