Brunei can open the doors of potentiality
The government of Bangladesh should strengthen ties with the government of Brunei in order to improve its growth and survive the energy crisis, especially through providing Brunei with a cheap source of meat and labour, with the latter sending back remittances to Bangladesh
The visit of the absolute monarch of Brunei is one of the successes the Bangladesh government achieved this year through its diplomatic activities. This is the first time the ruler of the country - with the fifth highest GDP per capita - visited Bangladesh.
Undoubtedly, this is an important step in the development of bilateral relations.
The UK deigned to give Brunei "independence" on 1 January 1984. A few months later, Bangladesh established diplomatic relations with them. Bangladesh's High Commission in Brunei was closed in 1988 and in 1997 it was reopened.
Last year, the two countries celebrated 35 years of bilateral relations. On that occasion, the Prime Minister of Bangladesh went on a three-day visit to Brunei in April 2019, during which seven agreements were signed between Prime Minister Sheikh Hasina and Sultan Hassanal Bolkiah.
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The Sultan's recent visit maintains that continuity. The visit comes at a time when almost all international circles, from the United Nations to the IMF, are sounding warnings of an impending crisis. As a result of US sanctions in response to the Russian-Ukraine war, there has been massive inflation and an energy crisis throughout the world.
As the situation prolongs, famine threatens to engulf parts of the world next year. In such a situation, the current government of Bangladesh has no alternative but to attempt to improve bilateral relations in order to mitigate the impending crisis.
Dwindling dollar reserves is constantly increasing inflation. To curb this, the government has tried to increase sources of foreign exchange earnings. But imports of Bangladesh are much more than the exports.
According to Bangladesh Bank, there was a record trade deficit of about $31 billion in the last fiscal year. Bangladesh's trade deficit with the outside world is increasing due to the rising prices of all types of commodities, including energy, in the world market, not to mention the lack of expected remittance flow.
Within the limits of the system, there is no alternative but to expand the export sector in order to attempt to cope with the prevailing situation. And in this case, Brunei can be one of the destinations. Rich in oil and gas resources, Brunei is largely an import dependent country. The country is currently focusing on ensuring food security to face future crises.
As a result, there is a huge potential for the export of agricultural products and techniques. Besides, labour export can play a big role in increasing remittances. Bangladeshis living in different countries do not remit as much as the government needs, to the point that recession is threatening. In this situation, Brunei can open new doors in this sector.
Brunei is interested in increasing mutual cooperation and economic diversification, ensuring food security, human resource development, building infrastructure, improving health services, and developing energy sectors, and its government wants friendly countries to implement the development programs adopted under their Vision 2035. To realise this vastly expanded vision, the sparsely populated country needs a larger workforce.
Brunei is expanding its petro-chemical sector, which could create opportunities to employ more Bangladeshi labourers in Brunei in the near future. Bangladesh is fully capable of meeting this demand. About 20,000 Bangalee workers are already working there. Their average salary is Tk60-70,000.
Bangladesh's government plans to lease land abroad and send farmers there to increase food production. In this case, if Brunei is selected as the destination, besides increasing the government's income, a lot of employment will also be created. Brunei can also be one of the sources to ensure rapid economic growth and supply of Bangladesh's increasing energy demand.
Under the Government to Government (G2G) agreement, the two countries could further expand liquefied natural gas supplies, which may increase bilateral cooperation in petrochemicals, offshore oil and gas exploration, technical cooperation and capacity building.
As a Muslim country, trade in halal products is an attractive option with Brunei. There is an ample supply of buffaloes, cows, and goats in Bangladesh. In particular, Sultan Bolkiah is interested in the country's Black Bengal goats.
On the other hand, technological accessibility is constantly increasing globally. Bangladesh has already provided a "digital maintenance system" of banking and other sectors to various South Asian countries, especially Nepal. Brunei could also establish such technical cooperation.
However, in developing mutual relations, emphasis should be placed on increasing bilateral trade, which is still far below its potential. We have an attractive investment package and a hundred economic zones. Bangladesh is one of the countries with the most liberal foreign investment facilities in South Asia. These benefits include the protection of foreign investment by law, a liberal tax policy, and a favourable tariff regime on machinery imports. By exploiting these possibilities, Brunei can enter the global 'halal food market'. The expertise of Brunei businessmen in this sector is proven.
Besides, Bangladesh is fast becoming a major global centre for quality medicines. Medicines from Bangladesh are going to more than 100 countries, including the USA, the UK, and Australia, as well as several countries in Africa.
Bangladesh is attracting global attention by building world-class seagoing vessels. Bangladeshi companies have supplied passenger and cargo ships to 14 countries, including countries of Europe.
But, despite having ample investment opportunities, there are some reasons why Bangladesh is not getting the desired level of investment. Notable among them are opaque commercial laws, lengthy procedures, and political instability. An effective solution to these problems must be found quickly. This will ensure huge investment from various countries, including oil-rich Brunei.
But the good news is that Bangladesh's cooperation with Brunei has expanded in various fields, including trade, investment, energy, agriculture, and human resource development, in the last decade.
During the Sultan's recent visit, agreements were signed on various issues, including aviation, energy, and labour export. However, the most importance should be given to the energy sector, because the main symptom of the global crisis is the energy crisis. The main reason for the unstable economic environment in Bangladesh is the energy crisis, which is contributing to rampant inflation.
Therefore, in future discussions on mutual cooperation, energy import should be ensured to the maximum extent possible. Along with this, bilateral, friendly, and brotherly sustainable relations should be developed, so that this relationship can play an effective and timely role in dealing with the global recession and may play an active role in the future, depending on the situation and needs.
Arman Sheikh is a writer and columnist
Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily reflect the opinions and views of The Business Standard.
