The United Kingdom will extend the Generalised System of Preferences (GSP) for three years as a grace period to Bangladesh after it graduates from the least developed country (LDC) status to a developing one.
After that period, the UK will make a decision according to its trade policy, British High Commissioner to Bangladesh Robert Chatterton Dickson told reporters at a press conference in his Dhaka residence on Wednesday.
Mentioning that around 15 UK companies are interested in investing in the country's higher education, financial service, healthcare and ICT sectors, Dickson encouraged Bangladesh to further improve its business environment.
On Tuesday, at the first meeting of the UK-Bangladesh Trade and Investment Dialogue at the commerce ministry in Dhaka, the British high commissioner said the UK will continue to provide the GSP facility for Bangladesh similar to the European Union.
"If Bangladesh achieves LDC graduation in 2024, the UK will extend GSP to the country till 2027," he said.
The Bangladesh government recently expressed its interest for LDC graduation in 2026 due to the impacts of the Covid-19 pandemic, in a recent meeting with the United Nations Committee for Development Policy.
Clarifying the UK's stance on this matter, Dickson said if Bangladesh graduates in 2026, the country's GSP facility in the British market will continue till 2029.
Bangladesh's annual bilateral trade with the UK is around £3.4 billion. Of this, £2.8 billion are from exports and £600 million from imports. The country has been giving duty free export facilities to 99% of Bangladesh's products since 2019.
Before that, Bangladesh used to receive the same facility from the UK under the European Union's "Everything but Arms (EBA)" scheme.
Addressing Wednesday's press conference, Dickson said, "Bangladesh – which is the eighth most populated country in the world – is very attractive to international investors due to its big domestic market, positive economic growth and a large youth population.
"But to avail more foreign investments, it must make a series of efforts, including further improving its business environment. This issue requires political commitment."
He continued, "Bangladesh is not getting its expected foreign investment due to hurdles posed by bureaucratic red tape, corruption, lack of coordination between ministries and tax related complications.
"If Bangladesh manages to improve its ranking in the Ease of Doing Business Index by overcoming these hurdles, the country will easily graduate to a middle-income country."
Mentioning that Bangladesh currently ranks 168th on this index, Dickson said, "Bangladesh must improve in a significant number of sectors to avail more foreign investment. The country must ensure a financial sector fit for a middle-income country.
"Bangladesh's tax policy is unpredictable, and launching a business in this country is difficult. There are problems with issues such as 'ability to enforce contract' and 'property dispute resolution'. Protection of intellectual property is also lacking in the country, which is a concern for the international investors."
He further said, "Bangladesh will surely become more attractive to the international investors after improving its business environment. The country needs to strengthen its financial sector, insurance and capital market for graduating to a middle-income country."
Dickson said, "I mentioned the UK's interest towards investing in Bangladesh's higher education sector during the first UK-Bangladesh Trade and Investment Dialogue. Since 2016, at least nine UK universities have expressed interest in investing in Bangladesh.
"Top universities – that focus on technical and professional sectors – want to invest in Bangladesh and achieve success similar to Sri Lanka and Malaysia. These universities will help provide international standard education under the British curriculum to Bangladeshi people."