By Md. Joynal Abdin
Bangladesh is located at a very important strategic position in South Asia. It connects the South Asian Association for Regional Cooperation (SAARC) and Association of Southeast Asian Nations (ASEAN) states. You can reach at the doorstep of half of the world population within 24 hours, with a motor vehicle from Bangladesh. That means you have direct access to half of the world market here to build a channel of distribution, especially with consumer goods.
Asian highway and inter SAARC connectivity can make Bangladesh tomorrow’s world business hub between SAARC and ASEAN member states.
The Unparalleled Power of SAARC, ASEAN and China
The current population of SAARC and ASEAN states is about 241 crores, i.e. 33 per cent of the world population. China shares borders with both the regional bodies, i.e. SAARC and ASEAN. China could be a bonus market for the marketer of this region. Total population of SAARC, ASEAN and China is about 379 crores i.e. 51 per cent of current world population. SAARC, ASEAN and China are geographically interconnected and culturally close. This region has potential to lead the economic world in near future. A combined SAARC, ASEAN and China region is much more powerful than any other region of the world.
The total GDP of SAARC and ASEAN is about 5,110 billion USD, i.e. about 6.5 per cent of the world GDP. Another important message is that, 33 per cent of the world population of this region produces only 6.5 per cent of the world’s total products. Productivity of the region is comparatively lower, that is why, this region belongs to the poor people. If we include China, then the total GDP of SAARC, ASEAN and China is about 15,465 billion USD, i.e. about 20 per cent of world GDP. World trade of the SAARC and ASEAN is 3,533 billion USD, i.e. 9.3 per cent of the total global trade in 2014. When we think for SAARC, ASEAN and China, then the amount rises to 7,833 billion USD, i.e. about 20 per cent of the global trade in 2014. China has a large positive trade balance, while most of the countries of this region have negative trade balance.
Similar picture will be found if we consider the list of products, inward FDI flow, export growth, economic growth of SAARC and ASEAN states. China and India have greater product baskets, greater export, and greater FDI inflow, etc. than any other states of the region. Therefore, this region shall include China and India within their development programmes to grow faster. Without these two major economic powers, other states of the SAARC and ASEAN have to struggle more to be developed.
Therefore, it is the right time to align with these powers and work hand in hand for combined development of the entire region.
Scope for Bangladesh to Become Regional Economic Power
Bangladesh has many things to do for capturing the opportunity of being a regional economic corridor of the region. Not only in SAARC or ASEAN, Bangladesh could work with the issue in the Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC), the Asia-Pacific Trade Agreement (APTA) and other platforms. All the major players of both the regions are member of APTA. Our strategic geographical location could help us most, to offer the connectivity through land, sea and even in the air. We have good relationships with all these nations. Now we have to develop our infrastructural facilities like deep sea port, national highways, participating in the Asian highway system and offer a competitive policy to attract investors into this particular process.
Bangladeshi sea ports, especially Mongla Port, are very much eligible to offer economic transport facilities to the land-locked Nepal and Bhutan. Indian north-eastern provinces could be our major partners, for using Bangladeshi ports during their international trade. Bangladesh could offer one-stop service facility for both the local and foreign investors to invest here, manufacture products, sell around the SAARC and ASEAN nations and even export to the western countries, either Europe or America, with our duty free market access facility around the globe.
Establishment of private sea ports is a revolutionary decision for making the port services competitive. But, delay in establishment of deep sea port is holding us back in this regard. We are hesitating to select right partners in many development projects, like the deep sea port. Both the powerful neighbours are willing to work with us in many cases. Why are we not going to establish two deep sea ports, one with the partnership of India and another one with the partnership of China? We are taking unusually long time to enlarge the Dhaka to Chittagong highway into four lanes. Not only Dhaka to Chittagong highway, Bangladesh needs its alternative too. We need eight-lane highways connectivity into all divisional towns to make the land transportation system faster and efficient.
We could emphasise more on developing 177 existing SME clusters, as specialized production area, to meet the local demands and increase export earnings. SME entrepreneurs substituting imports shall get special attention of the government. Foreign investors having interest for joint venture investment could be navigated to these SME clusters.
Not only in road or sea connectivity, Bangladesh has opportunity to establish new airports and a regional transit point for the global citizens. There was a time, when all the South Asian citizens were Singapore-bound, to catch up transit plane. Similarly, Dubai and Doha have established themselves as global transit points. Dhaka shall also try to be a popular transit destination for increasing people’s movement here in Bangladesh. It will increase our acceptability, reputation, FDI opportunity as well as export of products.
It is proved that only policy support or investment incentive is not working at all, to get attention of foreign investors. Organizing investment summit abroad without concrete project proposals failed to give us expected amount of foreign direct investment. Now is the time to think with local investment environment from multiple aspects, like, regulatory regime, required infrastructure, required skilled manpower, related connectivity, adequate market access in home and abroad, transparency of bureaucracy, rule of law, legal and physical security of investors and availability of hassle free logistics etc.
Otherwise, only cheap labour, limited EPZs and literally offered fiscal incentives could not make us a lucrative destination for foreign or even the local investors. Initiative-oriented and time-bound action plan is required to become a regional economic corridor while existing BIMSTEC, APTA, ASEAN and SAARC, etc., platforms could help us in report-building in the meantime.
Md. Joynal Abdin is a researcher and writer, serving at SME Foundation as a Deputy Manager at the Planning, Monitoring & Evaluation Wing, Dhaka Division, Bangladesh.
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