World Bank Ready to Invest $750m on BBIN Regional Corridor
Bangladesh, Bhutan, India, Nepal (BBIN) is a subregional transport initiative between the above-mentioned countries in Eastern South Asia. It is a joint initiative aiming to improve the passenger, cargo and personal vehicles among the BBIN countries. The transport ministers of the four nations had an agreement on June 15, 2015 at the Bhutanese capital of Thimpu to improve the overall transport situation within and between the four countries.
Recently, the World Bank has come up with a plan to lend a total of USD 750 million to Bangladesh to improve the BBIN transport facilities. “The proposed USD 750 million loans will be provided to the Bangladesh government for upgrading the trade and regional connectivity. We have already discussed it with the WB. The bank has already assured of providing the funds to facilitate regional connectivity,” said a senior official from the Economic Relations Division.
After Bhutan pulled out of the initiative, the movement slowed down due to inefficiencies at different levels. It is yet to be functional after several years of delay. In order to accelerate the process, the World Bank has planned to disburse the loan amount to different projects in four components under the ‘BBIN regional transport and trade facilitation programme – Bangladesh phase.’ This will re-energize particular areas of development in the motor vehicle facilities that the member countries have planned.
After Bhutan pulled out of the initiative, the movement slowed down due to inefficiencies at different levels. It is yet to be functional after several years of delay. In order to accelerate the process, the World Bank has planned to disburse the loan amount to different projects in four components under the ‘BBIN regional transport and trade facilitation programme-Bangladesh phase’.
The World Bank is planning to lend USD 170 million out of the USD 750 million to upgrade customs houses in seaports and land ports. This will directly help the country to improve their facilities and employment opportunities to tackle the overall import and export of goods. The port maintenance will also be more automated this way. The Washington based bank has offered USD 250 million to upgrade Benapole, Burimari and Bhomra land port areas. These land port areas have been potential hubs for foreign trade. However, lack of proper investment slowed the development process down. This investment will help to develop the commercial standard requirement of a port area, thus improving facilities for the smooth reception and export of goods from there.
The deal also portions USD 300 million of the total loan to develop a highway that would improve cross border trade and business. Roads and Highways Department (RHD) has planned to upgrade the Sylhet-Charkhai-Sheila-Sutarkandi highway which would connect Asian Highways 1 and 2. The highway is expected to reduce the overall time it takes to send freight out of the country through roadways. This will also encourage member countries to trade with Bangladesh as the transportation in the roadways will be more efficient than ever before. It will help boost intra-country transportation to some extent by making the road available for industrial purposes. Since the highways will essentially be a part of the Bangladesh-China-India-Myanmar (BICM) road corridor, they will not only facilitate the trades with the BBIN countries but also open up possibilities of more efficient trade with other countries.
USD 16 million from the World Bank will be reserved to empower reform processes in trade policy, tariff policy, National Trade and Transport Facilitation Action Plan. This is important for BBIN as it will reconsider terms of trade policies and transportation facilities and prepare changes that would be beneficial. Hence, the advancement of trade will increase at a faster pace.
The World Bank has recently completed its project preparation mission. The appraisal mission of the bank will be completed within April. Negotiations are expected to be held in May, 2022. The Economic Relations Division (ERD) is hopeful that they will be able to sign the loan agreement with the World Bank by June of this year. The overall loan will be disbursed right after the official loan agreement is signed. The development processes will start the development phase soon after. The timetables of different projects to be accomplished with the help of these loans will then be announced.
As per the estimations of the World Bank, seamless connection between Bangladesh and India will increase the real income of Bangladesh by 17% and increase India’s real income by 8% in the short term. The long term benefits of the development are that it will create more opportunities for income for Bangladesh as trades with other countries will be benefited from this initiative.
The correct planning and implementation of the help offered by the World Bank will open doors of possibilities in trade export for the country. Beyond that, developments in the port areas will create employment opportunities for a lot of people. All in all, the right implementation of the disbursed loan can benefit Bangladesh manifold.
