Bengal Tiger: Bangladesh poised to tighten trade & investment ties with EU

The Rise of Bengal Tiger: Potentials of Trade and Investment among Bangladesh and the EU Countries

“The EU is our trusted and tested partner in taking our developmental journey forward and this was confirmed by our excellent meetings with the European institutions during the participation of HE Prime Minister Sheikh Hasina at the Global Gateway Forum in Brussels last week. It was a recognition of a democratic, secular, progressive and new Bangladesh by our friends in the EU,” said HE Mahbub Hassan Saleh, Ambassador of Bangladesh to the Kingdom of Belgium, the Grand Duchy of Luxembourg, and Mission to the European Union.

We decided to elevate our partnership based on common values to a new level and will be announcing the launch of negotiations for a new Partnership and Cooperation Agreement very soon,” the Ambassador continued, in a conference titled “The Rise of Bengal Tiger: Potentials of Trade and Investment among Bangladesh and the EU Countries”, which took place on Friday, November 3rd at the Hotel Steigenberger in Brussels.

The conference, organised by Bangladesh Securities and Exchange Commission (BSEC) and Bangladesh Investment Development Authority in partnership with the Embassy of Bangladesh in Brussels and Mission to the European Union and European Institute for Asian Studies (EIAS) also heard from Mr. Peteris Ustubs, Director (Middle East, Asia, and Pacific), Directorate-General for International Partnerships, European Commission, saying: “We were privileged to welcome Prime Minister Hasina in Brussels for the first time in a decade.

“We have signed a number of financial agreements in support of the growth and transformation agenda of Bangladesh, strengthened green energy facilities in Bangladesh with a strong emphasis on solar and wind energy, committed to transforming railways and raw water conveyors in Bangladesh to improve regional connectivity and transport capacity as well as sustainable development.

“Together with the EU grants from the European Fund for Sustainable Development Plus (EFSD+), in total 1 million EUR were pledged for Bangladesh last week. This is strong evidence of our partnership and a strong signal that our global gateway is in action, especially in Bangladesh.

“Our track record on trade with the EU is remarkable. Last year, Bangladesh exported more than €24 billion to the EU. This is an impressive 15 percent annual increase.

“Thanks to its human capital, its strong export and investment policies, Bangladesh is on a strong path to success, not only to graduate from the Least Developed Countries (LDCs) but well beyond reaching new development horizons and economic freedom. The EU is proud to participate and partner to support Bangladesh’s investment and trade agenda, which will lead to transactive change in the country”, he added.

Focusing on the 50 years of rise of the Bengal Tiger, Professor Shibli Rubayat-Ul-Islam, Chairman of the BSEC, highlighted that Bangladesh is the 8th most populous country of the world (169 million) in a land area similar to the state of New York (148,460 square km) with a GNI per capita of $2824, which makes its density of population the highest among all countries with a population over 10 million.

Stressing that Bangladesh stands on a very strategic position in South Asia, situated between the land of sustainable prosperity European Union, growing China, dynamic Middle East, incredible India and flourishing Thailand, Vietnam, Indonesia, and Singapore, he added:

“The EU is the largest export market for Bangladesh, accounting for more than 60 percent of our exports. Growth of export to EU market by Bangladesh was 51.85% in 2022 compared to 6.15% in 2013. The share of RMG (apparel) export in total export in EU by Bangladesh was 91.30% in 2022. Apparel is the backbone of the Bangladeshi economy.

“Bangladesh (21.2%) has secured the top position in terms of quantity (apparel) surpassing China (17.01%) for the first time in EU market. Bangladesh ranked second after China in terms of value (apparel) exported to EU market during 2022”, he underlined.

Sheikh Hasina.

According to Rubayat-Ul-Islam, “One of the main achievements of Prime Minister Sheikh Hasina has been securing unprecedented socioeconomic development of the country.”

Under her leadership during the last 14 years, there has been tremendous growth in a variety of sectors, including poverty alleviation, education, healthcare, power generation, infrastructure development and Bangladesh has been labelled as South Asia’s economic miracle.

From 2006 to 2022, the GDP grew from 5.4 to 7.25 percent, per capita income increased from $543 to $2,824 dollars, foreign reserves rose from $0,74 billion to $30.83 billion, export revenue surged from $10,05 billion to $52,97 billion, remittances increased from $4.8 billion to $24,03 billion, investment to GDP ratio hiked from 22.78 percent to 32.05 percent.

At the same time, poverty rates decreased from 41,51 percent to 18,7 percent and average life expectancy increased from 59 years to 72.8 years.

Literacy rate increased from 45 percent to 75,6 percent, which has been accompanied by an increase in the number of internet users from 0.23 percent to 73.5 percent as well as a rise in women participation in primary education from 54 percent to 98,2 percent. Moreover, Bangladesh is the most gender-equal country among South Asian nations, ranking 71st in the world according to the World Economic Forum’s Global Gender Gap Report 2022.

Prime Minister of Bangladesh Hasina was named among the top three inspirational women leaders who have demonstrated extraordinary leadership during Covid-19 pandemic in the Commonwealth.

She was awarded the UN’s highest environmental accolade “Champions of the Earth” and the prestigious Vaccine ‘Hero Award from Global Alliance’ for Vaccines and Immunisation (GAVI). Last but not least, she received the ‘SDG Progress Award’ for Bangladesh’s steady progress in achieving SDGs and became a ‘Champion of Skill Development for Youth’ for Bangladesh’s great success in youth skill development.

Bangladesh was adorned with a crown for its achievements in development: Bangladesh is the only country that met all three criteria for “graduation from LDC” by 2026.

Earlier, it upgraded itself to the World Bank’s “lower middle income” category by increasing its Gross National Income in 2015.

J.P. Morgan labelled Bangladesh as one of the “Frontier Five” economies.

Bangladesh is on track to become a $500 billion economy by 2023 according to Standard Chartered & a $1 trillion economy by 2040 according to a Bloomberg study.

As Bangladesh gains global appreciation as one of the fastest-growing South Asian economies, its nation brand sees the highest increase in value (37%) and ranking within the 2023 Global Soft Power Index. Bangladesh has been also ranked seventh out of ‘Top Ten Best Value’ travel destinations for 2020 launched by Lonely Planet, a global leader of travel guidebook publisher.

EU-Bangladesh relations date back to 1973: in 2001, the EU-Bangladesh cooperation agreement was signed, which laid the foundation of trade relations with the EU that provided Bangladesh with duty-free access to the Union market under Everything But Arms (EBA) initiative.

Having a young population with a median age of 27,6 years Bangladesh is the 34th largest economy in the world, the largest jute exporter, second largest garment exporter, third largest vegetable producer and fourth largest rice and fish producer.

The guest of honour of the event Mr. Edvardas Bumsteinas, Head of Asia and Pacific Division, Public Sector Operations, Global Partners Development, European Investment Bank (EIB) highlighted: “What we see is a success story between the EU and Bangladesh, coinciding with the 50-year anniversary of their partnership.

“Last week in these same premises in Brussels, we completed two signatures: a loan of 350 EUR and an EU investment grant of 39 million EUR and a technical assistance grant of €6 million to support the green energy transformation in Bangladesh in cooperation with EU institutions and EU financial institutions. The EIB committed €200 million of loans for the emergency response and the resilience of the health sector in Bangladesh during the pandemic.

It pledged €245 million to modernise the Bangladeshi railways and €100 million to increase the water supply for the residents of Dacca. Looking forward, we have additional loans for new raw water conveyers as well as projects in urban metro and railways, which could potentially benefit from €600 million in the future. €1 billion in total were pledged to Bangladesh last week but this can double in the coming two years.”

Ambassador Saleh concluded: “We see 50 years of development miracle in Bangladesh. We have been framed as a role model of development by Ban Ki-moon.

“The achievements under the leadership of Prime Minister Sheikh Hasina are remarkable and Bangladesh is aspiring to become a trillion-dollar economy while transforming from Digital Bangladesh to Smart Bangladesh by 2041.

“We have 100 percent electricity coverage everywhere and numerous mega projects, including the construction of the first under-river tunnel in South Asia. We can be proud, but we are not complacent.

“Everything but Arms (EBA) played an important role in contributing to the social, economic, and developmental journey of Bangladesh, which continues in an incremental pace.

He concluded, “We are grateful to the EU for extending the EBA for 3 more years after Bangladesh’s graduation from its status as LDC in 2026. But for reasons, such as the pandemic and Ukraine-Russia war, we are requesting three additional years, which will give us sufficient cushioning time to smoothly transit from an LDC to a developing country”.