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Bangladesh sends team to weigh direct banking option with Burma |
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by Siddique Islam
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Thursday, 19 February 2009 22:55 |
Dhaka, February 19: Dhaka sent a technical team to Rangoon on Thursday, aiming to simplify the payment procedure between the two countries, through a direct banking arrangement, officials said.
A four-member team, headed by Deputy Governor of Bangladesh Bank, Ziaul Hasan Siddiqui, will work out the modalities of banking transactions and ways to make the planned 'border market' operational, to boost trade between Bangladesh and Burma.
During the 10-day visit, the team will meet officials of the Central Bank of Myanmar, the Ministry of Commerce and the apex trade body in Rangoon, to discuss the modalities of opening letters of credit (LC) under a direct banking arrangement between the two countries.
The members of the team will also visit the border market, which is already operational between Burma and Thailand, in addition to holding their planned discussions with officials of the Southeast Asian country.
The team has been assigned to prepare an in-depth report on how to set up a border market and establish a direct banking arrangement, which will be submitted to the Commerce Secretary, within a week after returning from Burma, the officials added.
"We will take the next course of action after receiving the report from the team," a senior official at the Bangladesh Commerce Ministry told Mizzima in Dhaka, on Thursday, adding that the authorities concerned may negotiate further with their counterparts for setting up the direct banking arrangement, if necessary.
Currently, payments for foreign trade are settled between the two countries through a third country like Singapore.
Bangladesh's importers now settle their payments for bulk exports through bank drafts issued by foreign banks, in a third country. An importer is entitled to a bank draft against import worth USD 10,000-20,000 at a single time, under the existing border trade arrangement.
"We face problems when we import in a large quantity as a number of drafts have to be issued and it takes time for settlement through a third country, like Singapore," a local importer told Mizzima.
The exporters of Burma do not prefer to export their products through opening of LCs, due to imposition of investment and trade sanctions on the Southeast Asian country, by the United States, the European Union and Canada.
The volume of bilateral trade between the two countries has been quite 'insignificant' for years, because of lack of proper initiatives. The balance of trade, according to officials, has tilted in favour of Burma over the past 12 years.
However, a review of bilateral trade between the two countries shows that the trade balance was in favour of Bangladesh from 1991-92 to 1995-96. But in 1996-97 it tilted in favour of Burma.
Dhaka exported goods and commodities worth only USD 9.58 million to Rangoon in 2007-08, while its imports during the period stood at USD 82.20 million, according to official statistics.
Bangladesh, mainly exports pharmaceutical products, leather, woven garments and other manufacturing goods to Burma, and imports wood articles, vegetable products, prepared food and fish.
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