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UNLIKE some other regions of the world, intra-regional trade in South Asia is meagre compared to the trade of the concerned countries with the outside region. But regional economic groupings in other parts of the world such as the Association of South East Asian Nations (Asean) have been reaping the fruits of collective economic interactions. The South Asian region to which Bangladesh belongs remains still characterised by trade and economic relations with the far-off countries. Thus, the South Asian countries are unable to maximise their business activities. This, in turn, is leaving an effect in not helping them to achieve faster or greater results in poverty alleviation. With much stepped-up business activities, a way can open for accelerated economic activities of South Asian countries. The regional countries may then benefit significantly from cooperative endeavours for accelerating the pace of their economic growth.
For example, Bangladesh and Pakistan are two neighbours in South Asia. But trade between them is a pittance; this trade is only one per cent of their foreign trade. This can be notably higher if the government and business operators of the two countries take dedicated interests in expanding their economic interactions. One way of doing it would be the conclusion of a free trade agreement (FTA) between the two countries. As the businesses of the two countries foresee, free trade will pave the way for a substantial inflow of Pakistani capital into Bangladesh into vital sectors like textiles and pharmaceuticals. Pakistan has been diverting its investments into Afghanistan and the central Asian countries. But its business leaders, as the exchanges of the members of the visiting Pakistani trade delegation with their Bangladeshi counterparts in Dhaka do indicate, consider Bangladesh as a more fruitful area for investments. This is so, considering Bangladesh's population and its market potential. Besides, such investments -- specially in the textiles sector -- can prove to be of great value for Bangladesh as supports in the form of linkage industries for its export-oriented readymade garments (RMG) sector.
From the side of Bangladesh, greater export possibilities into Pakistan as well as establishment of many gainful projects under the joint venture framework can open up with the signing of the FTA and taking of other facilitation steps. One major facilitation step -- now under consideration -- is the Bangladesh-Pakistan Business Forum. It was suggested that this body should remain exclusively dedicated to identifying areas of business interactions between the two countries and helping the same in all possible ways. This paper also shares the view that the signing of the proposed FTA and the creation of the exclusive business forum can be the catalysts in swiftly expanding the volumes of trade and investments between Pakistan and Bangladesh.
The visiting Pakistani business delegation has identified certain factors which are directly considered to be the impediments to developing greater economic activities between the two countries in the short term. One such factor is the absence of direct shipping services between them. It is felt that there should be particularly direct shipping services between Chittagong and Karachi to put a pace on bilateral trade. Furthermore, both governments should take measures to simplify cumbersome customs procedures in their trade and add to banking capacities in support of the growing trade that is expected to occur. The businesses in the two countries now seem to be actively engaged in a process of dialogue to mutually further their goals. The governments of Pakistan and Bangladesh need to do all that needs to be done to facilitate the operationalisation of the mutual expansion programmes of the private sectors of the two countries.
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