Md. Joynal Abdin
The Financial Express, March 29, 2009
THIS is an era of globalization. The World Trade Organization (WTO) is working hard to ensure free movement of goods and services across the world. No country of the world is self-sufficient; everyone has some advantages and disadvantages. People once used to share their strengths and weaknesses with others for the sake of peaceful living. The modern system of this sharing is multilateral trading system under the umbrella of WTO or regional trade agreement like the EU, ASEAN, SAFTA, APTA, etc. As multilateral trade negotiation in the WTO is getting delayed because of so many issues, countries are moving to regional free trade arrangements, even bilateral free trade arrangements, to make to process quicker.
With the same end in view, Bangladesh-Myanmar Joint Trade Commission (JTC) was formed in 2003 to promote mutual trade and investment among us. In the meantime, two meetings of this JTC were held and some very important trade related issues were initiated in those meetings. But until now, none of the issues has been finalized. We must remember that, in this age of ITC, no opportunity will wait for any one. If someone fails to take the opportunity in time, we must see that it has been taken by any other else. The problems and issues involved in Bangladesh-Myanmar trade negotiation are about:
- L/C opening
- Mutual exchange of gas and fertilizer issue.
- Contract Farming
- Increasing market access of Bangladeshi products into Myanmar.
- Border market and trade exhibition, etc.
Myanmar is a very closed economy; currently it is constrained by different sanctions by the western world. As a result, they are unable to operate their export import in US dollar. On the other hand, banking system in Myanmar is also running with so many limitations due to the same reason. Currently, L/C through a third country is being used for export or import with Myanmar. As Bangladesh has a large trade deficit with Myanmar, it should try to increase its export to Myanmar through Euro or any Asian currency like Singapore dollar among ourselves. Both Bangladesh and Myanmar are members of Asian Clearing Union (ACU). Decisions have been taken to open L/C under ACU umbrella but until now Myanmar banking authorities are not aware about the issue as required. Bangladesh should encourage them through closer discussion at a seminar to be arranged on the sidelines of the forthcoming meeting (3rd JTC meeting on April 07-08, 2009). This scribe thinks one or two seminars are not sufficient to make the process smoother. Bangladesh Bank authority may request the central bank of Myanmar to influence their banks to make L/C system functional without any mistrust. Ministerial level talks may help to make the arrangement quicker.
This line of thinking is useful because of global inflation. Bangladesh may not have sufficient product with only US $ 20,000 for a reasonable consignment. If we do not increase the volume of bank drafts, then businessmen will be bound to issue more bank drafts in several names which will increase the cost of processing business. They must charge it from the consumers so that ultimately our general people will suffer. It must be mentioned here that, under-invoicing, though a bad practice, may be another option to the businessmen, which is liable to decrease government revenue. So we must think of increasing the draft amount to at least US $ 50,000 for all products and more for the essentials.
Currently there is no air or sea connection with Myanmar, but it must be connected so to enhance trade. So far as this scribe’s knowledge goes, India has air link with Myanmar. Bangladesh Biman has air connection with Thailand and Singapore. Thailand-bound planes from Bangladesh can stop in Myanmar for half an hour to connect this route at least for twice a week. According to the decision of the second meeting, Bangladesh is supposed to exchange a list of twenty-five non-conventional vessels to connect it through the seaport. In the meantime, Myanmar has sent its list but Bangladesh Shipping Corporation (BSC) has not provided the list until now on the plea of vessel owners’ lack of interest in it.
The second meeting of JTC also discussed the issue of collecting gas from Myanmar to produce fertilizer for export into Myanmar. But until now this process has not progressed much. The reason is not yet known. The issue should get top priority so that Bangladesh may have some extra gas from Myanmar to meet our gas crisis in Chittagong. Currently, Myanmar may not be interested in it. So here lies a risk of losing the opportunity.
At a friendly talk, it was almost finalized that, Bangladesh can take lease of Myanmar land for cultivation. It was a great opportunity for us. It had the prospect of creating food security and grow shrimp for export as well as develop agricultural farming including poultry and dairy farming. But this golden opportunity might have already been lost due to inefficiency of our agriculture ministry. But India has grabbed this opportunity in the meantime.
It is urgent that Bangladesh should strongly initiate this matter for finalizing it in the current session of JTC meeting. If the ministry is unable to do the same, it can involve the private sector with the matter. For example they can involve the Chittagong Chamber of Commerce and Industry & Cox’s Bazar Chamber with the same.
The country is greatly suffering from shortage of electricity but there is an option to establish a hydroelectric power plant in the hilly region of Rakhain state of Myanmar. This stalk was initiated in the previous JTC meeting. But because of Bangladesh’s sloth in negotiation, it already lost the first preferred hill which was taken by Malaysia to do the same.
Until now, Bangladesh had the opportunity to do so but if proper initiatives are not taken, then the country may lose this chance forever.
Decision was taken to relax Myanmar’s licensing procedure for increasing market share of the country’s pharmaceuticals product. So the forthcoming session should address our other potential sectors as well. Border market can be a very effective tool to enhance bilateral trade between Bangladesh and Myanmar. The Export Promotion Bureau (EPB) of Bangladesh can arrange trade exhibition in Myanmar by involving country’s private sector, especially all potential sectors, to enhance our export to the Myanmar market.
All these issues should be taken seriously by Bangladesh’s decision-makers to utilize the opportunity in time; otherwise others will grab those opportunities.