New Nation, Bangladesh
Dhaka-Islamabad economic ties
22 July 2005
Unlike some other regions of the world, trade among the South Asian countries is meagre compared to their trade outside the region. When regional economic groupings such as the Association of Sooth East Asian Nations (Asean) have been reaping the fruits of collective economic interactions, the South Asian region to which Bangladesh belongs is characterized by trade and economic relations with far off countries. Thus, the South Asian countries are unable to maximize their business activities which in turn is leaving an effect in not helping them to achieve faster or greater results in poverty reduction. With much stepped up business activities within the South Asian region, a way can open for accelerated economic activities from which the region’s countries may benefit significantly by increasing their economic growth.
For example, Bangladesh and Pakistan are two neighbours in South Asia. But trade between them is only one per cent of their foreign trade which can be notably higher if the governments and business operators of the two countries take dedicated interests to expand their economic interactions. One way of doing it would be the conclusion of a free trade agreement (FTA) between the two countries. It is expected that free trade lead to substantial inflow of Pakistani capital into Bangladesh’s vital sectors like textiles. Pakistan has been diverting its investments to Afghanistan and central Asian countries but its business leaders consider Bangladesh a more fruitful area for investment considering its comparatively much bigger population and market potential. Besides, such investments-specially in the textiles sector - can prove to be of great value for Bangladesh as support in the form of linkage industries for its export oriented readymade garment (RMG) sector.
From the side of Bangladesh, greater export possibilities to Pakistan as well as establishment of many gainful projects under 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. The signing of the FTA and the creation of the exclusive business forum can be catalysts in swiftly expanding the volume of trade and investment between Pakistan and Bangladesh.
The private sector of 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 plans of the private sectors of the two countries.