Bangladesh should not go for policies that undercut the country's opportunities to benefit from the Chinese One Belt, One Road (OBOR) initiative, said Metropolitan Chamber of Commerce and Industry.
“Understanding the overwhelming reach and potential of this project, it is evident that Bangladesh is poised to benefit enormously from the OBOR,” the chamber said in its July bulletin.
The project with $900 billion of planned Chinese investments ranging from ports in Pakistan and Sri Lanka to high-speed railways in East Africa to gas pipelines crossing Central Asia is arguably the largest overseas investment drive ever launched by a single country.
The plan was unveiled in 2013. The MCCI said, “Trade and investment will increase naturally out of the OBOR initiative and Bangladesh can become a force to reckon with if opportunities offered by the initiative in future are not wasted by incongruent policies.”
The chamber said the OBOR initiative is an ideal union of resource rich and resource poor countries, and once the project is fully completed, it can be expected to trigger collective growth.
“The project will not only benefit China because of its access to strategically important geopolitical locations but also other countries in the region.”
It said once the investments flow in, all countries party to the agreement will experience enhanced infrastructure levels and high infrastructure-led growth.
“Demand will increase which will act as catalyst for trade and investment expansion.”
The OBOR is a welcoming initiative and came at a time when the rise of protectionism and anti-globalisation is sweeping through the developed world.
“Bangladesh must take the opportunity to become a key player in the OBOR project, which may allow the country to pursue an infrastructure-led growth,” said the MCCI.
The chamber said while participating in a lofty initiative like the OBOR, good governance and law and order situation will need to be ensured since the land and sea routes in the new situation will be filled up by additional international traffic along with local ones.
Bangladesh's economy has doubled during the last decade, and with rising investments from China, the country can brace for phenomenal growth in the future.
“Development and prosperity go hand in hand and, and the advantage accruing out of Bangladesh's unique geographical location can't be allowed to fritter away.”
The chamber said a great boon for Bangladesh is China's moving away from low-tech, low-margin industries to high-tech, high margin industries.
Relocating many such manufacturing industries to countries like Bangladesh would greatly help them in lowering their labour costs. This would keep Bangladesh on the forefront of the OBOR project, the trade body said.
Bangladesh will also benefit from increased bilateral trade, said the chamber.
At present, Bangladesh imports $12 billion-worth of goods annually from China but exports goods worth only $1 billion to the country.
“This huge trade gap can be expected to narrow down a bit if free access to the large Chinese market could be ensured.”
Bangladesh has already requested China to allow duty-free access for 22 more products.
“If granted, this concession would somewhat reduce the trade deficit. To achieve success in that regard, however, serious efforts will be needed to diversify exports outside the garment sector.”