Bangladeshi diaspora can attract more Canadian investment
Bangladesh has enormous potential to attract more Canadian investment, particularly in readymade garment, IT, outsourcing, power and infrastructure projects, said a trade body leader.
So the government has to maintain a good connection with the Bangladeshi diaspora in Canada to lure prospective investors to Bangladesh, said Masud Rahman, outgoing president of Canada-Bangladesh Chamber of Commerce and Industry (CanCham).
“Trade between Bangladesh and Canada has been growing over the last five years.”
The two countries now trade goods and services worth more than $1.63 billion annually where Bangladesh enjoys a trade surplus, he said.
The two-way trade has the potential to reach the $4 billion mark by the next three years, Rahman told The Daily Star in an interview at the chamber's office in Dhaka recently.
Around 1.5 million Bangladeshis now live in Canada and the diaspora is growing fast, he said.
“We need to leverage their presence in Canada and encourage them to get involved in trade and investment in Bangladesh.”
Bangladesh's readymade garment has already emerged as a success story for the world, said Rahman, who served CanCham as president for six consecutive years. “So we can easily attract Canadian investment in the apparel sector.”
He said Bangladesh can also attract Canadian investment in other sectors such as IT and outsourcing, power and energy, cutting and polishing of diamond thanks to the availability of cheap workforce.
“Most of our business is done through companies based in Toronto and Montreal. We need to look beyond these two cities as Canada is a vast country.
"The best way to address this issue is to set up consulates in cities in different regions, like Toronto, Vancouver and Saskatchewan, and engage with and involve the members of the Bangladeshi diaspora scattered there."
He said Bangladesh has to participate in more roadshows in different provinces, like Saskatchewan, Manitoba, Alberta, British Columbia, Northern Territories and Yukon, to depict Bangladeshi success stories and explain its potential.
“We need to take initiatives to attract more Canadian trade and investment. We have to work hard to convince them to look beyond India and China and show the world what we have in Bangladesh,” said Rahman.
He said a little policy support can help boost the development of infrastructure projects in Bangladesh.
“We can use the resources of Export Development Canada (EDC) and the expertise of Canadian Commercial Corporation (CCC) for the development of infrastructure projects in Bangladesh.”
EDC is an export credit agency of Canada and CCC is the country's international contracting and procurement agency.
Necessary policy support from the Bangladesh government can make these two organisations work as partners for development of Bangladesh, he said.
The chamber chief also stressed formation of a partnership for cooperation in the energy sector between the two countries.
“We can focus on Alberta in energy cooperation and oil and gas exploration.”
Energy is Alberta's most important export sector which accounted for 71 percent of the total value of the Canadian province's exports in 2010, he said. “So, we can utilise their expertise and know-how to develop our energy sector.”
Bangladesh can also focus on Manitoba for small hydro projects as this Canadian province has the state-of-the-art technology, he said.
Rahman said the south Asian country of cheap labour can also attract huge Canadian investment for rough diamond cutting and polishing.
“We can establish businesses partnering with the northwest territories of Canada for cutting and polishing of rough diamonds.”
“It is an employment intensive sector. India now holds around 80 percent of the diamond cutting and polishing business in the world,” he said.
So, the country should take initiatives to convince Canadian investors to set up diamond cutting and polishing factories in Bangladesh and reap attractive cost advantage, he said.
“Most minerals and metals produced in Yukon are gold. We can explore the possibilities of working with the gold of Yukon.”
In 2007, Bangladesh's exports to Canada were $506 million, which rose to $611 million in 2008, $706 million in 2009, $813 million in 2010 and $1.078 billion in 2011.
Canada's exports to Bangladesh also increased from $275 million in 2008 to $555 million in 2011.
Bangladesh is currently the largest Canadian agri-commodity buyer in South Asia. The main Canadian exports to Bangladesh include cereals, legumes, oilseeds, iron and steel.
Canada's primary imports from Bangladesh include knit apparel, woven apparel, textile article, headgear and seafood.
Bangladesh imported wheat worth $300 million in 2011 while the amount was zero before 2004.
The bilateral trade between the two was estimated at $624 million even in 2006. But the growth marked a turning point in 2008 when local exporters launched a drive to grab more share of the Canadian market riding on duty- and quota-free benefits.
Previously, the trade volume was low as many of the Bangladeshi businessmen did not know about the market, Rahman said.
Now, many Bangladeshi businessmen are going to Canada to explore the market, he said.
Bangladesh enjoys duty- and quota-free benefits in Canadian market since 2003, he said, adding that more than $300 million Canadian investments have been so far made in Bangladesh.
“Now, our target is to diversify Bangladesh's exports as currently 95 percent products exported to Canada are garment items.”
There is an ample opportunity to export pharmaceuticals, software and IT services, plastic products, footwear and leather goods, ceramics, furniture and bicycles to Canada, he said.
“We should not depend only on garments. We have the opportunity to export other products also,” he said.
Like other western countries, Canada is also shifting its focus to other destinations as its longtime trade partner China has become expensive for Canadian consumers.
Moreover, China now opts for high-end technological gadgets, rather than garments, he said. As a result, Bangladeshi businessmen can now easily grab a little more of the Canadian market, Rahman said.
The chamber leader also urged the government to appoint an honorary consul general in Saskatchewan province.
"This province is important for Bangladesh as we import many agricultural commodities from Saskatchewan." Recently Bangladesh started importing fertiliser from Saskatchewan, he said.
“So, we should seek their direct assistance to explore this sector further,” he said.
Rahman said CanCham plans to open a Diaspora Cell in CanCham Bangladesh to help the investors start SME business, set up company and invest in Bangladesh by providing assistance in legal and regulatory matters.
Moreover, Bangladesh-Canada bilateral relationship marks its 40th anniversary this year.
The outgoing president said the recent closure of the Canadian visitor visa processing office in Dhaka left a negative impact on the trade relation between the two countries.
Rahman urged the Canadian government to re-open the visa office as it will help business grow further between the two friendly nations.