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export time. Inland waterway connectivity between India and Bangladesh will
boost up trade and reduce cost and time of export-import. Bangladesh can import
goods from Nepal and Bhutan. Bangladesh can import gas from Myanmar through
the proposed tripartite gas line. Bangladesh can import cheapest hydropower from
Bhutan.
Lower cost of transportation:
South Asia has logistic costs that range between 13% -14% of GDP. If regional
connectivity increased this cost will be reduced and make export-import more
favorable.
Boost Revenue Earning:
Transit-As Bangladesh is providing transit facility to India, Nepal and Bhutan it
can impose transit charges that will yield sizeable revenue. Bangladesh can impose
charges based on emissions and size of transit vehicles as measured by the number
of axles. It can also levy toll charges on transit traffic.
Seaport-Land locked Nepal; Bhutan and North East Indian states can be extremely
benefited from two sea ports of Bangladesh. At present, Bangladesh makes use of
only 60 percent and 25 percent of the total capacity of Chittagong and Mongla
ports. Bangladesh can sell off the remaining 40 and 75 percent of the services of
the two seaports and earn revenue. The potential of developing a deep sea port is
under active planning which may be used by other countries of the region
including China, India and Myanmar and boost up our revenue earning.
Air port-Bhutan wants to use the airports of Bangladesh along with five new land
customs (LC) stations under a proposed 'Protocol on Transit' between Bhutan and
Bangladesh. Bangladesh can sell the service of airports and earn revenue.
Balance of payment has two main components Current account: Current account includes international trade in goods and
services and income from investment and gifts.
Capital account: Capital account includes i) Direct investment, ii) Portfolio
investment, iii) Capital movements and iv) Countrys official reserve.
Impact on current account: The balance of current account will be increased.
Regional connectivity will increase export-import and boost up revenue earnings
from selling different services which will lead to surplus in current a/c balance.
Impact on capital a/c: The balance of capital a/c will also be increased.
Connectivity will attract more foreign investment and capital movement for our
infrastructural development and potential business sectors which will make capital
a/c surplus.
Impact of Regional connectivity on foreign exchange reserve:
Regional connectivity has a direct impact on forex reserve. The relationship can be
shown as
Regional connectivity
Surplus production
Export
Forex reserve