Strengthening Myanmar-Bangladesh Trade and economic ties

.Pathik Hasan

Myanmar is one of Bangladesh’s closest neighbors with historic connectivity going back centuries. The 271 km long Bangladesh-Myanmar border is very important for Bangladesh due to its strategic position, although at present the area is militarized due to its ongoing internal conflicts. Were this to be resolved, Bangladesh could develop routes via Myanmar to access China to the east, and other southeast Asian countries to the south.

Despite having huge trade potentials, Myanmar is not a large trading partner of Bangladesh. Total imports from Bangladesh to Myanmar in the fiscal year (FY) 2018-2019 amounted to US$90.91mn, while the export was US$25.11mn. Myanmar can also use Bangladesh as a transportation route to reach markets such as Nepal, Bhutan, and India. Both Bangladesh and Myanmar are members of the Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC), an organization consisting of Bangladesh, Bhutan, India, Myanmar, Nepal, Sri Lanka, and Thailand that seeks to foster regional and economic cooperation. Myanmar exports goods to Bangladesh through both maritime and land routes. Bilateral border trade is mainly conducted through the Sittway and Maungtaw points of entry.

The products traded between the two countries include bamboo, ginger, peanut, saltwater prawns and fish, dried plums, garlic, rice, mung beans, blankets, candy, plum jams, footwear, frozen foods, chemicals, leather, jute products, tobacco, plastics, wood, knitwear, and beverages.

Bangladesh is a Southeast Asian country and can be used as an important hub to connect ASEAN and the South Asian Association for Regional Cooperation (SAARC) members of Afghanistan, Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan, and Sri Lanka is difficult. Myanmar too, as an ASEAN member, can access the SAARC free-trade bloc through Bangladesh. 

Similarly, only 0.37 per cent of the exports of Myanmar were directed to Bangladesh in 2018-19. The share of Bangladesh in the total imports of Myanmar in the same fiscal year was 0.15 per cent. Thus, Bangladesh is also not a large trading partner of Myanmar.

Currently border trade between the two countries is conducted through the Sittwe and Maungdaw cross-border camps. Myanmar-Bangladesh border trade through Maungdaw started on September 05, 1995, to mainly legalise informal border trade between the two countries. Similarly, border trade through Sittwe started on December 28, 1998. Goods from Sittwe to Teknaf border in Bangladesh side comes via waterway. Around 40 per cent of exports from Myanmar to Bangladesh and around 29 per cent of import of Myanmar from Bangladesh take place through these two borders.

Major products traded between the two countries include bamboo, ginger, peanuts, onion, saltwater prawns and fish, dried plums, garlic, rice, mug beans, blankets, candy, plum jams, footwear, frozen foods, chemicals, leather, jute products, tobacco, plastics, wood, knitwear and beverages. Consumer goods that were mainly imported from Myanmar to Bangladesh during 2019 via the Maungdaw border trade centre comprised mostly marine products, ginger and onions.

All these observed benefits are expected to be realised by the border residents of Bangladesh and Myanmar by establishing border haats along the Bangladesh-Myanmar border. It is also likely to create cross-border value chains at the local level and boost local industries in both the countries. Additionally, haats could also promote border tourism, which will further facilitate the development of these remote areas and create better people-to-people connectivity at the local level.

Well, it is not an easy task. It is noted that the border trade point Maungdaw sometimes remains closed due to tension between Bangladesh and Myanmar over issues like the Rohingya crisis. There is a possibility that establishing a border haat could allow smooth trading of goods even when there is a ban on trade at the regular border points. Moreover, this initiative will strengthen the relationship among the border residents and the bilateral relationship between the two countries, which is strained as a result of the maritime dispute and Rohingya refugee crisis. But Rohingya Refugee crisis must be resolved for strengthening the trade relations.

According to the media reports, The bilateral border trade between Myanmar and Bangladesh stood at over US$3.88 million as of 19 November in the mini-budget year of 2021-2022, according to the Ministry of Commerce.

According to statistics, the bilateral trade during this period has seen a drop, decreasing by $1.95 million, compared with that of the same period when the last year border trade was $5.84 million.

As of 19 November, Myanmar-Bangladesh total border trade included Myanmar export of $3.86 million its imports of $0.02 million.Myanmar exports goods to Bangladesh through both maritime and land routes. Bilateral border trade is mainly conducted through the Sittway and Maungtaw points of entry.

In the early period of bilateral border trade, trade through the Sittway gate totalled $2.75 million, with $2.7 million in exports and $0.008 million in imports, while trade at the Maungtaw border exceeded $1.14 million, including $1.12 million in exports and $0.02 million in imports.

The products traded between the two countries include bamboo, ginger, peanuts, saltwater prawns and fish, dried plums, garlic, rice, mung beans, blankets, candy, plum jams, footwear, frozen foods, chemicals, leather, jute products, tobacco, plastic, wood, knitwear and beverages, according to the ministry.

Cooperation in trade and energy

There are other routes to bilateral cooperation. Myanmar is rich in natural resources such as tin, zinc, copper, tungsten, coal, marble, limestone, natural gas, and hydropower, etc. Myanmar could thus be a major source of energy for Bangladesh to ensure its energy security.

Furthermore, grains such as rice are produced in large quantities in Myanmar which can also be exported to Bangladesh. Rice production in the country accounts for approximately 43 percent of its total agricultural production, making it the seventh-largest producer of rice in the world. Out of 67.6 million hectares of land, 12.8 million are used for cultivation. In 2019 alone, Myanmar accounted for 13,300 million metric tons of milled rice production. Rice production in Myanmar is heavily dependent on the traditional methods of cultivation.

Myanmar is also a large producer of agricultural products. During Bangladesh’s onion crisis with India in 2019, Myanmar provided onions to Bangladesh. Bangladesh understood the importance of bilateral trade with Myanmar at that time.

If Bangladesh improves its relations with Myanmar, its dependence on India could be reduced and could increase trade with other countries in Southeast Asia.

Myanmar is also a major supplier of natural wood to the world. While attracting foreign investment has been limited to the oil and gas sector, the country has recently shifted its focus to attracting production-based investment. The country is well ahead in power generation due to good investment in hydropower generation. The tourism industry is also a promising sector of the country.

Through the import of gas and electricity, Bangladesh can obtain its future energy security. The two countries can jointly explore oil and gas fields in the Bay of Bengal. Bangladesh can also contribute to the development of Myanmar’s infrastructure.

Both countries have also resolved a dispute over their maritime borders through the International Court of Justice. As a result, the rights of Bangladesh have been established in an area of 11,000 square kilometers. Myanmar’s waters have also been properly identified.

The proposed construction of the Asian Highway, funded by the Asian Development Bank can increase land connectivity between the two countries and increase trade in products such as fertilizers, plastics, cement, and furniture, etc.

Myanmar, which at present does have sophisticated manufacturing, can import electronics and pharmaceutical products that are readily produced from Bangladesh and benefit from the technology transfer.

China and ASEAN

China is now the biggest investor in Myanmar. China has invested over US$3 billion since the 2016-2017 fiscal year. One of the most strategic components of these investments is the US$1.3 billion Kyaukphyu deep seaport, which when completed, can provide China’s Yunnan province a shortcut to the Indian Ocean.

The country’s biggest economic advantage for Myanmar is that they are a member of ASEAN. ASEAN controls about 24 percent of total world trade and its share in world trade is growing yearly. ASEAN’s trade relations with China, Japan, and South Korea are deepening due to the increase in trade and the upcoming RCEP agreement. ASEAN countries account for more than 50 percent of total trade between themselves and these three countries.

Bangladesh is keen to provide assistance to Myanmar. Covid-19 vaccine distribution and counter-terrorism training are some areas for cooperation. The Rohingya refugee problem has, however, created some tension between the two countries, and finds the solution can serve the longer-term interests of Bangladesh and Myanmar.