45260-001: South Asia Subregional Economic Cooperation Trade Facilitation Program

Project Data Sheet (PDS): Details


Description

The South Asian Sub-regional Economic Cooperation (SASEC) Sub-Regional Trade Facilitation Program supports ADB s regional cooperation strategy for South Asia (2011-2015) and builds on the commitments expressed by the SASEC Trade and Transport Working Group. Its intended impact is to increase intra-regional trade among the SASEC member countries of Bangladesh, Bhutan, and Nepal. India is not included in the program because it is self-financing its trade facilitation reforms and has already taken significant strides ahead of the other countries. It is, notably, the only SASEC member country that has acceded to the Revised Kyoto Convention for the Simplification and Harmonization of Customs Procedures (RKC). This program s expected outcome is efficient, effective, transparent, secure and service-oriented processing of cross-border trade in the sub-region. To achieve this outcome, the Program and its associated TA will support activities under three thematic areas: (i) modern and effective customs administration, (ii) streamlined and transparent regulations and procedures, and (iii) improved information and responsiveness to the private sector. The importance of this program is underscored by the realities in South Asia as described below.

Project Rationale and Linkage to Country/Regional Strategy

South Asia is among the least integrated regions in the world. Despite South Asia s impressive growth performance in recent years, the region remains one of the least integrated in the world. The passage of the South Asia Free Trade Agreement (SAFTA) in 2006 and related bilateral free trade agreements have yet to show a significant impact in enhancing sub-regional trade. South Asia accounts for only 2% of world trade, and 1.7% of world foreign direct investment. Intra-regional trade is only less than 6% of the region s total trade. In comparison, intra-regional trade as share of total trade for Latin America, Middle East and North Africa, and East Asia are 17%, 8%, and 55% respectively. South Asia s intra-regional trade is lower than that of other regions even after factors such as geographic proximity, income levels, and population are taken into account. At the same time, there are estimates of relatively high levels of informal trade, perhaps as much as 72% of formal trade. In this context, there is enormous potential for intra-regional trade to grow and for the sub-region to benefit from economies of scale, greater competition, and technology spillovers from increased trade. Sub-regional growth and integration will in turn lead to a bigger market and foster greater integration with other regions and with the world economy.

Impact

Increased intra-regional trade in the SASEC region.

Project Outcome

Description of Outcome

Faster and cheaper processing of cross-border trade in the SASEC region.

Progress Towards Outcome

Ongoing

Implementation Progress

Description of Project Outputs

Modernized and more effective customs administration Streamlined and transparent regulations and procedures Improved information and responsiveness to the private sector

Status of Operation/Construction or Implementation Progress

For Bangladesh, the following have been achieved: 1. submitted to WCO its instrument of accession to the RKC 2. NBR finalized an action plan with respect to Bangladesh's compliance with SAFE Framework 3. NBR finalized an as-is and to-be analyses for the development of an electronic national single window as part of the customs management systems upgrade to ASYCUDA World

Safeguard Categories

Environment: C
Involuntary Resettlement: C
Indigenous Peoples: C



Project Data Sheets (PDS) contain summary information on the project or program. Because the PDS is a work in progress, some information may not be included in its initial version but will be added as it becomes available. Information about proposed projects is tentative and indicative.