Sanctions on rab members: Economic ties with US won’t be affected
Bangladesh's relations with the US are expected to be strained over a lack of political reform but economic ties will likely be unaffected, a global provider of credit intelligence said in a policy brief.
The US will also be aware of China's growing influence in Bangladesh, as a leading investor and growing trade partner (China accounts for 24.2 percent of Bangladesh's imports), said London-based Fitch Solutions in its Country Risk & Industry Research analysis on Bangladesh published on Friday.
As such, maintaining ties with Bangladesh will play a role in the US' efforts to contain China's regional power, it said.
"Under the Biden administration, the US has taken a more forthright approach to sanctioning the erosion of democracy freedoms compared to the previous Trump administration. As we expect little progress in political reforms in Bangladesh, the country's ties to the US will remain strained," the thin tank said.
"However, we do not expect a significant deterioration in relations. The narrow scope of US sanctions suggests the US did not want to sever ties with the Bangladesh government, with which it has cooperated on military and counter-terrorism issues."
The US on December 10 announced sanctions on Rapid Action Battalion (RAB) and seven of its current and former members, including the Inspector General of Bangladesh Police Force Benazir Ahmed, in relation to widespread accusations of human rights abuses by RAB since its formation in 2004.
It came following the US-led Summit For Democracy on December 9 to 10, and Bangladesh had been omitted from the invite list.
Bangladesh protested the US sanctions, denying the allegations and stating that human rights organisations were exaggerating claims against RAB. Late December, Foreign Minister AK Abdul Momen, however, wrote to US Secretary of State Antony Blinken, requesting to reconsider the sanction.
However, Fitch Solutions does not expect a dramatic shift in relations.
Fitch Solutions believes the US will be reluctant to impose wider sanctions given that Bangladesh is sheltering one million Rohingyas from Myanmar and that the economic ties will be maintained, with Bangladesh keen to maintain its access to the US market and other major garment producers in the region.
Bangladesh exports a number of products, mostly garments, to the US worth about $6 billion a year.
The US also represents the third largest external creditor to Bangladesh after Hong Kong and mainland China. The importance of the US as a market for Bangladeshi goods and as a creditor will mean that the Bangladesh government will look to ensure relations with the US do not deteriorate, Fitch Solutions said.
The US also has limited alternatives in Asia for garment production given the ongoing conflict in Myanmar and lack of democratic freedoms in Cambodia and Vietnam, which are alternate producers of garments, as well as the ongoing trade tensions with China.
"The sanctions do nevertheless highlight Bangladesh's vulnerability to US sanction pressure and so, we do think that Bangladeshi authorities will continue to look to leverage off the competing regional aims of India and China to help diversify its exports over the longer term," observed the think tank.
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