South Asia Subregional Economic Cooperation (SASEC) Integrated Trade Facilitation Sector Development Program

Start & End Date: 2022-Ongoing

Country/Countries: Bangladesh

Multilateral Institution(s) Involved: Asian Development Bank

Limited capacity of Bangladesh customs offices hinders sustained and holistic implementation of WTO TFA. The World Bank’s Logistics Performance Index of 2018 indicated weaknesses in Bangladesh’s customs operations and quality of infrastructure, resulting in an overall logistics performance index score of 2.58 out of 5, and a ranking of 100 out of 160 economies. Insufficient public investment and lack of coordination among government agencies have hindered the development of border infrastructure and clearance procedures to respond to growing trade and demand.

A $143 million loan package to support the Government of Bangladesh's efforts to accelerate growth by improving efficiency, predictability, and security of cross-border trade. The ADB loan package includes a $90 million policy-based loan, which will support reforms in areas including bringing the country’s customs legal frameworks in compliance with international standards, improving cargo clearance processes, and strengthening the capacity of the National Board of Revenue (NBR) and the Ministry of Commerce. To complement the policy reforms, a $53 million project loan will construct integrated land customs stations and land ports of NBR and the Bangladesh Land Port Authority (BLPA) at Akhaura, Sonamasjid, and Tamabil border crossing points (BCPs). Facilities and equipment for customs clearance and cargo transshipment operations will also be installed. ADB will provide a $1.5 million technical assistance grant from its Technical Assistance Special Fund to support the modernization of the customs legal framework and coordination among the border agencies, prepare an operationalization plan of central customs facilities, strengthen NBR’s capacity to implement modernized customs operations at BCPs, and build the project implementation capacity of NBR and BLPA.

The project is expected to improve the volume, efficiency, predictability, and security of cross-border trade in Bangladesh, which will contribute to the national goals of accelerating growth with industrialization and trade, and expanding subregional trade and commerce. The program will help diversify Bangladesh’s export products and destinations. Improved connectivity will facilitate subregional trade and commerce among the South Asia Subregional Economic Cooperation (SASEC) countries.