Trade deficit
The balance of trade is the difference between the monetary value of exports and imports of output in an economy over a certain period of time. A favourable balance of trade is known as a trade surplus and consists of exporting more than is imported, whereas an unfavourable balance of trade is known as a trade deficit or, informally, a trade gap.
At first Bangladesh started to open up its economy by liberalizing its trade policy during the mid-80s. Later it got momentum while the concept of globalisation of market spread all over the world. So Bangladesh started to join regional and world economic forums e.g. Saarc, WTO, BIMSTEC etc. aiming at boosting international trade.
However, there are lots of arguments for and against this globalisation concept across the globe. There is little doubt that globalisation is a threat to weak states like Bangladesh, but for disciplined and efficient states it provides opportunities to foster growth and economic development. As a result, Bangladesh suffers huge trade gap with next-door countries. It currently suffers a significantly large deficit with India. In the year 2007- 08 Bangladesh's imports from India stood at US$ 3375.10 million, while exports amounted to US$ 358.08 million. It is to be noted that only 1 per cent of India's total imports are from Bangladesh, whereas over 15 per cent of Bangladesh's total imports come from India.
Bangladesh also suffers trade gap with Pakistan. The two-way trade between these two countries in recent years has been in the range of US$ 300-$ 350 million, and Bangladesh's exports have hovered around US$ 70 million only.
Though Bangladesh is one of the signatories of SAFTA effective from 1st July, 2006, it does not bring any trade benefits for the Saarc nations. The main impediment of trade in South Asia is lack of confidence at political level and most of the countries in the region consider business from the political point of view. Besides, the political and military rivalry between India and Pakistan is another significant reason for Saarc's inability to play a crucial role in integrating South Asia.
Finally, I would like to mention that Bangladesh should pursue bilateral FTAs with its neighbouring countries such as India, Pakistan, and Sri Lanka etc. It would significantly help to narrow down the trade gaps with its neighbouring countries. Besides, as Bangladesh has deficiency in negotiating skills, it cannot bargain effectively before the global forums to capitalize on its logical demands. So, Bangladesh has to take the initiative to augment negotiation skills of the government officials by arranging suitable and timely training programmes and devise appropriate policies. Otherwise, we will invariably face huge trade deficits with the neighbouring countries and the rest of the world.
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