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Political differences and systems impede regional trade, finds study

While trade connectivity is recognised as a harbinger of economic growth, political complexity and ground realities portray a grim scenario that is divergent from the objectives to enhance cross-border connectivity linkages.

This is according to an independent study on Trade, Transport, and Transit facilitation in the sub-region conducted by the Bhutan Media and Communications Institute (BMCI). BMCI conducted this study in Bhutan as a part of a larger study in the sub region constituting Myanmar, Nepal, Bhutan, India and Bangladesh. The draft findings was shared with about 35 participants from the government, CSOs and private sector agencies during the “Stakeholder’s Discourse on Trade, Transport and Transit Facilitation” in Thimphu on January 31.

It mapped the perceptions of selected stakeholders in Bhutan on the current state of trading with India, Bangladesh and Nepal.

The study stated that timely implementation of projects to develop infrastructures rail, road and port remain a challenge due to political complexity.

For example in the Thimphu-Phuentsholing-Jaigaon-Changrabandha-Burimari-Dhaka corridor, corrupt practices, political and security issues, shortage of manual labourers in Bhutan, absence of power back up, animal and plant quarantine facilities at Jaigaon and trans-shipment are adding to the procedural delays and increase in the cost of trading.

It is also stated that customs rules and regulations and procedures differ from country to country. Absence of testing labs, security at Indo-Bhutan border, illegal trade through land customs station, political misunderstandings and lack of institutional and regulatory reforms, poor road conditions, parking issues, narrow roads and improper water and sanitation facilities at ports are some of the challenges the study identified.

Other challenges include absence of efficient transit mechanisms, lack of integration among various operating agencies at borders, poor internet connectivity at land ports, lack of coordination among different departments and central and state agencies.

For landlocked countries like Bhutan and Nepal, inadequate transit and transport facilitation is an issue. In Bhutan’s case, third country import is dependent on Kolkata port. Trans-shipment and high costs of transporting goods affect the country’s global trade competitiveness.

Some of the major infrastructure issues at the borders at Jaigaon, Changrabandha and Burimari are absence of quarantine facilities, poor condition of approach roads, manual inspection of consignment, absence of proper warehouses and cold storages, absence of Electronic Data Interchange facility, electricity problem and non-availabity of separate restrooms for men and women.

The study also highlighted the need to standardise regional trade agreements with larger developmental agenda and strategic and diplomatic ties.

For the purpose of the study, two trade corridors are selected for Bhutan: Thimphu – Phuentsholling – Jaigaon – Changrabandha – Burimari – Dhaka and Pemagatshel-Samdrupjongkhar-Rongia-Birathnagar.

“Bhutan is dependent on trading to fulfill our basic needs like rice, ready made garments and religious artifacts mostly imported from India, Bangladesh and Nepal,” the study states. “But it is extremely important to find market outside Bhutan to export other goods like apples, gypsum and ferrosilicon for rupee and dollar earnings.”

Through the study, it was also found that livelihood of certain stakeholders like truckers, labourers and support service providers in border towns are directly dependent on the volume of trade. “At the border towns like Phuentsholing and Jaigaon, concerns of people on one side are echoed by people engaged in similar activities on the other side. If one side is affected by political problems then trade on the other side is also affected adversely,” it stated. This means that people and business communities on both sides of border share similar concern but system and procedure makes trading inconvenient.

BMCI director Pushpa Chettri said connectivity has become a core development discourse. “It is a combination of physical infrastructure of essential roads and ports, the soft infrastructure of rules, institutions and skills that help players take part in trade, and the digital infrastructure to connect people to the global marketplace at lower costs,” she said.

Associate Director of Consumer Utility and Trust Society, Kolkata, Prithviraj Nath, said that similar national level dialogues would be held in all five countries apart from regional dialogues.

Tshering Dorji

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