Expanding our regional economic horizon

adv-06

AKM Asaduzzaman Patwary, Executive Secretary DCCI.

Bangladesh has become one of the remarkable success stories and role models in the world with significant progress in various socioeconomic fronts backed by strong economic fundamentals and base. Our economy achieved 6% plus average growth over the past decade and regained growth spree in FY2022 holding pandemic stress while many developed economies were seen underperforming.

Bangladesh has been termed as the 5th top resilient economy globally due to quick pandemic recovery management and timely endeavor for global trading system revival. With the consistent performance in major economic indicators including foreign trade, Bangladesh has qualified and poised to graduate into a developing economy by 2026 followed by a transformation into a developed economy by 2041. Bangladesh recently changed its orientation to be an export-oriented economy as international trade has exceeded the $150 billion milestone with $60 billion in export trade for the first time in the country. Bangladesh has been maintaining a steady and friendly trade relationship with many countries. China and India, the Asian economic powerhouses, are the major trading partners of Bangladesh if they together contribute 25% of the total trade of Bangladesh. Evolving economic performance has been facilitated by our friendly regional and global fraternity. Our relentless friendly attitude to foreign economic cooperation has been widely recognized.

Bangladesh, being at the intersection of South Asia and Southeast Asia, secures a strategic position in the Indo-Pacific region. This position with connectivity not only created huge economic leverage for Bangladesh and India but also other scopes to explore across the regional members in Asia and beyond annexing with other economies, especially in the BIMSTEC and beyond Asia.

Bangladesh and India, two long-standing friendly neighbors in South Asia, have been maintaining smooth diplomatic and economic relations over the last five decades based on our growing fraternity. The relationship between the two friendly countries has reached into a new height encompassing trade, investment, and human and cultural ties hitting our trade to USD 15.68 billion with compounded growth though it is unilateral supporting Indian outbound trade with a huge trade imbalance for Bangladesh. India is the second largest trading partner of Bangladesh and Bangladesh is the fourth largest export destination of India after the USA.

Both countries have the potential to reach trade to USD 20 billion by addressing some long-standing non-tariff barriers in our foreign trade process. In the coming days, Bangladesh is keen to create balanced bilateral economic relations with India and other trading partners through increment of export product basket, exploring new markets in Asia and Africa, Latin America apart from the EU and the USA, and rational reduction of the trade gap. Many non-tariff challenges are holding back our spontaneity and motivation for further trade growth with India including Rules of Origin (RoO), degrading SAFTA protocol, non-recognition of certificate of Bangladesh Standards, unwarranted anti-dumping duty, enhanced lead time, unplanned trade embargo due to inadequate infrastructure facilities at major land ports. In addition, the scope of trade growth into the Northeastern region of India from Bangladesh is not supported by India. Connectivity leads to productivity and prosperity.

BIMSTEC, BCIM, and BBIN-MVA have united India, Bangladesh, and other members of this region for shared future and economic potentials to translate our smooth economic future through positive and coordinated efforts by all member countries of these blocs.

Indian Ocean Rim Association (IORA) is the apex regional group to promote economic cooperation and sustainable development within the Indian Ocean region as this regional club engages 23 countries including Japan and the USA. Promotion of trade and investment is one of IORA’s priorities. Countries in the Indian Ocean Rim region have been connected through commercial activities for centuries and the region is still a hub of global trade and investment. Thus, IORA has the potential to become an important region creating various economic dimensions for Bangladesh in the coming years connecting East Africa, Southern Africa, the Middle East, South Asia, and Southeast Asia through maritime routes enabling other economies. IOR states can benefit from considerable and multiple trade and investment relations. Most IOR member States have a common view that the efficient use maritime economy can contribute to creating jobs and ensuring sustainable economic growth in many manners.

Bangladesh can maximize its maritime potential. Bangladesh is also advancing its blue economy agenda and deep diplomacy and connectivity with IOR, and the extended BRI silk route may compound the greater benefits of Bangladesh and other members of this region to a large extent. Considering the importance of integration of connectivity and shared economic development needs, strategic partnerships aiming for economic environmental, and regional peace can be made for milestone economic cooperation.  

Given the above perspective and growing geopolitical context, tested and long-standing economic neighbors need to deepen economic ties. The following are to be addressed and dealt and cared for harnessing the untapped potentials of the future to benefit most of the economies in the region:

  • The initiative of signing the Comprehensive Economic Partnership Agreement (CEPA) between India and Bangladesh is in progress. This needs to be expedited to double-trade.
  • Bangladesh and India can work together to strengthen trade and transport connectivity allowing Bangladesh to go into third countries as a transit route.   
  • Bangladesh and India have a strong basis in the textile industry focusing more on the production of value-added apparel items and innovation in product development and process optimization. India has a huge pool of designers and technical experts in diverse sectors and exchanges of knowledge and expertise to benefit both countries.
  • The Bangladesh, Bhutan, India, and Nepal Motor Vehicle Agreement (BBIN MVA) is discussed aiming at an economic corridor connecting Bangladesh, Bhutan, India, and Nepal by road.We believe that the much-needed BBIN-MVA will be implemented soon as the key surface route and enabler of BBIN to enhance inter-regional trade with greater market access.
  • Since Bangladesh and India are neighboring economies, this is going to facilitate bilateral economic cooperation in many manners through strengthening our transport and infrastructure connectivity, low-cost trade, export, trade and investment diversification, and facilitation aiming at bilateral interests.
  • Proposed investment of EU in India’s Northeastern States and India’s neighbors (Nepal, Bhutan, and Bangladesh) will help to improve and deepen the connectivity in this region. Bangladesh is constantly emphasizing integrated regional linkage for strengthening economic cooperation as we have a strategic geographic position in this region between Asia and Southeast Asia.

In line with the game-changing economic transformation vision, Bangladesh needs to unleash all business potentials beyond the existing connectivity in new destinations. India also needs a reliable and harmless economy and partners to steer the regional expedition ahead ensuring the common interest of India, the trusted and long-held economic partner of Bangladesh, may extend generous support addressing the pressing and integrated cross-border issues regionally. Thus, we can endeavor our smooth economic journey after the 2026 economic graduation milestone to achieve the economic transformation and extend room and support to regional economic acceleration to benefit all economies collectively in the years to come.