Bangladesh-US economic relations largely unutilised

The Bangladesh-US economic relations have largely remained unutilised 50 years past independence, exemplified by bilateral trade which is too poor when compared with that gained by some competitors, businesses said yesterday.

In 2019, the US had a bilateral trade value of $9 billion with Bangladesh, which is not that much considering the fact that it was only $4.1 billion in 2009.

In contrast, with Vietnam it was $81.3 billion, Malaysia $59.2 billion, Thailand $52.7 billion, Singapore $91.6 billion, Cambodia $5.9 billion, India $146.1 billion and China $558.1 billion.

The scenario was pointed out by A Gafur, director of Abdul Monem Economic Zone (AMEZ), at a virtual discussion on "US-Bangladesh economic relation: Migration to a developing nation", organised by the American Chamber of Commerce in Bangladesh (AmCham).

Gafur is not alone. Many businessmen in attendance spoke out about the untapped potentials.

Poor infrastructure, corruption, tax policies and export dependence solely on apparel are mainly to blame, said Gafur, also a former AmCham executive director.

"However, Bangladesh has more opportunities than challenges," he told the discussion attended by diplomats, business chamber leaders and senior officials of US companies operating in Bangladesh.

Bangladesh and the US signed a Trade and Investment Cooperation Forum Agreement (TICFA) in 2013 to remove trade barriers through discussions.

In their latest efforts to boost trade and economic relations, a US Bangladesh Business Council was formed last month.

Currently, the US is the single largest export destination for Bangladesh with shipments amounting to nearly $7 billion, some 90 per cent of which is garment items.

However, imports from the US have also been recently increasing in the form of agricultural products, nuclear power plant equipment, and machineries for garment factory remediation.

For many years, this import figure remained below $1 billion. However, importers say in 2019 it reached $2.3 billion.

"We have a wonderful resource, the US Bangladesh Business Council," said Earl R Miller, the US ambassador to Bangladesh.

The trade body is a powerful organisation for boosting bilateral trade and investment, he said.

Regarding investment potentials of Bangladesh's economic zones, Miller said these were good selling points but needed some labour issues to be resolved to attract foreign direct investment (FDI).

He also suggested Bangladesh take up branding initiatives and reforms in the tax policy for more US investment in Bangladesh.

The ambassador also said he was scheduled to hold an important meeting with the government within one month to discuss bilateral trade and investment issues.

Chairing the discussion, AmCham President Syed Ershad Ahmed said the chamber was also conducting research to identify the challenges and opportunities in economic relations.

Tapas Kumar Mondal, managing director of International Beverages Private, Bangladesh, a subsidiary of The Coca-Cola Company, sought amendments to the tax policy.

He said the company has no plan to cut investments in Bangladesh despite the presence of some big challenges in doing business here.

Md Nazrul Islam, executive chairman of the Bangladesh Export Processing Zones Authority (Bepza), said a new economic zone at Mirersharai in Chattogram would be coming into operation soon under Bepza where US investment was expected.

Rubaba Dowla, country managing director at Oracle Bangladesh, said the company was giving support to build smart cities in Bangladesh by providing ideas on environment, safety and public health.  Syed Mohammad Kamal, country manager of Mastercard and vice president of AmCham, moderated the discussion.