Bangladesh gets $753m for trade, connectivity

The World Bank yesterday approved a $1.03 billion financing to help improve regional trade in Bangladesh and Nepal by reducing trade and transport costs and transit time along the regional corridors.

The Accelerating Transport and Trade Connectivity in Eastern South Asia (ACCESS) Programme Phase-1 will help the governments address the key barriers to regional trade — manual and paper-based trade processes, inadequate transport and trade infrastructure, and restrictive trade and transport regulations and processes.

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The Phase-1 will help replace lengthy manual and paper-based trade processes with digitalised automated solutions in Bangladesh and Nepal, said the WB in a press release.

The automation will enable faster border crossing times and install electronic tracking of truck entry and exit, electronic queuing, and smart parking.

The programme will also help improve selected road corridors and upgrade key land ports and custom infrastructure while ensuring a green and climate-resilient construction. It will help the integration of landlocked Nepal and Bhutan with the gateway countries of Bangladesh and India.

Regional trade offers enormous untapped potential for the countries of South Asia. But regional trade accounts for only 5 per cent of South Asia’s total trade, while in East Asia, it accounts for 50 per cent.

“South Asia can boost economic growth significantly and create opportunities for millions of people by increasing regional trade and connectivity,” said Hartwig Schafer, vice-president of the WB for South Asia.

On the Bangladesh side, the $753.45 million ACCESS Project will upgrade the 43km two-lane Sylhet-Charkai-Sheola road to a climate-resilient four-lane road, connecting the Sheola Land Port with the Dhaka-Sylhet Highway. This will cut down travel time by 30 per cent.

The project will support digital systems, infrastructure, and more streamlined processes at Benapole, Bhomra, and Burimari land ports, the three largest land ports in Bangladesh handling approximately 80 per cent of land-based trade.

It will also support the modernisation of the Chattogram customs house, which handles 90 per cent of all import and export declarations in Bangladesh.

While the trade between Bangladesh, Bhutan, India, and Nepal grew six times from 2015 to 2019, the unexploited potential for regional trade is estimated at 93 per cent for Bangladesh, said Mercy Tembon, country director of the WB for Bangladesh and Bhutan.

“The project will help Bangladesh improve regional trade and transport and automation of processes will build resilience to crises like the Covid-19 pandemic.”

On the Nepal side, the $275 million ACCESS Project will upgrade the 69km two-lane Butwal-Gorusinghe-Chanauta road, along the East-West Highway, to a climate-resilient four-lane highway. This is expected to reduce travel time by 30 per cent, thus providing better access to India’s western seaports.

“Nepal has large untapped potential for regional trade and exports. Low regional trade is often a result of the high cost of connectivity,” said Faris Hadad-Zervos, country director of the WB for the Maldives, Nepal and Sri Lanka.

The programme will also help advance Bangladesh and Nepal’s preparedness and subsequent implementation of the Motor Vehicle Agreement. The second phase of the programme will include Bhutan.

“A key focus of the ACCESS programme is to support solutions that can most effectively reduce dwell times at trade gateways, which is vital to lowering trade costs. This entails greater border cooperation and coordination within and between countries, cutting down the physical inspection of goods, and simplifying regulations and processes,” said Erik Nora, task team leader of the programme.