WBD Supports Launch of USAID’s Cross Border Trade and Connectivity (CBIC) Program

The United States is committed to improving its economic relationship with South and Southeast Asia and ensuring that the benefits are broadly shared. This shared prosperity is founded on sustainable, inclusive growth which cannot happen without increased trade, investment, and integration throughout the region. Under the Private Sector Engagement (PSE) umbrella, USAID launched the Cross-Border Infrastructure and Connectivity (CBIC) Activity, a multi-year effort to promote sustainable, transparent, and high-quality infrastructure and regional trade connectivity program in South Asia.

WBD plays a pivotal role in advancing USAID’s PSE Policy. In collaboration with the U.S. Agency for International Development (USAID) Asia Bureau and Indo-Pacific Office, and in consultation with the U.S. Department of State/South Central Asia (SCA), and in consultation with public and private sector stakeholders across the region, WBD identified several high-impact activities that will improve cross-border infrastructure and connectivity. Selected initiatives include the following:

  • Trade and connectivity training and capacity building across the Bay of Bengal Member States
  • Upgrading and Greening of Inland Vessel Fleet
  • Jangipur Regional Water Connectivity
  • Multimodal Hub and Freight Village in Balagarh
  • BIMSTEC Institutional Capacity Building

Each of these activities was developed through the lens of the COVID-19 economic crisis, whichthat reversed decades of gains across the development world. The CBIC activities were developed with the Administration’s and G7’s Build Back Better World initiative in mind by supporting the development of high-standard, private sector-driven, and transparent infrastructure partnerships across South Asia and South-East Asia.

WBD kicked off the 11-month long trade and connectivity training and capacity building program in October 2021. The principal aim of the training is to raise awareness on the broad connectivity agenda, especially trade, transit, and infrastructure connectivity, and build the capacity of public and private sectors, civil society and the research community to further regional integration trade and foster inclusive and sustainable trade policies. Led by Dr. Nihal Pitigala, Lead Economist at WBD and in collaboration with SANEM (Dhaka), the first two-day session featured a Keynote Address by Dr. Arvind Panagariya, Professor of Economics at Columbia University and an Expert Panel consisting of some of the top thinkers on regional trade in Asia. The event drew over 150 government and non-government representatives in a robust interactive discussion on the way forward for Bay of Bengal member states to foster closer regional cooperation.

The inaugural session of the training program held on October 7 was specifically oriented around crisis recovery options through increased regional integration among Bay of Bengal member states. The training program will also include dedicated sessions on the post-COVID shifts in global supply chain and how they affect the region and policy responses to mitigating the effects, including the need to promote regional transportation and logistics infrastructure.

The three infrastructure related activities will directly support this goal. USAID’s investment in feasibility studies is aimed to unlock both public and private sector investment in connectivity infrastructure, while promoting standards and climate-friendly solutions. The inland waterways system is a crucial economic and social means of connectivity in South Asia, as many areas and thousands of communities of Bangladesh and India are only connected via the waterways. Though Bangladesh and Myanmar have large quantities of available inland vessels, the quality of these vessels is relatively low due to their old age, high use of fossil fuels, high emission levels, and generally small vessel size. The need to “green the fleet” is a prerequisite for further development and modernization of the sector and the promotion of the waterways as the cleanest mode in the transport system and a major step towards local and multilateral environmental standards. Ensuring that the infrastructure and fleets raise standards and reduce their negative impact on waterways that also serve as an important natural resource for irrigation, fisheries, and other economic activities—all critical to support livelihoods in rural communities.

Ground transport also remains important from a connectivity standpoint with. The feasibility study for a freight village in Balagarh will provide synergies for multimodal activities. The successful implementation would reduce the time and cost of trading, both internally in India and cross-border with Bangladesh and other countries in the region, especially Nepal and Bhutan. It will improve the trade routes for landlocked countries and lead to efficiency improvements as compared with the present transport chains and will create new economic activity, generate income for the private sector and communities across the border region, as well as for public parties in the form of land lease, user fees and taxes.