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The Financial Express

Border haats on Bangladesh-Myanmar border: Opportunities and challenges

| Updated: November 19, 2020 16:40:26


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Border haat is 'a rough-and-ready market' allowing 'local people to trade in locally-grown agricultural and manufactured' items along the border. The core idea behind the border haat is to provide a formal arrangement of trading between the local communities of two countries who have limited access to big markets, mainly due to long distances. It is also argued that through the formalisation of trade by setting up of border haats, it would be possible to reduce informal trading at the borders. It is envisaged that border haats improve the relationship among the local people by creating business opportunities and interactions between people on two sides of the border.

Bangladesh-India border haats are established within 5-kms on either side of the international border. Such haats are restricted market places where local people with prior permission can only enter. Border haats are usually open once a week where pre-selected traders and vendors, living within five-kilometer radius of the border of India and Bangladesh, are allowed to sell and buy locally produced goods. Usually, 500 people from both sides are allowed to enter the border haat on each weekly market day. It also allows consumers to make purchases up to US$200 on a single haat day, and no customs duty is added on the price.

Currently, Bangladesh and India have four border haats in different locations along the border between these two countries. With the experience of the positive impacts of those haats on various economic and social aspects, both Bangladesh and India have sanctioned the establishment of six more border haats and are also considering the prospects of a few more.

Additionally, India and Myanmar have already progressed in setting up several border haats in different parts of the border they share. Positive impacts of border haats between Bangladesh and India have led to the consideration of the establishment of haats in the border areas between Bangladesh and Myanmar that stretches for 270 kms, and divided by the river Naf into some areas. This article discusses the opportunities and challenges of establishing border haats along the Bangladesh-Myanmar border.

CROSS-BORDER TRADE BETWEEN BANGLADESH AND MYANMAR: 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 (Table below).

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.

THE POSSIBILITIES OF ESTABLISHING BORDER HAAT ON BANGLADESH- MYANMAR BORDER: Despite the Myanmar government's attempt to promote trade through formal channels, informal cross-border trade activities continue to thrive largely between the two countries on account of a complicated trade licensing system that requires various documents, including sales contracts, letters of credit and bank transactions in a single currency. Estimates suggest that the volume of unofficial/ informal trade between the two countries could be worth US$300mn per year.

Informal trade is generally predominant in all the border areas across the world. One of the significant reasons is limited livelihood opportunities for border residents and poor connectivity of these remote regions with business hubs of their own countries. Informal trade is often the reflection of synergies among the border residents of neighbouring countries, which had developed out of necessity.

A study by CUTS International in 2019, shows that the establishment of border haats along the India-Bangladesh border led to a reduction in informal trade in those areas, generated livelihood opportunities for the border residents and facilitated trade of products through the haats, that were earlier traded informally. Therefore, it is expected that the establishment of border haats along the Bangladesh-Myanmar border could also reduce informal trade in those regions, thereby reducing security concerns in those areas.

India-Bangladesh border haats have been instrumental in generating income opportunities to the vendors, product handling labourers, transporters, support service providers, and reducing informal trade has also been reportedly effective in raising the standard of living of the border residents (by enabling access of cheap essential commodities through the haat). These have also helped empowering women; strengthening cross-border people to people connectivity and overall development of those areas such as improvements in the quality of roads leading up to the haats.

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.

This strained relationship between the two countries might inhibit the governments from getting into dialogues regarding the establishment of border haats. Other challenges in the establishment of border haat could be the presence of different insurgency groups at various locations along the Myanmar-Bangladesh border; the geographical difficulties emanating from the nature of the terrain at the shared borders (mostly hilly, riverine and maritime); and opposition from residents on the ground of their sentiment regarding the Rohingyas. Also, the border security forces occasionally seize huge amounts of drugs on the Myanmar-Bangladesh border, so there could be apprehension about an increase in drug peddling with the establishment of border haat. However, strict security in border haat areas could lead to curving down drug peddling.

TOWARDS AN OPTIMISTIC FUTURE: Border haats have opened new opportunities to enhance trade and people-to-people connect between different countries and generated livelihood opportunities for the border residents. Considering these positive impacts and externalities, Bangladesh and Myanmar could explore opportunities for the establishment of such border haats after considering all possible challenges.

In December 2011, a Joint Commission for bilateral cooperation between Bangladesh and Myanmar was established and a Memorandum of Understanding was signed for establishing a Joint Business Council (JBC) between the Union of Myanmar Federation of Chambers of Commerce and Industries (UMFCCI) and the Federation of Bangladesh Chambers of Commerce and Industries (FBCCI). The objective behind setting up the Joint Commission was to explore ways to augment trade between the two countries. However, the idea of establishing border haats was not taken into account. However, the two governments could utilise the Memorandum of Understanding on the establishment of a JBC between UMFCCI and FBCCI, to discuss issues about various trade, investment opportunities, and potential to establish a border haat.

 

Dr Nazneen Ahmed is Senior Research Fellow, Bangladesh Institute of Development Studies (BIDS). [email protected]

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