Prepare now for post-LDC challenges

The government of Bangladesh needs to increase the productivity of its manufacturing sector to make use of potential opportunities after graduating from a least developed country (LDC), according to Park Young-sik, the ambassador of South Korea to Bangladesh.

"Bangladesh is marching towards LDC graduation in 2026 and this journey offers great opportunities. However, overcoming challenges that may come with the transition requires a lot of hard work from the country's public and private sectors," he said.

For example, increased exposure to global competition without thorough preparations could bring down the existing domestic industries, Park added.

He made these comments at a seminar, styled "Korean Investors CSRs Activities and Investment Outlooks", at the InterContinental Dhaka yesterday.

The South Korean embassy in the capital's Gulshan organised the event in celebration of the 50th anniversary of establishing diplomatic relations between the two countries.

Park said Bangladesh needs to consolidate and diversity its export base. This is because at present, more than 85 percent of the country's exports are cotton-based garments while shipments of synthetic apparel items is less than 15 percent.

"But the global market is exactly opposite. Increasing exports of synthetic garments requires huge capital and advanced technology. Here, there is room for garment companies of both countries to cooperate," he added.

Park also said Bangladesh has immense potential for infrastructure development and he hopes that ongoing projects in country will make significant contributions to this end.

"We aspire to become a vital partner in Bangladesh's infrastructure journey, as we have done in the garment sector," he added.

Park pointed out that while South Korean brands like Samsung and Hyundai have started assembling their products in Bangladesh, they are struggling in face of high customs duties on raw materials and intermediate goods.

Besides, the rampant smuggling of mobile phones and deluge of second-hand cars in the market are also impeding the commercial activities of these companies.

Lokman Hossain Miah, executive chairman of the Bangladesh Investment Development Authority (BIDA), said South Korea is the 4th largest foreign investor in Bangladesh with a portfolio of $1.45 billion.

"Our bilateral trade crossed $3 billion in 2022, up 39 percent from previous year," he added.

South Korea is also increasing its development fund to Bangladesh, which now stands at $3 billion.

"This is very positive for local infrastructure development," Lokman said while informing that more than 200 South Korean companies are operating in the country.

"Korean investment, technology and knowledge has supported many of our sectors, including garments, infrastructure, electronics and electrical engineering," he added.

Jashim Uddin Khan, director of BIDA, Sam Sik Kim, country director of the Korea Trade Investment Promotion Agency, and Shahamin Zaman, chief executive officer of the CSR Centre in Bangladesh, also spoke.