Pact expected to expand trade and economic exchanges between four countries
Trade: A Bhutanese commercial truck should be able to transport locally grown fruits all the way to Dhaka and bring back goods like clothes starting some time next year, following the signing of the Bangladesh, Bhutan, India, and Nepal Motor Vehicle Agreement (BBIN MVA) in Thimphu, yesterday.
While it was agreed among the transport ministers of the four countries that the BBIN MVA should be implemented in six months rather than 12, its operationalisation will depend on when it is ratified by respective cabinets or parliaments. Implementation is scheduled to begin by October, this year.
Bilateral or trilateral agreements will also have to be made between the four countries which will specify details on, for instance, the quantity of commercial or private vehicles that will be allowed into Bhutan on a reciprocal basis, entry and exit points, routes, types of permits that will be required, customs related issues, and fees, among others.
Speaking to Kuensel, information and communications minister, DN Dhungyel said the BBIN MVA would benefit Bhutan, as transportation time of goods would be decreased and costs saved. He said this was especially important for Bhutan, as it exports perishable goods to Bangladesh.
Currently, Bhutanese trucks have to unload their goods onto Bangladeshi trucks at the Indo-Bangladesh border.
There is also a more than one-month process involved in importing goods from Bangladesh. The importer also has to hire an exporter in Bangladesh to bring the goods until the Indo-Bangladesh border.
The Bhutan Exporters Association general secretary, Tshering Yeshey, welcomed the signing of the agreement. “With the agreement, we’ll benefit. Goods can be transported direct to Bangladesh,” he said. “The best part is that Bhutanese vehicles will be able to go all the way to Bangladesh and pick goods from there when they return.”
Another benefit of the BBIN MVA is the inclusion of a clause that will protect Bhutan from being swamped by vehicles from the three other countries. “Being a small and landlocked country, we were apprehensive about being flooded by vehicles from India, Bangladesh or Nepal,” said lyonpo DN Dhungyel, adding that this issue had been deliberated extensively.
He said that the clause allows for existing agreements or arrangements Bhutan has with any of the three other countries to supersede any agreement made under the BBIN MVA.
Lyonpo also pointed out that the current trend was for Bhutanese to go to Bangladesh, India, or Nepal to buy and sell goods, as there was a business advantage. He said unless traders from the three countries see a business advantage in Bhutan, it was unlikely that there would be large numbers of vehicle coming to Bhutan.
For instance, while there is almost a free flow of vehicles between Bhutan and India, more Bhutanese vehicles travel to India, which is an advantage for Bhutan.
Prime Minister Tshering Tobgay, in his opening statement, also referred to the special clause for Bhutan. “As a small and landlocked country, Bhutan has special needs and we thank our neighbours for understanding our difficulties, especially on the issue of reciprocity in the cross-border movement of vehicles,” he said.
Lyonchoen also pointed out that the BBIN MVA would address the numerous physical and non-physical barriers that make the transportation process inefficient, costly, and cumbersome. “It will not only boost trade among our countries, it will also generate greater goodwill and understanding in the sub-region and beyond.”
The prime minister added that given the physical realities of the sub-region, there would be “numerous challenges” as implementation of the agreement begins. “We must be flexible and remain open to ideas and suggestions to improve arrangements as part of the preparatory phase,” he said.
The Asian Development Bank (ADB), which has been involved as a major donor in developing transport corridors in the BBIN countries through the South Asia subregional economic cooperation (SASEC) programme, provided technical assistance in preparing the BBIN MVA.
Lyonpo DN Dhungyel expressed appreciation to the ADB and the government of India for providing access roads and upgrading the national highway network in India.
ADB vice president, Wencai Zhang, said the signing of the BBIN MVA would bring SASEC closer to achieving its objectives of facilitating trade by easing cross-border movement of people, goods, and vehicles, and enhancing trade and economic exchanges between the four countries. He reiterated the ADB’s commitment to support the process.
The ADB vice president also pointed out that in the next five years, 30 road projects worth USD 8 billion have been identified to fill and upgrade critical connections in the BBIN area. However, he said that it is important for the BBIN countries to implement appropriate transport facilitation measures.
He also said that non-tariff barriers continue to impede trade within the region and that it can cost much more for a South Asian country to trade with another in the sub-region than outside it.
“I sincerely hope that this momentum will be sustained in the future and lead to an effective and efficient implementation of the BBIN agreement,” Wencai Zhang said.
The transport ministers unanimously called for the fast tracking of requirements needed for implementation.
“Let our borders no longer be treated as separators but connectors,” the transport minister for Bangladesh, Obaidul Quader, said.
Meanwhile, the BBIN MVA will be extended to other SAARC countries and could eventually be subsumed under a SAARC MVA.
A BBIN friendship motor rally was also flagged off by the four ministers at the conclusion of the signing. The rally will be held in October.
Gyalsten K Dorj
Additional reporting by Rajesh Rai, P/ling