Prospects of economic cooperation between Bangladesh and Burma
The Independent Bangladesh
by Syed Mahmudul Huq
The geographical proximity between Bangladesh and Myanmar has made the two countries logical and ideal partners for harnessing natural resources to their mutual advantage. The two countries stand on the borders of two regional blocks must be taken into account. The two countries can make the most out of the proposed ASEAN Free Trade Area (AFTA) and South Asian Free Trade Area (SAFTA).
A general trade agreement between Bangladesh and Myanmar was signed on August 3, 1973 which is renewable every year. On June 1, 1989 three MOUs were signed on border trade, economic cooperation providing for joint ventures (government to government, governmentprivate and privateprivate) and cooperation between private sector (FBCCI and UMCCI). Building on these, the border trade protocol was signed on May 18, 1994.
However, border trade formally began on September 5, 1995.Areas of cooperation and opportunities are plenty between the two neighbourly countries. For the moment the focus is on border trade. But the important element is infrastructure and administrative machinery being put in place will also take care of normal trade across Teknaf and Maungdaw.
Single country exhibitions in Yangon in 1995 and 1996 helped a lot in obtaining demand for Bangladeshi products. Based on the feedback from the Yangon exhibitions, it was clear that getting to know each other, particularly each others products, remained the key, which led to the idea of setting up permanent display cum sales centres of the two countries’ products in Maungdaw and Teknaf.
Bangladesh export jute goods, pharmaceutical products, chemical products, crude rubber, fertiliser, cosmetics etc. Imports from Myanmar include rice, pulses, maize, betel nuts, pulp, logs, minerals etc.
Myanmar’s imports from Bangladesh are generally consumer goods. In order to optimise the benefits of bilateral trade, a special economic zone at Teknaf, is the best option. Such a zone offers unique opportunities for joint venture manufacturing units based on raw materials from Myanmar. Exports will find third country destinations.
A new prospect also lies in BIMSTEC, the latest grouping that brings together Bangladesh, India, Myanmar, Sri Lanka and Thailand.
Myanmar’s liberal policy on leasing out lands or mutual beneficial basis for agro-based industries in really tempting and attractive. On a commercial basis, cultivable, fallow or waste land is available up to 5,000 acres for plantation crops, 3,000 acres for orchard and 1,000 acres for seasonal crops. For aquaculture, the limit is 2,000 acres. For livestock, there are three categories: 5,000 acres for buffalo, cattle and horse, 1,000 acres for sheep and goat, 5,000 acres for poultry and pig. Depending on the type of ventures, exemption from land tax is also offered for a period from two to eight years. There are also provisions for income tax waiver for a minimum period of three years from the date of commercial operation.
For processing industries, the proposed special zone offers the right environment. The cement industry of Bangladesh depends on imported clinker. The vast stone deposit in the Rakhine state of Myanmar provides the raw materials for joint venture clinker factories in Myanmar with a ready market in Bangladesh where most factories only grind it into cement.
The boost economic cooperation telecommunication link between Maungdaw and Teknaf, the two key points should be given top priority. A joint business promotion council with private sector representatives should be set up to monitor and help bilateral trade and investment.
There are immense opportunities for expansion of tourism between the two countries. This is another area where joint ventures are quite safe. Both the countries have a lot of macroeconomic complimentaries which strengthen the case for bilateral cooperation,
According to the figure available from the Dhaka Chamber of Commerce and Industry (DCCI), Bangladesh export to Myanmar was worth US $ 4.40 million during 1997-98 whereas import from Myanmar was US $ 70.40 million during the same period. It may be mentioned here that export to Myanmar was US $ 6.60 million and import from Myanmar was US $ 10.50 million in 1990-91 which shows an increase in the trade turnover between the two countries.