After South Korea’s graduation from the LDC basket back in the 70s, the country put more emphasis on diversified export-oriented industrial sectors and that is why today South Korea is pioneer in manufacturing and exporting of electronics, chemicals, heavy industry, automobiles and machineries. Bangladesh can replicate this transformation from labour intensive industries to export-oriented industrial sector to overcome the upcoming challenges of LDC graduation as well as to prepare for the future. Speakers told these at a virtual dialogue on “Bangladesh-South Korea Trade and Investment Cooperation: In the context of LDC graduation” arranged by Dhaka Chamber of Commerce & Industry on April 19, 2022. Senior Secretary of Ministry of Foreign Affairs Masud Bin Momen joined the event as chief guest while Kihak Sung, Chairman and CEO of Youngone Corporation joined as guest of honour. M Delwar Hossain, Ambassador of Bangladesh to South Korea joined the dialogue as special guest.
President of Dhaka Chamber Rizwan Rahman in his opening remarks said South Korea was the 10th largest exporter to Bangladesh in 2021. In 2021, bilateral trade of Bangladesh and South Korea was around USD 1.525 billion with a negative balance of USD 727 million for Bangladesh. Bangladesh has many other promising and priority industrial sectors like Agro & Food Processing, Plastic manufacturing, Jute and jute goods, light Engineering and automobiles sector, Hi-tech parks, 4IR technologies and structured economic zones where Korea can invest in the form of Joint venture, said Rizwan Rahman. Currently, around 95% of our export items to South Korea receives Duty-Free Quota-Free (DFQF) facility under the preferential scheme for the LDCs. However, these facilities will not exist later LDC graduation. Despite this fact, we urge Korea to extend DFQF and slow tariff rationalization facility till 2030 considering our preparedness time for next transformation. Considering our deep economic tie, hence, the feasibility of signing FTA can also be assessed. We believe that FTA will enhance the economic connectivity of South Korea with Bangladesh and South Asian region, Rizwan Rahman added.
Masud Bin Momen, Senior Secretary, Ministry of Foreign Affairs said that S. Korea is our trusted partner and we always have assistance from the country. About 150 S. Korean companies are now in operation in Bangladesh that indicates their keenness about investing in Bangladesh. He also expressed his hope that after Bangladesh’s LDC graduation, S. Korea may continue preferential treatment for Bangladeshi export items. Mr. Momen also said that government will give special focus to revisiting decades-old bilateral agreements, exploring the possibility of signing FTA to facilitate deeper partnership, regular exchange of trade missions and direct connectivity between Dhaka and Seoul. He also underscored the importance of creating skilled human resource to face the upcoming challenges of enhancing productivity.
Kihak Sung, Chairman and CEO of Youngone Corporation said that the investment of Youngone Corporation in Bangladesh is about USD 600 million. In next five year time RMG export to S. Korea will reach to USD 1 billion, he hoped. After LDC graduation, Kihak Sung said that Bangladesh should focus to sign a win-win FTA with S. Korea prior to a high level consultation. As S. Korean investment are coming to Bangladesh’s high-tech industries, therefore, stable and high quality energy supply is very important, he opined. Moreover, he urged for smoother customs and port facilities, easy tax regime, smooth inland transportation system and product diversification for easy export process. He also stressed importance of enhancing labour productivity and efficiency for better production. He termed S. Korean sea food market as a potential destination for Bangladeshi sea food exporters. Terming IT sector a very promising one, he said that Youngone Corporation already made a high-tech park together with the Bangladesh government and in next few years they are going to invest minimum of USD 200 million.
M Delwar Hossain, Ambassador of Bangladesh to South Korea said that after LDC graduation we will be in need of robust product diversification to increase our export to South Korea to mitigate the trade gap. He also mentioned that regular communication between the trade bodies of both the countries is also crucial for boosting bilateral trade. S. Korea is the fifth largest foreign investor in Bangladesh, he said. S. Korean investors are now showing interest to invest in electronics, home appliances, automobile and high-tech industries.
Jong Won Kim, Director General, Green Growth Department, KOTRA said that Bangladesh should now prepare itself to face the challenges of LDC graduation. He also said that Bangladesh needs to give emphasis on export oriented industrialization rather giving more focus to labour intensive industries.
Shahab Uddin Khan, Advisor, Korea-Bangladesh Chamber of Commerce said that the bilateral trade between S. Korea and Bangladesh is near USD 2 billion and it has got a momentum in last few years. 80% of our export to S. Korea covers RMG product, so we need to diversify our products range, he added. But above all, if we can simplify process of starting a business and remove current obstacles, more and more fresh FDI from S. Korea will come, he said. Dhaka Chamber’s Senior Vice President Arman Haque gave the concluding remarks at the function.