Economics behind BBIN MVA

Economics behind BBIN MVA

The recently signed Motor Vehicle Agreement among the four nations BBIN, namely Bhutan, Bangladesh, India and Nepal, is a diluted version of the original MVA under SAARC that could not be negotiated due to resistance from Pakistan. The agreement aims at smooth movement of people, goods and services. The connectivity among the nations of South Asia would be stronger and beneficial. Asian Development Bank (ADB) provides financial help for the implementation of the Agreement.

According to MVA, the states are required to bear most of the costs related to its implementation. With high risks come great benefits. The transportation cost in the nations would reduce due to efficient and regular checks by the authority, transparency in the transportation rules and understandability of each other’s motor vehicle acts. With greater emphasis on comparative advantage, the pact is expected to facilitate greater trade and economic exchanges, develop transport and transit facilities and reduce economic and political barriers. It would strengthen South Asia, as a region, due to strong and supportive international relations. Not just that, some reports reveal that transforming transport corridors into economic ones would improve trade with rest of the world by 30%. Economies are interrelated and so are the benefits. A pact binding a few states is believed to even benefit others.

The pact very well declares its own rules and regulations. Authorized corridors/routes, obtaining permits, issuing diving license and all other technical work is under progress. Movement of the cargo would take a longer time for implementation. The government also hopes that the BBIN MVA would be transformed to the original SAARC MVA after the next SAARC Summit. The implementation may be delayed, but its advantages won’t.

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