Transit issue-cost-benefit analysis
A top official in the BTC said the letter of the adviser gives us a
negative signal as far as striking of transit deals is concerned.
The Prime Minister's Office (PMO) has asked the commerce ministry to
carefully analyse the economic costs of transit, taking into
consideration the negative externalities, political and environmental
issues, prior to granting the facility to India, Nepal and Bhutan.(The
Financial Express BD)
Dr Moshiur Rahman, Economic Affairs Adviser to the Prime Minister, has
made specific suggestions through a dummy-official (DO) letter
addressed to Commerce Minister Faruk Khan.
In the letter, which was seen by the FE, the Adviser has requested to
evolve a methodology to assess the possible negative externalities in
the event of granting transit facility to India, Nepal and Bhutan.
The Ministry of Commerce (MoC) should analyse the theoretical base of
political and economic issues on transit and possible impact on
sub-regional cooperation in the way of striking transit deals with the
countries concerned, Moshiur said.
He has suggested the MoC to conduct an economic analysis of the
facility in cost-benefit perspective.
Dr Moshiur said a system should be there to assess the economic gains
for Bangladesh after constructing required infrastructures for transit
facilities.
Besides, Moshiur said, MoC will need to have an administrative
arrangement to comply with the regulations of World Trade Organisation
(WTO) in relation to the proposed transit agreements.
He has also underlined the need for amending the existing fees
applicable to Indian cargoes under the protocol on inland water
transit between Bangladesh and India.
'It is essential to examine and identify the loopholes in the current
tariff rates under the agreement between Bangladesh and India, while
the required changes should be brought in the agreement to make the
same workable in future perspective,' reads the DO.
Furthermore, the DO said, a system has to be evolved to measure the
negative externalities and calculate the financial compensation for
Bangladesh.
Moshiur Rahman in his letter has also underscored the need for
establishing an appropriate authority that would determine the actual
compensation that the country would need in the event of granting
transit facility.
The latest letter also suggested estimation of the financial losses
that the country would suffer due to heavy traffic movement under the
proposed transit deals.
Officials in the MoC said they have sent the letter to Bangladesh
Tariff Commission (BTC) as they did in the case of Finance Minister's
directives on the same issue.
A top official in the BTC said the letter of the adviser gives us a
negative signal as far as striking of transit deals is concerned.
"We are working on both the directives coming from Dr Moshiur and Mr
Muhith," he said.
Earlier, Muhith outlined an eight-point strategy for Bangladesh in
relation to striking transit deals with the neighbours.
The major areas of strategy include finalising routes for transit
through road, railway and waterways and strengthening the capacity of
Chittagong and Mongla ports, developing required infrastructure.
http://www.thefinancialexpress-bd.com/more.php?news_id=124900&date=2011-02-03
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