WB sees good in regional deal

Sunday, August 15, 2010

Offers to fund transit, transhipment, power, water projects

While the main opposition BNP is resisting negotiations between Bangladesh and India on bilateral cooperation, the World Bank (WB) has welcomed the initiative offering an extended fund for projects in this regard.

The Breton Woods institution has already indicated to finance different projects on transit, transhipment, power and water to increase regional and bilateral cooperation, said Economic Relations Division (ERD) sources.

The WB thinks such cooperation will not only help the country develop but also reduce poverty level substantially, the ERD sources said.

In its new Country Assistance Strategy (CAS), WB remarks, "Programming under the strategy will remain sufficiently flexible to respond to regional opportunities as they emerge, including on-going consideration of India-Bangladesh cooperation in the power sector and a proposed cross-border water resource management operation."

In its CAS report, the WB observed that significant progress has been made on regional cooperation with the recent signing of cooperation agreement with India. But the opposition party has raised concern and it has the potential to tap into public fears of a dominant India.

The historic rapprochement has the potential to create regional opportunities for water resource management, transport, trade and energy, the report said.

It said the government's dialogue with Bhutan and Nepal is an opening to improve cooperation on energy and multi-modal transport.

Despite promising progress during this government's tenure, further progress on regional cooperation and implementation of existing agreements hinges on maintaining strong political will and support of Bangladesh as well as across the regional country governments.

The WB referred to one of its past studies on economic cooperation in which it had said that Bangladesh could gain very significantly in trade and poverty reduction if opportunities for regional integration were fully exploited, particularly through increased cross-border trade and use of Bangladesh as a transit hub of the region.

ERD sources said the WB has also started a new study on how Bangladesh can benefit from such cooperation.

The report also said South Asia remains the least integrated region in the world in terms of trade in goods and services and management of common resources.

The report also said the World Bank Group will work across the South Asia, leveraging its financial and technical resources to advocate regional cooperation and initiatives.

The WB report said if the regional cooperation increases the GDP growth, Bangladesh will leap by two-percentage point.

As the lowest riparian country, Bangladesh occupies only 7 percent of the Ganges-Brahmaputra-Meghna river basin, but receives water from 57 international rivers.

The country faces numerous challenges associated with the greater watershed beyond its borders.

Achieving sustainable water resources management in Bangladesh requires moving beyond historic obstacles toward enhanced regional cooperation with all riparian countries, the report said.

A historic summit between the Bangladesh and Indian prime ministers was held early this year and resulted in the signing of accords on the border security, trade, transport and power inter-connections, said the report.

Implementation of these accords and deepening of the dialogue on water resource management could herald the start of an era of improved cooperation with economic benefits for all countries of the region.

The WB and the ADB have long been pursuing for making regional cooperation effective, the report said.

The recently approved strategy for FY2011-14 proposes to double the WB assistance to Bangladesh from that of its previous period.