Motor Vehicles Agreement Stood As Timely Demand for Regional Development

Many signed agreements in South Asia region are waiting to be executed in the face of current economic demand. The visionary leaders in the region are in a race to see the execution of the agreements which were signed close to a decade ago. In recent times, the state heads have started feeling the necessity of the deals for sake of economic interest. All economies in the world are now experiencing trade related challenges. So, in order to address probable trade challenges, implementation of Motor Vehicles Agreement among Bangladesh-Bhutan- India-Nepal is crucial. Moreover, modernization of existing land ports has become a burning issue in relation to expanding foreign trade to moderate the post-LDC challenges. 

Manila-based lender, Asian Development Bank (ADB) is very positive about foreign trade growth in the days to come upon modernization of land ports. The ADB made projection that foreign trade volume to increase by 50 per cent on condition of reform and trade facilitation works. Mainly, complex customs and clearing procedure, slow pace in cargo-handling in land ports have become key barriers to expedite foreign trade. As a result of long-lasting problems in land ports area, Bangladesh cannot improve its score in doing business index prepared by the World Bank (WB). There are 181 customs stations in Bangladesh for the purpose of land ports. Around 24 land customs stations have been declared as land ports and 12 are now operational. It is important to say that Bangladesh does trading with Myanmar through only one land port. An English language business daily recently reported that the ADB is going to provide US $ 144.5 million for the purpose of frontier ports modernization works with India and Myanmar in the aim of expanding high-volume international business. Nevertheless, Motor Vehicles Agreement keeps ability to expedite foreign trade among Bangladesh, Bhutan, India and Nepal.        

  
The Motor Vehicles Agreement (MVA) was signed on 15 June, 2015 in transport ministers meeting held in Bhutan. Bangladesh, Bhutan, India, Nepal (BBIN) were signatories of MVA. Against the backdrop of the need of seamless passenger, personal and cargo movements, MVA was signed. BBIN MVA is expected to ensure sound cross-border vehicular movement with passengers and goods and services. The purpose of MVA was to increase people-to-people contact apart from enhancing a wide range of trade and economic cooperation among Bangladesh, Bhutan, India and Nepal.    

 
Unfortunately, landlocked country - Bhutan lifted its decision following Bhutanese people mass movement against much-discussed agreement. Pollution from vehicular movement coupled with environmental degradation in Bhutan   enforced the movement. In view of observing voice raised by Bhutanese people, the parliamentary committee is in unspoken mood for the time being. It is hearting that Bhutan, in the meantime, gave its nod to join the MVA shortly. The decision was taken by Bhutanese leader in the wake of regional leaders' request in recent times.

Over the last several years, India-based CUTS international carried out studies on BBIN MVA economic prospect. The study reveals that eight designated BBIN corridors are set to minimize time and cost of doing trade.  According to the Organization for Economic Cooperation and Development (OECD), a 10 per cent improvement in transport and trade-related infrastructure quality can increase agricultural exports of developing countries by 30 per cent. It is being observed that BBIN MVA is walking slow since its inception. The context of present time demands country-to-country connectivity which definitely helps emerging economies go ahead. Prime Minister Sheikh Hasina is now seeking speedy implementation of BBIN MVA for regional economic integration. Even though, she met her Nepalese counterpart KP Sharma Oli at 18th NAM Summit in Baku, Azerbaijan where the issue was discussed with high importance.

There are regular bus services between Kolkata-Dhaka, Shillong-Dhaka and Agartala-Kolkata via Dhaka. A new bus service (Dhaka-Khulna-Kolkata) was launched during PM Sheikh Hasina's visit in April 2017. To note that The Bangladesh, Bhutan, India and Nepal- Motor Vehicles Agreement is expected to significantly boost connectivity by road. The trial run of Cargo Movement on Trucks from Kolkata to Agartala via Dhaka and Dhaka to New Delhi via Kolkata and Lucknow was conducted in August 2016. Afterwards, tri-nation bus service on trial-basis among Bangladesh , India and Nepal was also conducted in April 2018 for implementation of MVA.

Bangladesh approved the draft of 'Memorandum of Understanding' prepared by India but Nepal did not agree with it. So, the need for coordination is a must among four countries' leaders. After 2018 of tri-nation bus service, no development was noticed in order to inaugurate cross-border regular vehicular movement among three countries under MVA. As part of the move for MVA implementation, a Joint Working Group (JWG) meeting was held on Bangladesh, Bhutan, India, and Nepal (BBIN) MVA in New Delhi in 2020. The purpose of the meeting was to finalize BBIN MVA protocol- the passenger Vehicles protocol and the Cargo vehicles protocol. The primary goal of MVA  is to develop  functional transport corridors and subsequently convert them to economic corridors.

What is worrying that trade volume among Bangladesh, Bhutan, India and Nepal is not admirable. Bangladesh economy runs ahead with significant contribution put by European countries in terms of importing goods from Bangladesh. According to reliable sources, Asian countries imported Bangladeshi goods worth only Tk 15,352 crore during the year 2015-2016 whereas European member countries, the member countries of NAFTA, Developing eight, ACU member countries and other countries are importing more. Bangladesh now exports goods worth $ 1.5 billion to India and imports merchandise worth over $ 8.5 billion from that country. According to state-run Export Promotion Bureau data, Bangladesh last year exported products worth $ 38 million to Nepal and imported around $ 18 million of goods while only $14 million in 2018-19 fiscal year.  EPB tells that export receipts in July-June, 2017-2018 from Bhutan US$ 4.38 million where US$ 45 million from Nepal, US$ 873 million from India.

In view of trade volume among four economies, the resumption of 1,100 km route Dhaka-Rangpur-Banglabandha-Siliguri (India)- Kakarvitta (Nepal)-Bharatpur-Kathmandu under MVA is needed. Prime Minister Sheikh Hasina placed BBIN MVA issue on the table while talking to visiting leaders of India, Nepal and Bhutan. It is good to know that the Bhutan parliament has yet to ratify the BBIN protocol, the other three countries are in move for implementing Motor Vehicles Agreement. South Asian visiting leaders, while staying in Dhaka to celebrate Golden Jubilee of Bangladesh's independence and Bangabandhu's Birth Centenary, have agreed on implementing BBIN MVA shortly.

Recently launched rail link with India (Rohanpur-Singhabad route) aiming to carry passengers and goods between Bangladesh and Nepal is a milestone for regional connectivity. If rail connectivity with Bhutan, through Chilahati-Haldibari, is established, sub-regional trade volume is set to be increased. Bangladesh now needs to join the India- Myanmar-Thailand Trilateral Highway project in order to be connected with Southeast Asia by road. In this regard, India's approval is necessary.  For materialization of BBIN MVA, Bangladesh should keep eyes on infrastructure development in designated cross-borders stations. Speedy execution of customs procedure has to be ascertained. Besides, a separate parking zone for vehicles waiting to finish customs formalities must be built.  Holding timely secretary-level meeting for resolving MVA related problems is needed. In order to address financing problems for implementation of BBIN MVA, financing from donor agencies might be arranged. Currently, The Asian Development Bank (ADB) is providing financial support to the BBIN MVA initiative as part of its assistance to the South Asia Sub regional Economic Cooperation (SASEC). Besides, under the SASEC, the ADB has promised to release the funds under 'Integrated trade facilitation sector development programme'. Let us take steps for refurbish the frontier ports and materialize BBIN Motor Vehicles Agreement as soon as possible.   


Dr Bijay Prasad Kushwaha & Dr Pardeep Kumar are Associate Professors of Management Department, Chandigarh University, Panjab, India. Rebel is an Instructor and Research Scholar of Chandigarh University.