The FINANCIAL — Bangladesh on December 7 signed a $150 million financing agreement with the World Bank to modernize trade related infrastructure, systems, and procedures. These improvements will help Bangladesh increase regional connectivity and trade with India, Bhutan, and Nepal.
The Bangladesh Regional Connectivity Project 1 will develop and improve four land ports – Bhomra, Sheola, Ramgarh, and Benapole. These land ports are key to facilitating regional and transit trade, especially with India. These improvements will help Bangladesh increase trade and freight volumes and reduce truck clearance time at border posts. For example, truck clearance time at Bhomra land port will be reduced by 83% — from 72 hours to 12 hours, according to the World Bank.
“Bangladesh has enormous potential to increase trade with its neighbors, particularly India. Currently, its trade with India is only less than half of its current potential,” said Qimiao Fan, Country Director for Bangladesh, Bhutan, and Nepal. “By addressing the key barriers to trade, especially transport and clearance delays, Bangladesh can become more competitive regionally and globally, and reach more emerging and dynamic markets with diversified product mix, including higher-value garments.”
The project will develop a National Single Window, which will allow traders to submit all import, export and transit information required by Customs and other key regulatory agencies via a single electronic gateway. This will facilitate faster and more transparent international trade procedures and reduce transaction time and cost for the private sector.
“Bangladesh has doubled its world market share in exports between 1995 and 2012, and more than
doubled in value in the last five years. But, the potential is much higher,” said Kazi Shofiqul Azam, Secretary, Economic Relations Division, Government of Bangladesh. “Geographically, Bangladesh can play an important role in regional trade and logistics networks, and as a transit country in South Asia. The project will help Bangladesh take advantage of its strategic location to increase exports and lower import costs.”
Further, the project will pilot activities to help remove bottlenecks faced by women in trade and business. To bring more women traders into formal trade networks and global value chains, the project will pilot skills development programs and analyze and eventually develop specific infrastructure, logistics and transport services for women.
Kazi Shofiqul Azam and Qimiao Fan signed the agreement at the Economic Relations Division.
The credit is from the International Development Association (IDA), the World Bank’s concessional lending arm. The credits are interest-free and repayable in 38 years, including a 6-year grace period, and carry a service charge of 0.75 percent. The World Bank was among the first development partners to support Bangladesh following its independence. Since then the World Bank has committed more than $26 billion in grants and interest-free credits to Bangladesh. In recent years, Bangladesh has been one of the largest recipients of the World Bank’s interest-free credits.