Bangladesh needs to improve its diplomatic efficiency to face economic challenges in the post-graduation period, said experts on Wednesday.
China is going to leapfrog the United States to become the world's biggest economy soon. Asia can be the most robust economic belt in the global economy, they pointed out at a webinar.
So, Bangladesh must maintain productive relations with both China and India without falling into anyone's power orbit, the speakers added.
The country should sensibly make efforts to attract financial assistance and trade facilities from these countries by strengthening economic diplomacy, which will help to cope with post-LDC challenges with ease, they said.
The Economic Reporters' Forum (ERF) in collaboration with the Research Policy Integration for Development (RAPID) and Friedrich-Ebert-Stiftung (FES) organised the virtual discussion titled "Rise of geo-economics and Bangladesh".
ERF President Sharmeen Rinvy chaired the event while General Secretary SM Rashidul Islam moderated it. Chairman of RAPID Dr Mohammad Abdur Razzaque presented a keynote paper.
In his keynote paper, Razzaque said geopolitics and geo-economics are now integrated, and Bangladesh has to develop its diplomatic and economic policies very carefully.
He suggested that policymakers make vigorous efforts to sustain existing facilities that the country has been receiving from the European Union (EU) countries and other major nations such as China, Japan and India.
"Bangladesh should not rush to sign a Preferential Trade Agreement (PTA) or a Free Trade Agreement (FTA) and should develop its negotiation and handling capacities."
Abdur Razzaque said while Asia has been experiencing heightened geopolitical tensions on many fronts, the battle for Asia hegemony has strained the China-India relationship with profound implications for a country like Bangladesh, which aims to benefit from growth dynamics of the two regional economic powers and enhanced regional cooperation from South to East Asia.
Bangladesh's geographical location in close proximity with the world's two largest economies – China and India – provides enormous opportunities for boosting exports, attracting foreign investment, and achieving economic diversification. As a least developed country, Bangladesh enjoys duty-free market access in most products in both countries, but export growth to these markets has been much less than potential, he added.
Bangladesh's merchandise exports to India grew gradually over the past two decades from $80 million in FY01 to $1.25 billion in FY19. On the other hand, exports to China expanded from about $100 million in FY09 to reach a peak of $950 million in the fiscal 2016–17 before falling to less than $700 million in FY19. In contrast to modest exports, China and India are the two most important sources of Bangladesh's imports.
Commerce Tipu Munshi as the chief guest said, "We have to develop our economic diplomacy. We also need to prepare for facing challenges in the post-LDC situation. Now, our focus should be on Asian markets to boost trade."
"We have already signed a PTA with Bhutan and will strike PTA and FTA with 11 more countries in the next six months. In the beginning, Bangladesh may not get many facilities under these deals, but Bangladesh will benefit in the long run," he added.
Tipu said the economy across the globe, especially in the less developed countries was vulnerable even before Covid-19, but the pandemic coupled with a trade war between China and the US has made it further vulnerable.
"We are aware of the situation and preparing mid-term and long term plans to face the challenges. All ministries concerned are working on how to overcome this situation," the minister said adding that the foreign missions are also working to explore the new markets.
Commerce Secretary Dr Md Zafar Uddin said that Bangladesh is ready to embrace the scenario after the graduation.
"We will make efforts to continue the facilities that the country is now availing from the countries of European Union, China, Japan and India," the secretary said.
He said Bangladesh has prioritised a number of products except readymade garments to face challenges and also to grab opportunities after the LDC graduation.
Syed Nasim Manzur, managing director at Apex Footwear Ltd, emphasised looking at Asia's potential markets instead of looking for western markets.
"This is a time for Asia as it will be the centre of half of the world's economies by 2050. So, we should explore the potentials of these economies."
He said, "Now, a lot of investment will come to Bangladesh. We have to bring development and investment projects under our own policy. We need to look at the consequences of Chinese investment in Sri Lanka or Africa."
Former ambassador M Humayun Kabir stressed the integration of works and plans among the commerce ministry, the foreign ministry, and the finance ministry to face challenges developed by trade war between China and the US and also after graduation.
"Development and diplomacy should go hand in hand. Our missions should focus closely on how to develop investment and trade and business."
Barrister Nihad Kabir, president at the Metropolitan Chamber of Commerce and Industry, said the country needs to develop negotiation skills and capacity to handle post-graduation scenarios.
"The policymakers should understand very clearly about the global link, its advantages, its definition and how to minimise the negative impact of geopolitics and geo-economics," he added.