VOL NO REGD NO DA 1589

Tuesday, September 13, 2005

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HEADLINE
 
Islamabad proposes multi-modal links to boost trade with Dhaka
AZM Anas
9/13/2005
 

          The economic officials of Dhaka and Islamabad have identified the absence of direct shipping lines and poor business interactions as the two major stumbling blocks to augmenting the bilateral trade between the two countries.
If the two roadblocks are removed, the two-way trade between Bangladesh and Pakistan would reach the mark of US$700-800 million a year, they said Monday as they launched two-day official talks in the city.
The two sides also stressed the need for narrowing down the trade gap, currently in favour of Islamabad, with Pakistani negotiators agreeing to come up with "new measures" to look into the issue of more trade-creating opportunities for the Bangladeshi products and businesses.
Emerging out of the Joint Economic Council (JEC) meeting, visiting Additional Secretary of Economic Affairs Division of the government of Pakistan Ahmed Jawad told the waiting newsmen that the balance in the bilateral trade between Bangladesh and Pakistan was against Dhaka and, for removing this imbalance, "trade volume needs to be enhanced".
"We'll come up with new measures to provide Bangladeshi businessmen a greater scope than before, leading to opening of new fields to do business with their counterparts in Pakistan," the Pakistani bureaucrat said.
But he did not outline the measures for helping Dhaka to offset the trade imbalance.
Bangladesh imported merchandise worth $210 million from Pakistan while it shipped goods -- worth a trifling of $50 million in the fiscal 2004-05. That left a trade gap of $160 million against Dhaka, according to official figures.
Additional Secretary of the Economic Relations Division (ERD) Khwaja Golam Ahmed led the Bangladesh side to the JEC meeting at the ERD auditorium.
The ongoing JEC meet, held after long seven years, illustrates the poor trade and economic relations between the two South Asian countries, trade analysts said.
The last JEC meeting was held way back in 1998.
A Pakistani negotiator also acknowledged this fact, saying if such a meeting could be held on a regular basis, it would serve as "an economic breathing space" for the two countries, both struggling to stave off the crisis under the quota-free global trade regime for textiles and apparels.
However, the two sides agreed to explore the possibilities of undertaking joint-venture projects in textiles, leather, oil and gas, pharmaceuticals, and the information technology (IT).
Agriculture, tourism, education and railway are other potential areas, that were identified by the investors of the two countries for widening the areas of bilateral cooperation, officials told the meet.
Meeting insiders told the FE that the Pakistan side made requests to Bangladesh to procure passenger carriages for the Bangladesh Railway (BR) under the best possible economic terms.
The prices of Pakistani railway carriages are 20 per cent lower than those of China and India, Managing Director of Pakistan Railway Carriage Factory Syed Shahid Ahmed told this correspondent.
Ahmed, who is also a member of the Pakistani delegation, said the Pakistani companies, which have more than three decades of track record in manufacturing railway carriages, have been using the cutting-edge German technology.
Meeting sources said Pakistani companies also offered to impart free training to the BR officials and engineers.
The negotiators discussed the possibilities about the formation of a joint business chamber and holding of regular single country fairs.
On the information technology (IT) front, Pakistan offered to provide technical assistance to develop Bangladesh's technology infrastructure, including the proposed high-tech park at Kaliakoir.
Pakistani investors are also poised to making investments in the Bangladesh's Export Processing Zones (EPZs), which have become the motor of growth for the apparel industry.
Both Bangladesh and Pakistan sides agreed to work in tandem in various international forums to forge greater cooperation between the two member-countries of the South Asian Association for Economic Cooperation (SAARC).
The government of Pakistan has also decided to provide more scholarships to Bangladeshi students in the coming days as a reflection of mutual cooperation, the sources said.
The promotion of trade and investment on an intensified scale between the two South Asian nations dominated the two-day talks.
Asked whether the two sides discussed the issue of a free trade agreement (FTA) between Dhaka and Islamabad, the Pakistani leader replied in the negative.
"This (FTA) is a technical issue. Commerce ministries of the two countries will discuss the issue," Jawad told newsmen, apparently dismissing the local media reports that the JEC would dwell on the bilateral FTA between the two countries.
The two sides will announce a joint statement today (Tuesday) wrapping the JEC meeting, officials said.
UNB adds: Pakistan placed Monday a nine-point proposal and sought ideas from Bangladesh to design a roadmap based on multi-modal interaction links for propping up bilateral trade to one billion US dollars by 2007 from the present paltry volume of only US$100 million a year.
"Our immediate goal is to achieve the target… The target is achievable," Pakistan Prime Minister's Adviser on Finance, Revenue, Economic Affairs and Statistics Salman Shah told reporters after the inauguration of the eighth meeting of Bangladesh-Pakistan Joint Economic Commission (JEC) in the NEC conference room.
Co-chairing the session, he submitted the proposals for discussion in the working sessions of the two-day JEC meeting while his counterpart, Commerce Minister Altaf Hossain Chowdhury said that the agreed minutes would be signed today (Tuesday) morning based on Monday's deliberations.
Setting up a joint business council with a provision for upgrading it to a joint business chamber, enhancing trade and economic interaction, joint venture in textiles, establishing direct shipping links, technical cooperation and holding half-yearly working group meetings are among the proposals mooted by Pakistan.
Pakistan also showed interest in continuing discussions on bilateral free trade agreement (FTA) as a long-term trade relation, besides making the proposals for achieving the short-term target of trade worth one billion dollars.
Salman proposed for the JEC to consider entering into an early- harvest programme in achieving the target through setting up a joint working group to finalise the proposals and to implement the recommendations of the JEC.
As per the plan, the working group would hold meetings every six months - the first one before December and a follow-up meeting in July before the next JEC session, likely to be held in Islamabad in September-October 2006.
Pakistan also proposed to establish special bonded warehouses for stocking products for sale in local markets of the two countries while Bangladesh could use Pakistan as a springboard for the markets of Afghanistan, Central Asia, Iran and the Gulf countries.
"These are some of the thoughts that I wanted to share with you as possible elements for our bilateral economic and trade roadmap for the future. In this connection, we would welcome your ideas," said the Pakistani delegation leader to the JEC.
Replying to a question about lack of direct shipping links between the two countries which is hindering bilateral trade, Salman considered it as an opportunity rather than a problem.
He said it could open up an opportunity to set up a joint-venture shipping company in the private sector, as Karachi-Chittagong could be a profitable route for shipping business.
He called upon the negotiators from both sides at the JEC meeting to frame the roadmap to have a win-win situation for both the countries.
Commerce Minister Altaf Hossain Chowdhury told reporters that the absence of direct shipping link remains at present the major obstacle to the bilateral trade, in the forms of extended timing and expenses involved in merchandise export and import trade.
He said the proposed business council is to examine practically the minor problems more frequently and facilitate bilateral trade.
"It's a good suggestion… We're interested in it," he added.
Bangladesh and Pakistan resumed the JEC meeting after a long lapse of seven years, the last one having taken place in Dhaka May 01-02 in 1998.
Bangladesh had a trade deficit of about $16 million in 2003-04, with its exports to Pakistan at $45 million against imports worth $61 million, according to official figures.
During July-December period of fiscal 2004-05, Bangladesh's exports stood at only $13 million as against its imports from Pakistan at $65 million.

 

 
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