CHINESE PROPOSAL TO BANGLADESH FOR SISTER-CITY ALLIANCE

Perception of China being non-interfering in the country’s domestic affairs have favoured shaping of public support to the relationship.

The Communist Party of China (CPC) has offered to help Bangladesh in tackling the Covid-19 pandemic if the country agrees to form sister-city alliances with select Chinese cities. CPC made the proposal during a meeting with Bangladesh’s ruling party Awami League in May this year. The CPC proposed to form sister-city alliances with six Bangladeshi cities including Dhaka North, one of the two city corporations of the capital. The Chinese proposal, considered a friendly gesture, is widely appreciated in Bangladesh. Nevertheless, the Chinese offer of sister-city alliances in the time of Covid-19 attracted international attention leading to concerns about China’s intention behind the proposal made.

The Covid-19 infection is increasing steadily in Bangladesh and nearly 74,865 people are infected with 1,012 having died from the disease at the time of writing. Some unofficial estimate suggests the number of infections might be much higher. The Covid-19 is not only challenging the existing healthcare facilities in the impoverished nation but also have impacted the economy of the country. Like the trend globally, Bangladesh’s economic growth is likely to falter due to outbreak of Covid-19 pandemic. Bangladesh is desperately seeking support of the international community to tackle the challenges because of the spread of the pandemic and the international communities have been offering support to. Neighbouring India has offered medical relief assistance to the country as part of its Covid-19 assistance support to SAARC countries. China offered to provide technical and financial support to Bangladesh to curb the Covid-19 disease, dengue and similar pandemics if Bangladesh agreed on its proposal. China also suggested helping the Bangladesh cities develop like the cities in China once the country accepted its proposal.

China offered to provide technical and financial support to Bangladesh to curb the Covid-19 disease, dengue and similar pandemics if Bangladesh agreed on its proposal.

Sister-cities are formed with the signing of agreements between cities of two countries to promote the cultural and commercial relationship. US President D. Eisenhower is claimed to be the first to introduce the concept of sister-city. The core motivation behind the sister-city is to promote people-people to connectivity or ‘citizen diplomacy’ between the two countries. Traditionally, sister-cities are considered to have been helpful in developing understanding and a sense of bonding among the people of the two cities who ally.

China gives prominence to the diplomacy of sister-cities and it has gradually become integral to China’s foreign policy. Chinese cities have sister-city tie-ups with cities across the globe. Amongst the Chinese cities, Shanghai and Beijing have the highest number of sister-city arrangements. Developing cultural linkages at the local level has been an important motivation of China behind promoting the sister-city alliances. China encourages interaction among the people of the sister-cities and offers various educational exchanges, art and linguistic residences and cultural programme.

Developing cultural linkages at the local level has been an important motivation of China behind promoting the sister-city alliances.

Recently, apprehensions are expressed about Chinese intention for pursuing countries to enter sister-city alliances. The Chinese motivation exceeds the promotion of cultural ties and it has a larger geostrategic objective. In 2019, China Daily reported about Li Xiaolin, president of Chinese People Association for Friendship with Foreign Countries mentioning that “sister-city relations play an important role in boosting cooperation and exchanges among Chinese and foreign cities under the framework of the BRI.” This statement coming from the head of the nodal organisation managing the country’s ‘sister-city’ relationship sent out some whispers about the motives. BRI is the abbreviation of the Belt Road Initiative, which is China’s flagship foreign policy initiative under which large infrastructure projects are developed in the countries across the globe and have geostrategic underpinning. China is emphasising on developing sister-cities in the countries that joined BRI and is estimated to have already established sister-city relations with around 700 cities in the countries joining BRI.

Linking BRI to the sister-city arrangement raised suspicions about Chinese intentions, primarily at the time when the global geostrategic order is facing strains because of its rising competition with powers like the United States of America. Countries in Europe are expressing reservations over the Chinese sister- city initiative because of its explicit connection with the BRI. Many European cities that have had sister-city arrangements with China are showing reluctance in pursuing such ties. The Swedish cities of Linköping, Lulea, and Vasteras have ended official cooperation deals with Guangzhou, Xi’an, and Jinan.

China has offered to invest around $24 billions in Bangladesh, which is one of the highest assistance promised to a country under BRI. A large portion of the committed assistance will be in the form of credit.

In 2016, Bangladesh joined the BRI and has remained least bothered about the apprehensions regarding the initiative globally. BRI is criticised, basically for the debt burden and the exploitation by China that a country faces if they fail to repay the debt. The case of Sri Lanka, another South Asian country, which had to give a portion of its land on lease to China after failing to repay the loan is well known. Bangladesh is confident that a similar situation will not occur in its case and will be able to negotiate better terms with China. In May this year, Prime Minister Sheikh Hasina during her telephonic discussion with Chinese President Xi Jinping reiterated the commitment of her country’s cooperation to BRI.

Bangladesh is an important partner of China in South Asia. China has offered to invest around $24 billions in Bangladesh, which is one of the highest assistance promised to a country under BRI. A large portion of the committed assistance will be in the form of credit. With the unfolding of BRI, Chinese engagement in Bangladesh will increase and this is driving the Chinese desire and necessity to expand understanding of the communities locally there. The sister- city arrangement allows China to penetrate deep inside Bangladesh’s society locally.

Despite the presence of trade imbalance with China, the issue is hardly highlighted and recognised as a problem in the bilateral relations.

Notably, Bangladesh and China today enjoy a warm and friendly relationship and have formed a strategic partnership. The two countries share a close military and economic relationship. China is Bangladesh’s biggest trading partner with the trade favouring China. However, the difference in culture between the two countries is considered a lacuna in this relationship. For bridging this gap, China is persistently enhancing its public diplomacy to foster people-to-people connectivity through measures like — encouraging educational and cultural exchanges, organising visits of media and political parties’ delegations, establishing Chinese language institutes, organising interaction among the trade bodies, think tanks and many other activities.

China’s public outreach has paid a dividend in forming a favourable public opinion in support of the relationship. In Bangladesh, rarely any negative sentiment about China is voiced in public. Despite the presence of trade imbalance with China, the issue is hardly highlighted and recognised as a problem in the bilateral relations. Also, media and civil societies barely express resentment against China for not adequately pressurising Myanmar for the repatriation of Rohingya refugees. Interestingly, media and people in Bangladesh are however vociferous in expressing disappointment about India for not doing enough in resolving the Rohingya crisis. Again, the trade imbalance with India is repeatedly highlighted as a major irritant and there is limited acknowledgement of Indian efforts in addressing Bangladesh’s concerns. For instance, India provided duty free access to Bangladesh products (except few narcotic substances) in order to adjust the trade gap. Following this measure Bangladeshi export to India witnessed a significant surge. In 2019, Bangladesh’s export to India touched US$1 billion. It’s mentionable that any small gesture by China is highlighted widely in Bangladesh media.

Rising influence will make China assertive and will be dictating terms of policies in the country including in internal affairs.

Perception of China being non-interfering in the country’s domestic affairs have favoured shaping of public support to the relationship. In a transformational world, global geopolitics becoming confrontational Chinese behaviour is expected to change. Rising influence will make China assertive and will be dictating terms of policies in the country including in internal affairs.

Considering the asymmetries existing between the two countries, Bangladesh needs to holistically analyse the ramifications of the Chinese proposals. The principle of equidistance, which has been the guiding principle of Bangladesh’s foreign policy will be hampered and will impact its relationship with other powers. Maintaining autonomy of the foreign policy will be crucial for sustaining peace and stability of the country and South Asia.

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JUNE 12, 2020

Posted in ACHIEVEMENTS - SUCCESS, CHALLENGES, CURRENT ISSUES, ECONOMY, FOREIGN RELATIONS & POLICY, Friends & Foes - World Reaction, GLOBAL INDICATORS & BENCHMARK, GROWTH & TARGET, INDUSTRIES, INTERNATIONAL - PERCEPTION ON BANGLADESH, REGIONAL COOPERATION, Regional Policy, SOCIETY, SOCIO-ECONOMY -- Inequality, SOCIO-ECONOMY -- Inequality, Poverty, Distribution & Poverty, STRATEGY & POLICY, TRADE BODIES, WORLD - GEOPOLITICS | Leave a comment

BANGLADESH TO GAIN MORE TRADE BENEFITS FROM CHINA AS AN LDC

BANGLADESH TO GAIN MORE TRADE BENEFITS FROM CHINA AS AN LDC

Not interested to sign FTA now

Bangladesh wants to secure more trade benefits from China as a least developed country (LDC) instead of signing a free trade agreement with the Asian economic giant, according to commerce ministry officials.

“We don’t want to sign an FTA with China because the country is the largest trading partner of Bangladesh. If we sign the FTA, we will lose a lot of revenue each year,” said Sharifa Khan, additional secretary (FTA) of the commerce ministry.

The commerce ministry has already accepted China’s offer for the duty-free import of 97 per cent of all Bangladeshi products under the LDC category, effectively rejecting the benefits the country would have received under the Asia-Pacific Trade Agreement (APTA).

Bangladesh and China are both APTA member nations.

In 2015, China, Bangladesh’s largest bilateral trade partner, offered various LDCs extensions on the trade benefits for up to 97 per cent of their goods. However, nations that took up the offer were no longer allowed to enjoy the benefits under the APTA.

Since Bangladesh was late in its response, China will now send a fresh offer for 95 per cent of the country’s goods.

China was supposed to issue a letter to Bangladesh in this regard in January.”But unfortunately, the letter is yet to be received by the commerce ministry due to the coronavirus outbreak,” Khan told The Daily Star over phone.

Incoming goods from China amount to more than $14 billion and earn Bangladesh Tk 23,000 crore as import duty each year.

The import duty levied on the Chinese products accounts for 30 per cent of the total revenue collected from import duties annually.

“So, we are not interested to sign the FTA with China even though the Chinese government does want to,” the additional secretary said.

However, Bangladesh is close to signing an FTA with Indonesia and the deal could be finalised this year if normalcy is restored after quelling the coronavirus outbreak.

“Once we graduate to a developing country in 2024 and come out of the LDC bracket, we will again enter the APTA to enjoy trade benefits from China,” Khan added.

China is a vital trade partner of Bangladesh for various reasons. For instance, the country’s garment industry is heavily reliant on Chinese fabrics although local manufacturers can supply nearly 80 per cent of the yarn required by the knitwear sector.

Bangladesh’s woven garment makers import nearly 60 per cent of all the fabrics they require directly from China as local weavers cannot supply adequate raw materials.

In total, apparel makers in the country source 46 per cent of their raw materials from China.

Bangladesh is also dependant on Chinese dyes, chemicals and capital machinery.

The bilateral relations between the two nations go deeper though as China is now a major export destination in the Asian region for Bangladesh.

China is one of the biggest consumers of apparel products in the world. The domestic market for garments in China is worth $350 billion as the middle income bracket is expanding, according to estimates from the International Textile Manufacturers Association.

Apparel exports from Bangladesh to China are increasing with time as a section of consumers in the middle income bracket cannot afford the high-end garment items made in China.

This is why they depend on cheaper Bangladeshi products, industry insiders said.

The cost of apparel production in China has gone through the roof due to a shortage of skilled workforce. This is because the workers prefer jobs in more sophisticated technological industries rather than the garment sector.

The export of various merchandise, especially apparel products, from Bangladesh to China has grown rapidly in recent years following increased demand while preferential trade benefits are given to local exporters.

In fiscal 2018-19, Bangladesh’s total exports to China amounted to $831.20 million while it was $694.97 million just the previous year, according to the Export Promotion Bureau.

In the February-July period of the current fiscal year, Bangladesh earned $470.20 million through exports to China. Of that total, garment exports accounted for 80 per cent.

“Bangladesh should enjoy the duty-free benefits for 97 per cent of its goods and reject the APTA for the greater interest of the country,” said Abdur Razzaque, research director of the Policy Research Institute.

Currently, there are about 65 Bangladeshi goods that are allowed duty-free access to the Chinese market under the APTA while more than 5,000 goods enjoy the same benefit under the LDC coverage.

“That’s why Bangladesh needs to accept the 97 per cent package,” Razzaque told The Daily Star.

It is believed that China would be Bangladesh’s third Asian export destination after Japan and India, where the country would be able to send more than $1 billion worth of goods.

Currently, Vietnam and Cambodia are enjoying increased exports to China since they have preferential trade agreements with the world’s most populous nation.

“If Bangladesh is granted the 97 per cent package, exports to China will increase manifold,” Razzaque said.

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MARCH 18, 2020

Posted in ACHIEVEMENTS - SUCCESS, CURRENT ISSUES, ECONOMY, FOREIGN RELATIONS & POLICY, GLOBAL INDICATORS & BENCHMARK, GROWTH & TARGET, INDUSTRIES, REGIONAL COOPERATION, Regional Policy, STRATEGY & POLICY, TRADE BODIES | Leave a comment

97% BANGLADESHI PRODUCTS GET DUTY FREE ACCESS IN CHINA

97% BANGLADESHI PRODUCTS GET DUTY FREE ACCESS IN CHINA

As many as 97% Bangladeshi products, in a products list basket, will enjoy duty free access in the Chinese market effective from July 1, according to Bangladesh officials.

The opportunity of zero duty in the pandemic is expected to bring new opportunity for Bangladeshi exporters and businesses, said top officials in Bangladesh.

The development came following a formal approach of the Bangladeshi Foreign Ministry which has finally been approved by the State Council of the Chinese Finance Ministry, said a press statement by Bangladesh’s Foreign Ministry on Friday.

Bangladesh’s highest import is being done from China whereas Bangladesh is still lagging behind manifolds in terms of exporting goods to China, according to the available data.

According to the Federation of Bangladesh Chambers of Commerce and Industries, the trade volume between China and Bangladesh was around $14.68 billion in 2018-19 fiscal year.

And, of the total trade count, there was import trade of $13.86 billion and export of $831 million.

“We still import more than export from China, it will create more possibilities to minimize the trade deficit,” Md. Obaidul Azam, an additional secretary at the Bangladeshi Commerce Ministry told Anadolu Agency.

Also, capacity enlarging of Bangladeshi exporters and businesses are important in this regard, Azam added.

And, this will help the country as its economy has already been hit by the pandemic. Bangladesh on Friday reported 45 new deaths and 3,243 fresh cases, surging the total confirmed cases to 105,535 and fatalities to 1,388.

Bangladesh will get the zero treatment as a Least Developed Country, and 8,256 Bangladeshi products will come under treatment as some 3,095 products are already enjoying duty free access under the Asia-Pacific Trade Agreement, it added.

“Business will certainly see a big jump with the latest 97% duty free access to these products,” Borhan Uddin, the director-general for East Asia and Asia-Pacific in the Bangladeshi Foreign Ministry, told Anadolu Agency.

Uddin added: “Defiantly, it’s a good sign in pandemic. And we for a long time were examining the access and working with the country, and will work to nourish the bilateral relationship.”

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JUNE 19, 2020

Posted in CHALLENGES, CURRENT ISSUES, ECONOMY, FOREIGN RELATIONS & POLICY, GROWTH & TARGET, INDUSTRIES | Leave a comment

NEW EXPORT POTENTIAL UNLOCKED IN CHINESE MARKET

NEW EXPORT POTENTIAL UNLOCKED IN CHINESE MARKET

Starting from July 1, some 8,256 Bangladeshi products will get zero tariff facility in the Chinese market

The world economy is battered by the coronavirus pandemic and the global trade is almost in a standstill for the last five months. Factories are being closed down in the country due to cancellation in buying orders in the garment sector.

Amid such a grim economic situation, Bangladesh’s large trading partner China has offered a breath of relief.

The country has offered zero tariff facility to 97% of items imported from Bangladesh.

The new announcement will come into effect on July 1 this year. From that day, 8,256 Bangladeshi products will get zero tariff facility in the Chinese market.

Bangladeshi manufacturers will be able to avail this duty-free and quota-free facility after 40% value addition to these products.

After the decision was approved by the Chinese government on June 16 (Tuesday), the country notified the Bangladesh government about it on Friday through the Bangladesh High Commission in China.

Stakeholders concerned believe this opportunity is expected to give a boost to Bangladesh’s exports to the Chinese market and attract foreign investment into Bangladesh.

There is a strong prospect of expanding markets of Bangladeshi pharmaceutical products, readymade garments, frozen food, fish and vegetables in China.

The Bangladesh government hopes the new facility will help to reduce the expanding trade gap between Bangladesh and China.

Mamun Rashid, joint-secretary to Bangladesh China Chamber of Commerce and Industry, told The Business Standard there is a huge demand for Bangladeshi traditional products as well as pharmaceutical items in China that has a population of around 140 crore.

“Bangladesh could not use that potential for not having duty-free access to the Chinese market,” he said, adding, “it has opened up a new opportunity for Bangladesh.”

According to sources at the Ministry of Commerce, Bangladesh has been enjoying zero tariff facility on 60 percent of export items to China since July 1, 2010 under Asia Pacific Trade Agreement (APTA) for LDCs.

However, Bangladesh was not able to benefit much from the opportunity as the facility was on less important export items other than the principal exportable items of Bangladesh . The latest facility would ensure unimpeded access of Bangladeshi products to the Chinese market.

Hafizur Rahman, joint-secretary to the commerce ministry and chief of the WTO Cell, told The Business Standard, “There are many products in Bangladesh which are good in quality but much cheaper when compared to those of China. Those products can find a place in the Chinese market.”

Pointing out that China is ready to shift a large number of mills and factories to other countries owing to tough compliance requirements and high costs of production, he  said Bangladesh could become a potential investment destination for China.

The broader access of Bangladeshi products to the Chinese market will help reduce the expanding trade gap between the two countries and also will help to create employment in the country by attracting more foreign investment, he hoped.

China has been enjoying an upper hand in bilateral trade. In the last fiscal year, China exported $12 billion worth of goods to Bangladesh, while Bangladesh’s exports to the country stood at a paltry $831 million.

Businesses claim that even though labour in Bangladesh is cheaper than in China and that Bangladeshi products have huge demand in Chinese market, Bangladesh is not being able to increase exports to China due to tariffs.

Bangladesh Tanners’ Association President Shahin Ahmed said Bangladesh could previously export over 3,000 products to China without facing tariff barriers by adding 35 percent value to those. However, since the more prominent export items were out of the list of products under the facility, Bangladesh could not get the facility on most of the potential export items.

At present China buys 50 percent of Bangladesh’s tannery products, he said, adding that the sector will benefit from the newly announced facility.

Bangladesh Association of Pharmaceutical Industries Secretary Shafiuzzaman said, “Although Bangladesh’s pharmaceutical industry relies on raw materials from China, we can supply cheaper drugs to China.”

Pharmaceutical companies in Bangladesh can still make profit by exporting drugs of similar standard at 20-25% cheaper rates than those offered by Chinese manufacturers, he said, adding that the new tariff-free facility will help to expand the market for Bangladeshi drugs in China.

Commenting on this, Bangladesh Garment Manufacturers and Owners Association President Rubana Huq told The Business Standard, “China used to provide us duty free access for 60% items of all the tariff lines under its LDC scheme through WTO notification, and I think this has been extended to 98% since the formalities were going on for quite some time.”

“For most of the items we used to enjoy duty-free and quota-free access to China under the prevailing facility, if there were few items left it will now be included,” she added.

There are certain issues regarding duty free access to China, she continued, “There are two schemes through which we can get duty free, one is LDC scheme through WTO, and the other is APTA.

“Though apparently the duty-free and quota-free facility is more beneficial for us at this moment than APTA with respect to product coverage and tariff cut, but when we will lose LDC status we will have to go for APTA.”

However, Joint Secretary Hafizur Rahman of the commerce ministry said the new facility will not be affected by Bangladesh’s graduation from the LDC status. “The APTA facility has just been put on hold because of this new facility. We will get it back after graduation from the LDC status.”

China or Bangladesh: Who to benefit from the move?

The commerce ministry said all potential Bangladeshi export products will get duty-free and quota-free access to China from July 1 this year, but Bangladesh will not have to offer any facility to China for this.

Commerce Secretary Jafar Uddin said China has offered this facility unilaterally to the LDCs at the behest of the World Trade Organisation so Bangladesh will get this facility unconditionally.

Forty-one LDCs including Vietnam, Cambodia, Laos, and the Philippines have been enjoying zero tariff treatment on their export items to China.

However, Khondaker Golam Moazzem, senior research director of the Centre for Policy Dialogue, said although China has granted this facility to Bangladesh unconditionally, it will be benefited from this indirectly.

He said, “Due to its industrial policy, China is gradually moving away from lighter industries. The country is producing expensive products instead of cheaper ones.

“China will get an opportunity to shift these factories to other countries and then import those products under the zero tariff facility.”

Besides, investing in Bangladesh is profitable for Chinese investors as labour has become costlier in China.

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JUNE 20, 2020

Posted in CHALLENGES, CURRENT ISSUES, ECONOMY, FOREIGN RELATIONS & POLICY, GLOBAL INDICATORS & BENCHMARK, GROWTH & TARGET, INDUSTRIES, REGIONAL COOPERATION, Regional Policy, STRATEGY & POLICY, TRADE BODIES | Leave a comment

CHINA GRANTS ZERO TARIFF BENEFITS TO 5,161 MORE BANGLADESHI PRODUCTS

CHINA GRANTS ZERO TARIFF BENEFITS TO 5,161 MORE BANGLADESHI PRODUCTS

China has granted zero tariff treatment for 5,161 more Bangladeshi products in the Chinese market effective from July 1.

With the announcement made by the State Council of Ministry of Finance of China, a total of 8,256 Bangladeshi products will come under the 97 per cent of products that would be exempted from tariff.

Bangladesh described it as a success of its economic diplomacy, according to a UNB report.

“We are glad to inform that as part of our economic diplomacy and the consequent outcome of exchange of letters between Bangladesh and China, Tariff Commission of the State Council of Ministry of Finance of the People’s Republic of China issued a notice on granting zero treatment to 97 percent of tariff products of Bangladesh,” said an official at the Ministry of Foreign Affairs.

He said Bangladesh is getting this as an LDC.

This treatment is in addition to the preferential duties that we are already enjoying from China under Asia – Pacific Trade Agreement (APTA).

This announcement opens doors for Bangladeshi exporters to enjoy zero tariff for 5,161 items to enter into Chinese markets from July 1.

“According to China’s commitment to zero tariff treatment for 97% of the tax products of the least developed countries that have established diplomatic relations with China,” said a notification issued on June 16 from the Ministry of Finance of China.

According to the exchange of letters between China and Bangladesh, since July 1, 2020, for 97 per cent of the tax products originating in Bangladesh, the preferential tax rate of zero shall be applied, it reads.

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JUNE 27, 2020

Posted in CHALLENGES, CURRENT ISSUES, ECONOMY, FOREIGN RELATIONS & POLICY, GLOBAL INDICATORS & BENCHMARK, GROWTH & TARGET, INDUSTRIES, STRATEGY & POLICY, TRADE BODIES | Leave a comment

97% BANGLADESHI PRODUCTS TO GET DUTY-FREE ACCESS TO CHINA

97% BANGLADESHI PRODUCTS TO GET DUTY-FREE ACCESS TO CHINA

5,161 more Bangladeshi products to enjoy zero tariff to Chinese markets from July 1

Chinese government has granted duty-free access to 97% Bangladeshi products to its market from July 1 while Dhaka termed it as a success of Bangladesh’s economic diplomacy.

As part of the government’s economic diplomacy and the outcome of exchange of letters between Bangladesh and China, Tariff Commission of the Chinese State Council issued a notice recently on granting zero treatment to 97% of tariff products of Bangladesh, a foreign ministry press release said on Friday.

Bangladesh has been granted the facility as a Least Developed Country (LDC) that includes 5,161 more Bangladeshi products to enjoy zero tariff treatment in the Chinese market, reports BSS.

Currently, 3095 Bangladeshi products enjoy duty-free access to Chinese market under Asia – Pacific Trade Agreement (APTA).

With the new announcement, 97% of Bangladeshi products will join this zero-tariff club from July 1 that raised the numbers of Bangladeshi products with zero duty access to Chinese market to 8256.

During the Asian-African Conference which took place this week in Indonesia, Chinese president Xi Jinping announced that China will grant duty free market access for LDCs 97% of the tariff lines within the year.

This beneficial market access scheme will be applied only for imports from LDCs that have diplomatic relations with China.

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JUNE 19, 2020

Posted in ACHIEVEMENTS - SUCCESS, CHALLENGES, CURRENT ISSUES, ECONOMY, FOREIGN RELATIONS & POLICY, GLOBAL INDICATORS & BENCHMARK, GLOBALIZATION, GROWTH & TARGET, INDUSTRIES, SOCIO-ECONOMY -- Inequality, STRATEGY & POLICY, TRADE BODIES, WORLD - GEOPOLITICS | Leave a comment

CHINA SLASHING TARIFF OPENS NEW OPPORTUNITIES FOR BANGLADESH

CHINA SLASHING TARIFF OPENS NEW OPPORTUNITIES FOR BANGLADESH

Industry sees new growth opportunity after China cuts tariff on imports from Bangladesh

Thanks to the ‘Made in China 2025’ strategy, Beijing’s been pursuing a transformation blueprint to move up the value chain for some time now, leaving in its wake, huge business opportunities in RMG and textiles! Adding to which is the spiralling production cost and labour wages in China, which have paved way for countries like Bangladesh to take advantage of.

Banking on its massive human resource and cheap labour, Bangladesh’s prospects are not restricted to the global arena only, where it can effectively fill in the business vacuum left by China. Even the Chinese domestic market is equally promising! As per a Euromonitor forecast, China is expected to overtake United States to become the largest apparel market by 2019 globally (by then, the annual apparel sales in China is pegged to touch US $ 3,33,312 million).

Bangladesh’s Prime Minister Sheikh Hasina and China’s Premier Li Keqiang talk during a signing ceremony at the Great Hall of the People in Beijing, China July 4, 2019. Mark Schiefelbein/Pool via REUTERS

Keeping pace with this, Bangladesh has been making steady inroads into China. In 2016-17, the country’s apparel export to China witnessed a significant rise of around 14.77 per cent Y-o-Y to reach around US $ 400 million. However, during the period of July-March 2018, earnings slipped marginally by 5.65 per cent to touch US $ 269 million, compared to what was US $ 285 million in the corresponding period of previous year.

So just when the industry was busy figuring out on what went wrong, came in the big news – China cuts tariffs on imports from Bangladesh. The provision, which has come into effect from July 1 2018, could not have come at a better time for Bangladesh.

Though the Chinese cabinet’s decision is primarily to remove tariffs on soybean from five countries- Bangladesh, South Korea, India, Laos and Sri Lanka, the tariff cut is also applicable for agricultural products, medical supplies, clothing, etc. Even Soybean meal will be exempted from the tariffs.

“Apart from South America, I consider China as the second-most potential market from Bangladesh’s perspective. We stand very good chances to benefit from the Chinese market if we can grab the opportunities that are around,” maintains Rafiqul Haq Parosh, Managing Director of Versatile Apparel Pvt. Ltd.

ForMd. Aminul Islam, CEO of City Apparel Tex and Secretary General of the Bangladesh Garment Buying House Association (BGBA), China’s role is very pivotal from Bangladesh’s perspective. Speaking to Apparel Resources, he avers, “I am very upbeat about the Chinese domestic market, which would be around US $ 150 billion in size. If we can capture China, our dependence on other markets can be balanced out accordingly.”

With Bangladesh’s exports to once its biggest market, USA, bordering on the erratic lately, and the long-term repercussions of Brexit on the UK and European Union markets open to conjectures still, Aminul’s views on China playing the balancing act, seem pertinent.

China slashing tariffs on imports from the five Asian countries is seen by experts as a move to strengthen its defences in the ongoing ‘trade war’ with the United States. But there is no denying that Beijing’s move has opened up a new window of opportunity for Bangladesh.

“My target now is to get some Chinese buyers as Chinese domestic market is very promising and they have already started importing from Bangladesh,” quips Md. Moqbul Hossen, Managing Director of Macro Style, underlining his future plans where China figures prominently in the scheme of things.

Even the President of the country’s apex exporters’ body, BGMEA, seems equally optimistic about China. “Exploring new markets has become very critical for growth; there is a big market each in Russia and China…We know China has a very big domestic market. Despite their significant global presence, we can find some space there for us,” Siddiqur Rahman had briefed to Apparel Resources earlier.

Now that China has set the ball rolling, hope the Bangladeshi exporters are gearing up to lap up this big opportunity!

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JULY 03, 2018

Posted in CURRENT ISSUES, FOREIGN RELATIONS & POLICY, STRATEGY & POLICY, TRADE BODIES | Leave a comment

WILL WRITE NEW CHAPTER OF DHAKA-BEIJING BILATERAL COOPERATION: AMBASSADOR LI JIMING

WILL WRITE NEW CHAPTER OF DHAKA-BEIJING BILATERAL COOPERATION: AMBASSADOR LI JIMING 

 new chapter of Dhaka-Beijing ,  Dhaka-Beijing bilateral cooperation ,  Ambassador Li Jiming  ,  coronavirus ,  45th anniversary of the establishment of diplomatic relations ,  Bangladesh and China ,  Chinese Ambassador to Bangladesh

Chinese Ambassador to Bangladesh Li Jiming has said they will work hand in hand with the government of Bangladesh and wider sectors of society to contain the pandemic and overcome the temporary difficulties.
 
“We will jointly write a new chapter of bilateral cooperation,” the Ambassador told UNB looking ahead for a stronger ties between the two countries. 
 
This year marks the 45th anniversary of the establishment of diplomatic relations between Bangladesh and China. 
 
The Ambassador said a Chinese proverb goes, “Only friendships built on sincerity can last long.” 
 
Over the past 45 years, he said, the two countries have shown mutual respect, understanding, and support in their relationship. 
 
Ambassador Jiming said pragmatic cooperation in a wide range of fields has been greatly expanded and the economies of China and Bangladesh are closely linked and highly complementary to each other. 
 
“There are huge spaces for cooperation in public health, trade, investment, and engineering contracts between the two countries,” he said. 
 
The Ambassador thinks the cooperation between Bangladesh and China not only benefits the peoples of the two countries but also promote regional development and stability. 
 
“China will always be the most reliable partner of Bangladesh and a firm builder and implementer of major infrastructure projects for the Belt and Road connectivity,” he said. 
 
Solidarity and Cooperation 
 
The ambassador said the virus cannot defeat humanity and they will eventually prevail over the stealthy foe. “Solidarity and cooperation are the most powerful weapons for the mankind to defeat the virus.”
 
He said the COVID-19 pandemic is an unprecedented crisis facing the mankind, and thus every country shares the same destiny. 
 
“No country can guarantee its absolute security in public health alone until all countries are safe,” he said.

 
The international community, therefore, needs solidarity and cooperation more than ever, said Ambassador Jiming. 
 
He said China is ready to continue to work with the international community to support WHO’s leadership in the global response, promote solidarity and cooperation among the international community, safeguard the Earth, build a global community with a shared health for all, and win the battle against the virus at an early date.  
 
Commitments from Top
 
On the evening of 20th May, Chinese President Xi Jinping and Prime Minister Sheikh Hasina spoke on the phone. 
 
The Ambassador said the two leaders expressed appreciation for the mutual support between China and Bangladesh both before and during the COVID-19, reaffirmed our common commitment to a coordinated global response to the pandemic, and pledged to further our cooperation in addressing the situation and areas beyond. 
 
He said this conversation demonstrates the firm determination of the two countries to join hands to overcome the current difficulties. 
 
“And it is of high significance as it laid down the guidelines to advance our joint response in fighting the COVID-19 as well as strengthening our strategic partnership of cooperation in a post-COVID-19 era,” said Ambassador Jiming. 
 
During the conversation, the Ambassador said, President Xi reaffirmed China’s firm support to Bangladesh in fighting COVID-19 and its readiness to help where it can in light of the actual needs of Bangladesh, including sending a medical expert team to Bangladesh. 
 
The team is scheduled to arrive in Bangladesh on Monday, with hands-on experience and critical medical supplies for curbing the COVID-19 transmission and treating the patients. 
 
It is believed to be the first official foreign medical team in Bangladesh to assist in the fight against COVID-19, said the Chinese Ambassador. 
 
“This is also a vivid example of the fine tradition of mutual assistance between Bangladesh and China,” he said.  
 
President Xi also announced that China would provide US$2 billion over two years to help the COVID-19 response and economic and social development in  the affected countries, especially developing countries, and would contribute to ensuring the COVID-19 vaccine accessibility and affordability in developing countries as a global public good when vaccine development and deployment in China would be available. 
 
“I believe all these practical measures will benefit Bangladeshi people in the near future. As a responsible major country, China will continue to cooperate with its best ability with the international community to prevail over the global fight against the COVID-19,” said the Chinese Ambassador.  
 
Facing this unknown, unexpected, and devastating disease, the Ambassador said, China launched a resolute battle to prevent and control its spread. 
 
He said the government of China released a White Paper titled Fighting Covid-19: China in Action that details the endeavors of the Chinese people in fighting this tough battle. 
 
Making people’s lives and health its first priority, the Chinese envoy said, China adopted extensive, stringent, and thorough containment measures, and has for now succeeded in cutting all channels for the transmission of the virus. 1.4 billion Chinese people have exhibited enormous tenacity and solidarity in erecting a defensive rampart that demonstrates their power in the face of such natural disasters.

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JUNE 07, 2020

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CHINA WILL ALWAYS BE MOST RELIABLE PARTNER OF BANGLADESH: AMBASSADOR LI JIMING

CHINA WILL ALWAYS BE MOST RELIABLE PARTNER OF BANGLADESH: AMBASSADOR LI JIMING

Chinese ambassador to Bangladesh Li Jiming has said they will work hand in hand with the government of Bangladesh and wider sectors of society to contain the pandemic and overcome the temporary difficulties.

China will always be the most reliable partner of Bangladesh and a firm builder and implementer of major infrastructure projects for the Belt and Road connectivity.

Chinese ambassador to Bangladesh Li Jiming

“We will jointly write a new chapter of bilateral cooperation,” the ambassador told UNB looking ahead for a stronger ties between the two countries.

This year marks the 45th anniversary of the establishment of diplomatic relations between Bangladesh and China.

The ambassador said a Chinese proverb goes, “Only friendships built on sincerity can last long.”

Over the past 45 years, he said, the two countries have shown mutual respect, understanding, and support in their relationship.

Ambassador Jiming said pragmatic cooperation in a wide range of fields has been greatly expanded and the economies of China and Bangladesh are closely linked and highly complementary to each other.

“There are huge spaces for cooperation in public health, trade, investment, and engineering contracts between the two countries,” he said.

The ambassador thinks the cooperation between Bangladesh and China not only benefits the peoples of the two countries but also promote regional development and stability.

“China will always be the most reliable partner of Bangladesh and a firm builder and implementer of major infrastructure projects for the Belt and Road connectivity,” he said.

Solidarity and cooperation

The ambassador said the virus cannot defeat humanity and they will eventually prevail over the stealthy foe. “Solidarity and cooperation are the most powerful weapons for the mankind to defeat the virus.”

He said the COVID-19 pandemic is an unprecedented crisis facing the mankind, and thus every country shares the same destiny.

“No country can guarantee its absolute security in public health alone until all countries are safe,” he said.

The international community, therefore, needs solidarity and cooperation more than ever, said ambassador Jiming.

He said China is ready to continue to work with the international community to support WHO’s leadership in the global response, promote solidarity and cooperation among the international community, safeguard the Earth, build a global community with a shared health for all, and win the battle against the virus at an early date.

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JUNE 07, 2020

Posted in CURRENT ISSUES, ECONOMY, FOREIGN RELATIONS & POLICY, Friends & Foes - World Reaction, GLOBAL INDICATORS & BENCHMARK, GROWTH & TARGET, INDUSTRIES, INTERNATIONAL - PERCEPTION ON BANGLADESH, REFLECTION - Refreshing our Memories, SOCIETY, SOCIO-ECONOMY -- Inequality, STRATEGY & POLICY | Leave a comment

CHINA OFFERS HELP IN BANGLADESH’S FIGHT AGAINST CORONAVIRUS

CHINA OFFERS HELP IN BANGLADESH’S FIGHT AGAINST CORONAVIRUS

The government of China has decided to assist Bangladesh in fighting the outbreak of novel coronavirus in the country.

The Embassy of the People’s Republic of China in Bangladesh made the announcement today on their official Facebook page.

On March 17, the Chinese embassy informed relevant ministries of the Bangladesh government about the Chinese government’s decision to donate emergency anti-epidemic medical supplies, including a large number of test kits to Bangladesh, the post read.

In curbing the epidemic, China has always been and will be Bangladesh’s most reliable partner, it added.

So far, 14 people in Bangladesh have been diagnosed with Covid-19, and a 70 year old man who tested positive died today, according to the Institute of Epidemiology, Disease Control and Research (IEDCR).

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JUNE 29, 2020

Posted in CURRENT ISSUES, FOREIGN RELATIONS & POLICY, Friends & Foes - World Reaction, INTERNATIONAL - PERCEPTION ON BANGLADESH, SOCIETY, SOCIO-ECONOMY -- Inequality, Poverty, Distribution & Poverty | Leave a comment

BUILDING A CHINA-BANGLADESH COMMUNITY OF PUBLIC HEALTH THROUGH SOLIDARITY AND COOPERATION

BUILDING A CHINA-BANGLADESH COMMUNITY OF PUBLIC HEALTH THROUGH SOLIDARITY AND COOPERATION

Li Jiming, Ambassador of the People’s Republic of China to Bangladesh.

A friend in need is a friend indeed. At the early stage of this crisis, the people of every walk of life in Bangladesh extended their support in various forms at the critical moment of China’s fight against the COVID-19, which demonstrated the profound friendship of the Bangladeshi people toward the Chinese people. In February, Honorable Prime Minister Sheikh Hasina wrote a letter to President Xi Jinping in an expression of her generosity, sympathy and support to China, where she assured that the people and the government of Bangladesh are with the friendly people and the government of China to overcome the crisis. Such expressions of friendship will always be remembered and cherished by the Chinese side.

Facing this unknown, unexpected, and devastating disease, China launched a resolute battle to prevent and control its spread. The government of China released a White Paper titled Fighting Covid-19: China in Action that details the endeavors of the Chinese people in fighting this tough battle. Making people’s lives and health its first priority, China adopted extensive, stringent, and thorough containment measures, and has for now succeeded in cutting all channels for the transmission of the virus. 1.4 billion Chinese people have exhibited enormous tenacity and solidarity in erecting a defensive rampart that demonstrates their power in the face of such natural disasters.

However, as the pandemic continues ravaging the world, the situation in Bangladesh remains grave. As a true and grateful friend, China grieves for those who have sacrificed their lives in the fight, and rushes to offer its best help. On the evening of 20th May, Chinese President Xi Jinping and Prime Minister Sheikh Hasina spoke on the phone. The two leaders expressed appreciation for the mutual support between China and Bangladesh both before and during the COVID-19, reaffirmed our common commitment to a coordinated global response to the pandemic, and pledged to further our cooperation in addressing the situation and areas beyond. This conversation demonstrates the firm determination of the two countries to join hands to overcome the current difficulties. And it is of high significance as it laid down the guidelines to advance our joint response in fighting the COVID-19 as well as strengthening our strategic partnership of cooperation in a post-COVID-19 era.

During the conversation, President Xi reaffirmed China’s firm support to Bangladesh in fighting COVID-19 and its readiness to help where it can in light of the actual needs of Bangladesh, including sending a medical expert team to Bangladesh. And this very team will arrive in Bangladesh today, with hands-on experience and critical medical supplies for curbing the COVID-19 transmission and treating the patients. It is believed to be the first official foreign medical team in Bangladesh to assist in the fight against the COVID-19. This is also a vivid example of the fine tradition of mutual assistance between Bangladesh and China.

Having forged the idea that the world is a global community of shared future, and believing that it must act as a responsible member, China has fought shoulder to shoulder with the rest of the world. On May 18th, President Xi Jinping made a statement at the Virtual Event of the Opening of the 73rd World Health Assembly, where he mentioned that the history of human civilization is one of fighting diseases and tiding over disasters. The virus does not respect borders. Nor is race or nationality relevant in the face of the disease. Confronted by the ravages of the COVID-19, the international community has not flinched. The people of all countries have tackled the virus head-on. Around the world, people have looked out for each other and pulled together as one. With love and compassion, we have forged extraordinary synergy in the fight against the COVID-19.

And in this event, President Xi also announced that China would provide US$2 billion over two years to help with the COVID-19 response and with the economic and social development in affected countries, especially developing countries, and would contribute to ensuring the COVID-19 vaccine accessibility and affordability in developing countries as a global public good when vaccine development and deployment in China would be available. I believe all these practical measures will benefit Bangladeshi people in the near future. As a responsible major country, China will continue to cooperate with its best ability with the international community to prevail over the global fight against the COVID-19.

Solidarity and cooperation are the most powerful weapons for mankind to defeat the virus. The COVID-19 pandemic is an unprecedented crisis facing the mankind, and thus every country shares the same destiny. No country can guarantee its absolute security in public health alone until all countries are safe. The international community, therefore, needs solidarity and cooperation more than ever.

China is ready to continue to work with the international community to support WHO’s leadership in the global response, promote solidarity and cooperation among the international community, safeguard the Earth, build a global community with a shared health for all, and win the battle against the virus at an early date.

This year marks the 45th anniversary of the establishment of diplomatic relations between China and Bangladesh. As a Chinese proverb goes, “Only friendships built on sincerity can last long.” Over the past 45 years, the two countries have shown mutual respect, understanding, and support in their relationship. Pragmatic cooperation in a wide range of fields has been greatly expanded. The economies of China and Bangladesh are closely linked and highly complementary to each other. There are huge spaces for cooperation in public health, trade, investment, and engineering contracts between the two countries. The cooperation between China and Bangladesh not only benefits the peoples of the two countries but also benefits regional development and stability. China will always be the most reliable partner of Bangladesh and a firm builder and implementer of major infrastructure projects for the Belt and Road connectivity.

Looking ahead, we will work hand in hand with the government of Bangladesh and wider sectors of Bangladesh society to contain the pandemic, to overcome the temporary difficulties, and to jointly write a new chapter of bilateral cooperation. The virus cannot defeat humanity. We will eventually prevail over the stealthy foe.

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JUNE 07, 2020
Li Jiming is the current Ambassador of the People’s Republic of China to Bangladesh.

Posted in CURRENT ISSUES, FOREIGN RELATIONS & POLICY, Friends & Foes - World Reaction, INTERNATIONAL - PERCEPTION ON BANGLADESH, SOCIETY, SOCIO-ECONOMY -- Inequality, SOCIO-ECONOMY -- Inequality, Poverty, Distribution & Poverty | Leave a comment

CHINA WANTS ‘SISTER CITIES’ IN BANGLADESH

CHINA WANTS ‘SISTER CITIES’ IN BANGLADESH

The Chinese Communist Party is ready to support AL in combating Covid-19

The Communist Party of China (CPC) has said it is ready to support the Bangladesh Awami League in combating the coronavirus pandemic.

The party, which has governed China since 1949, also expressed its urge to make the Dhaka North City Corporation (DNCC), as well as some other major city corporations, “sister cities” to tackle the upcoming challenges.

A sister city is a broad-based, long-term partnership between two communities in two countries. The relationship is officially recognized after the highest elected or appointed officials from both communities sign an agreement.

Officials of the International Liaison Department of the CPC imparted this information, making the proposal at a webinar on countering Covid-19 on Tuesday afternoon.

Regarding the meeting, Dr Shammi Ahmed, International Affairs secretary of the Awami League, said: “International Liaison Department of CPC leaders told us they are ready to support Bangladesh to combat the Covid-19 pandemic.”

“Chinese leaders and experts of Wuhan city shared their Covid-19 experience with us. They are ready to provide medical support to Bangladesh to fight the pandemic,” she added.

The discussion lasted around two hours, according to DNCC Mayor Atiqul Islam.

According to insider sources, the CPC expressed its desire to build sister cities in Bangladesh and wanted to make those cities as developed as some Chinese cities.

“If the sister city proposal is approved, China will give all kinds of technical and financial support to combat the Covid-19 epidemic, dengue outbreak, and similar problems in those areas,” a top official present at the discussion told Dhaka Tribune.

Two topics, titled ‘Current situation of epidemic prevention and control and measures taken to prevent the disease’ and ‘Balancing the recovery of economic growth and production and the need to curb the outbreak’, were discussed in the webinar.

Muhammad Faruk Khan, chairman of the Parliamentary Standing Committee on Foreign Affairs, Dr Shammi Ahmed, Barrister Biplab Barua, special assistant to Prime Minister Sheikh Hasina and Office Secretary of Awami League, Mayor Atiqul Islam, and several other top officials of the DNCC participated in the discussion.

From the Chinese side, the leaders of the International Liaison Department of the CPC, representative of Hubei province, representative of Wuhan city, official in charge of community affairs of Wuhan, and some experts from Hubei province participated in the digital conference.

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MAY 19TH, 2020

Posted in CHALLENGES, CURRENT ISSUES, FOREIGN RELATIONS & POLICY, INTERNATIONAL - PERCEPTION ON BANGLADESH, SOCIETY, SOCIO-ECONOMY -- Inequality | Leave a comment

COVID-19: BANGLADESH RECEIVES MORE MEDICAL EQUIPMENT FROM CHINA

COVID-19: BANGLADESH RECEIVES MORE MEDICAL EQUIPMENT FROM CHINA

File photo: Medical equipment which were brought by a special aircraft that landed at Hazrat Shahjalal International Airport on Thursday, March 26, 2020 Courtesy

Chinese envoy says his country will send more medical logistics, team of experts to Bangladesh

A second batch of medical equipment, donated by the Chinese government, has arrived in Dhaka from Kunming, to help Bangladesh tackle the Covid-19 pandemic better.

A special Chinese government aircraft that brought in the equipment landed at Hazrat Shahjalal International Airport around 4:25pm on Thursday.

Confirming the matter to Dhaka Tribune, Dr Shahriar Sajjad, in-charge of the airport’s medical team, said the equipment included 10,000 testing kits, 10,000 personal protective equipment (PPE) and 1,000 infrared thermometers.

Prof Dr Abul Kalam Azad, the director general of health services directorate, received the medical supplies from Chinese Ambassador to Bangladesh Li Jiming at the airport.

Afterwards, addressing a briefing there alongside Bangladesh officials, Li said Bangladesh, with the support from China and other countries, will be able to win the fight against the Covid-19 pandemic.

Medical equipment from China | Dhaka Tribune“Be confident, Bangladesh. You will win,” he said, assuring that if China can win, Bangladesh can also win this battle, reports UNB.

Responding to a question, Li said he had a discussion with the Bangladesh health minister on sending a team of medical experts here.

“Bangladesh and China are working on it,” he said, emphasizing on continuing experience sharing and exchanges through online on issues related to Covid-19.

The ambassador said more medical logistics will be coming to Bangladesh from China on Saturday and Sunday. “This is just a beginning. Our support to Bangladesh will continue.”

“Today is Independence Day in Bangladesh. I’m very happy go handover the medical supplies on such a special day,” he said.

Meanwhile, two more special flights from China will also bring in more medical supplies, donated by the Jack Ma Foundation, in Dhaka.

The first flight will fly from Changsha on Saturday and will contain 30,000 coronavirus testing reagents. The second one will take off from Ningbo on the same day and will contain 300,000 masks, including 30,000 N95 medical masks and 270,000 single-use surgical masks.

These two special flights will land at Hazrat Shahjalal International Airport, Bangladesh Ambassador to China Mahbub Uz Zaman told UNB on Wednesday.

Helping the friends in need

Ambassador Li Jiming on Thursday also recalled Bangladesh’s support with the initiative of Prime Minister Sheikh Hasina when China received medical logistics from Bangladesh for Wuhan, the epicentre of the ongoing coronavirus pandemic. “We are doing something in return.”

Photo: CourtesyProf Abul Kalam said Bangladesh, which has so far recorded five Covid-19 deaths and total 44 cases, will utilize China’s experience as they have become successful in dealing with coronavirus.

In the face of this unprecedented global pandemic, China reiterated its strong commitment to helping friends in need and building a community of shared future for mankind. “We are together,” said the Chinese Embassy in Dhaka.

Foreign Minister Dr AK Abdul Momen on Sunday said the government was working to have adequate stock of medical logistics to deal with the situation here.

“We need it. We need to have enough stock,” he said, adding that the government was also allowing private companies to import testing kits and other medical logistics.

China recently announced its decision to donate emergency medical supplies, including a large number of test kits, to Bangladesh to fight the Covid-19 pandemic, which started from Wuhan in late December last year.

This Chinese Emergency Humanitarian Aid Project includes coronavirus test kits for 10,000 people, 15,000 medical N95 masks, 10,000 medical protective clothing, and 1,000 infrared thermometers.

Earlier, Jack Ma, co-founder and former executive chairman of Alibaba Group, announced to help Bangladesh and some other Asian nations contain the spread of coronavirus, by promising to donate emergency supplies, including masks, test kits, protective suits, plus ventilators and thermometers.

The other nations are – Afghanistan, Cambodia, Laos, the Maldives, Mongolia, Myanmar, Nepal, Pakistan and Sri Lanka.

Local companies in Bangladesh are also producing PPE and masks to address the needs.

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MARCH 26, 2020

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CHINESE MEDICAL EXPERT TEAM ARRIVES IN BANGLADESH TO HELP FIGHT COVID-19

CHINESE MEDICAL EXPERT TEAM ARRIVES IN BANGLADESH TO HELP FIGHT COVID-19

A medical expert team sent by the Chinese government arrived here on Monday to support Bangladesh’s fight against the COVID-19 pandemic.

Bangladeshi Foreign Minister AK Abdul Momen welcomed the team at the Hazrat Shahjalal International Airport in Dhaka on Monday afternoon. Chinese Ambassador Li Jiming, among others, was also present at the airport.

The 10-member team, organized by China’s National Health Commission, consists of experts from Hainan, the southernmost island province of China.

The Chinese medical experts will provide consultations of pandemic control, patients treatment and laboratory tests, and guide and train Bangladeshi medical professionals.

The Chinese team will stay in Bangladesh for two weeks, Foreign Minister Momen said in a media briefing at the airport.

He thanked the Chinese team for coming to Bangladesh to bolster the country’s efforts to combat the COVID-19 pandemic.

“Our medical professionals will also be encouraged by them,” he added.

He expressed hope that the relations between Bangladesh and China will be further deepened for mutual benefits.

In his speech, Ambassador Li said a pandemic such as COVID-19 shows that in today’s world no country could stand alone in a global crisis, adding that all must work together to address the challenges.

Mutual understanding and support between China and Bangladesh since the onset of the pandemic has shown the pragmatic cooperation of the two countries, he said.

As a pair of true and time-honored friends, China and Bangladesh have been standing in strong solidarity in the fight against COVID-19, he said.

Starting from February, China has provided Bangladesh with over 3 million surgical and N-95 masks, over 110,000 sets of personal protective equipment, and a large number of test kits, thermometers, ventilators, and sanitizers, to meet the most urgent needs of Bangladesh to contain COVID-19, he said.

The number of confirmed COVID-19 cases increased to 68,504 in Bangladesh on Monday, with the daily rise of 2,735 cases reported in the last 24 hours.

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JUNE 08, 2020

Posted in CURRENT ISSUES, FOREIGN RELATIONS & POLICY, Friends & Foes - World Reaction, INTERNATIONAL - PERCEPTION ON BANGLADESH, SOCIETY, SOCIO-ECONOMY -- Inequality | Leave a comment

COMMUNIST PARTY OF CHINA TO SUPPORT BANGLADESH IN FIGHTING COVID-19

COMMUNIST PARTY OF CHINA TO SUPPORT BANGLADESH IN FIGHTING COVID-19

Communist Party of China (CPC) will extend all kinds of support to Bangladesh to combat novel coronavirus (COVID-19).

The CPC leaders gave the assurance during a videoconference with the leaders of Bangladesh Awami League (AL). Dhaka North City Corporation (DNCC) organised the event at its office this noon.

Issues related to sending Chinese expert physicians to Bangladesh alongside providing necessary assistance to fight the pandemic also came for discussion between the leaders of the two parties.

In this connection, the Chinese ruling party leaders highlighted their experiences in containing the lethal virus.

Led by the Vice Minister of the Int’l Dept of the CPC HE Mr. Guo Yuzhou, the Chinese side comprised of high officials of the Int’l Dept of the CPC, Hubei provincial CPC, diplomatic, health and municipal policymakers of Wuhan City and Hubei province.

The Bangladesh side comprised of Mr Faruk Khan MP (Presidium Member, AL), Hon Health Minister Mr. Zahed Maleque MP, Hon Mayor of Dhaka North Mr. Atiqul Islam, Barrister Biplab Barua (Office Secretary, AL), Dr. Shammi Ahmed (Int’l Affairs Secretary, AL) and Tarik Hasan Shomi (Member, Int’l Affairs Sub Committee). The videoconference was conducted and moderated by Prime Minister’s Special Assistant Barrister Shah Ali Farhad.

The discussion was divided between two sessions: The keynote session and the discussion session. Relevant high officials of the Ministry of Health and Family Welfare and Dhaka North City Corporation were also present.

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MAY 19, 2020

Posted in CHALLENGES, CURRENT ISSUES, FOREIGN RELATIONS & POLICY, Friends & Foes - World Reaction, INTERNATIONAL - PERCEPTION ON BANGLADESH, SOCIO-ECONOMY -- Inequality, WORLD - GEOPOLITICS | Leave a comment

আজ পর্যন্ত আওয়ামী লীগের সভাপতি হয়েছেন যারা

আজ পর্যন্ত আওয়ামী লীগের সভাপতি হয়েছেন যারা

বাংলাদেশ আওয়ামী লীগ হল বাংলাদেশসহ এই উপমহাদেশের অন্যতম প্রাচীন রাজনৈতিক সংগঠন। আমাদেরমুক্তিযুদ্ধ থেকে শুরু করে সকল অর্জন, আন্দোলন সংগ্রামের ইতিহাসে জড়িয়ে আছে দলটি। প্রতিষ্ঠা লাভের পরথেকে এখন পর্যন্ত ২১টি জাতীয় সম্মেলন হয়েছে আওয়ামী লীগের। অতীতের সম্মেলনগুলোতে দলের শীর্ষ পর্যায়থেকে কার্যনির্বাহী কমিটি পর্যন্ত নির্বাচিত হয়েছেন শত শত নেতা। তবে এখন পর্যন্ত সভাপতি হয়েছেন সাতজন। এরমধ্যে বর্তমান সভাপতি দেশরত্ন শেখ হাসিনা সর্বোচ্চ নয়বার নির্বাচিত হয়েছেন। চলুন জেনে নেই সংগঠনটিরজন্মলগ্ন থেকে এখনো পর্যন্ত সভাপতির দায়িত্ব পালন করা মহিয়সী রাজনীতিবিদ দের সম্পর্কে।

মাওলানা ভাসানী

আতাউর রহমান খানের সভাপতিত্বে প্রথম জাতীয় সম্মেলনে প্রতিনিধি ছিল প্রায় ৩০০ জন। এই সম্মেলনেসভাপতি নির্বাচিত হন মাওলানা ভাসানী, সাধারণ সম্পাদক হন শামসুল হক, যুগ্ম সাধারণ সম্পাদক হন শেখমুজিবুর রহমান। ১৯৫৩ সালের থেকে জুলাই দ্বিতীয় সম্মেলন ১৯৫৫ সালের ২১ থেকে ২৩ অক্টোবর তৃতীয়সম্মেলন মিলিয়ে মোট তিনবার সভাপতি দায়িত্ব পালন করেন মাওলানা ভাসানী।

মাওলানা আব্দুর রশীদ তর্কবাগীশ

১৯৫৭ সালে চতুর্থ সম্মেলনের আগে মাওলানা ভাসানী পদত্যাগ করলে আব্দুর রশীদ তর্কবাগীশ ভারপ্রাপ্তসভাপতি নির্বাচিত হন। পরে ১৯৬৪ সালে পঞ্চম জাতীয় সম্মেলনে মাওলানা তর্কবাগীশ নির্বাচিতভাবে সভাপতিরদায়িত্ব পালন করেন।

বঙ্গবন্ধু শেখ মুজিবুর রহমান

 

১৯৬৬ সালের ষষ্ঠ জাতীয় সম্মেলনটি ছিল আওয়ামী লীগের জন্য ঐতিহাসিক একটি সম্মেলন। সম্মেলনেরমাধ্যমে দলের সভাপতি নির্বাচিত হন শেখ মুজিবুর রহমান। ১৯৬৮ সালে সপ্তম, ১৯৭০ সালে অষ্টম ১৯৭২সালের স্বাধীন বাংলাদেশে নবম জাতীয় সম্মেলনও সভাপতি নির্বাচিত হন জাতির পিতা বঙ্গবন্ধু শেখ মুজিবুররহমান।

এইচ এম কামারুজ্জামান

১০ম জাতীয় সম্মেলন ১১২ সার্কিট হাউজ রোডে দলীয় কার্যালয়ের সামনে অনুষ্ঠিত হয় ১৯৭৪ সালের ১৮জানুয়ারি থেকে ২০ জানুয়ারি পর্যন্ত। তখন দলের সভাপতি হন এইচ এম কামারুজ্জামান। এরপর ১৯৭৫এর১৫ আগস্টের ভয়াবহ ঘটনায় বঙ্গবন্ধু শেখ মুজিব সপরিবারে নিহত হন। আর তখন স্বাধীন বাংলাদেশের রূপকার মুক্তিযুদ্ধের আদর্শকে লালন করা দলটির ইতিহাসে সবচেয়ে বড় দুঃসময় নেমে আসে।

সৈয়দা জোহরা তাজউদ্দিন

১৯৭৭ সালের থেকে এপ্রিল হোটেল ইডেন প্রাঙ্গণে দলের ১১তম সম্মেলন অনুষ্ঠিত হয়। এতে কাউন্সিলরছিলেন প্রায় এক হাজার ৪০০ জন এবং ডেলিগেটও সমসংখ্যক ছিল। এতে দলের আহ্বায়ক নির্বাচিত হন সৈয়দাজোহরা তাজউদ্দিন।

আবদুল মালেক

১৯৭৮ সালের রাষ্ট্রপতি নির্বাচনকে সামনে রেখে অনুষ্ঠিত হয় দলটির ১২তম জাতীয় সম্মেলন। থেকে মার্চহোটেল ইডেন প্রাঙ্গণে প্রায় এক হাজার ৫০০ কাউন্সিলর এবং সমসংখ্যক ডেলিগেট নিয়ে অনুষ্ঠিত হয় সম্মেলনটি। এতে সভাপতি নির্বাচিত হন আবদুল মালেক।

শেখ হাসিনা

১৯৮১ সালের ১৪ থেকে ১৬ ফেব্রুয়ারি অনুষ্ঠিত সম্মেলনে কাউন্সিলর ডেলিগেট ছিল তিন হাজার ৮৮৪ জন। সম্মেলনে প্রথমবারের মতো দেশরত্ন শেখ হাসিনাকে সভাপতি নির্বাচিত করা হয়। এরপর ১৯৮৭ সালের ১৪তমজাতীয় সম্মেলন থেকে ২১তম জাতীয় সম্মেলন পর্যন্ত একটানা বাংলাদেশের সবচেয়ে প্রাচীন ঐতিহ্যবাহী দলটিরসভাপতির দায়িত্ব পালন করে যাচ্ছেন তিনি।

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JUNE 23, 2020

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GDP GROWTH OF BANGLADESH FORECASTED BY WORLD BANK (2020-2022) | ACTUAL GDP GROWTH OF BD (2009-2019)

Posted in ACHIEVEMENTS - SUCCESS, CHALLENGES, CURRENT ISSUES, DEFENCE & SECURITY, ECONOMY, GLOBAL INDICATORS & BENCHMARK, GROWTH & TARGET | Leave a comment

COVID-19 AND BANGLADESH: LOOMING CRISIS IN THE HORIZON

COVID-19 AND BANGLADESH: LOOMING CRISIS IN THE HORIZON

SMRUTI S. PATTANAIK

Bangladesh economy has been growing at seven per cent for the past five years. The country is supposed to graduate from a least developed country (LDC) to a developing one by 2021. However, the coronavirus pandemic or Covid-19 has emerged as a major challenge for the country’s economy at a moment, when most analysts believe that the economic stability has contributed to political stability, lent legitimacy to the Sheikh Hasina Government and weakened the opposition.

The Hasina Government is now in overdrive to meet the challenge head on, and ensure that this unforeseen threat does not snowball into a major national crisis. It ordered a complete lockdown in the country, starting March 26, for 10 days to begin with, and later extended it till April 10. As of April 8, Bangladesh has reported 218 positive cases of Covid-19, with 33 recoveries and 21 deaths. Besides, 111 people have been kept in isolation and a total of 68,324 people have been quarantined and 58,167 people have been released from quarantine.1What explains the government’s cautious approach is its realisation that being a densely populated country of more than 160 million people, the health-care system is not adequate to deal with possible escalation in country-wide transmission of the virus.

Government’s Initiatives

The Covid-19 pandemic has demonstrated how ill-prepared most of the countries are, including in South Asia, to deal with such a challenge. Bangladesh, like other countries in the region, reacted slowly to the pandemic even though the first confirmed case was reported on March 8, ordering a lockdown starting as late as March 26, whereby all public and private offices were closed and travel by air, road and waterways were stopped till April 6 which has now been extended to April 10. The Department of Immigration stopped issuing fresh passports until further notice. To further prevent Covid-19 from spreading, the domestic flights too were stopped from March 31.

The government also banned flights originating from Bahrain, India, Kuwait, Malaysia, Oman, Qatar, Saudi Arabia, Singapore, Turkey, and the United Arab Emirates (UAE), countries where many Bangladeshis are employed. Except for the United Kingdom (UK), it banned flights from other destinations in Europe and declared that after March 30 it would not allow its national carrier to fly to two destinations in the UK. However, the government notified that commercial flights to and from China, Hong Kong, Thailand and UK will continue their operations until further notice. From March 15, the government had also discontinued visa on arrival facility. Though on March 1 it flew back 312 of its citizens from Wuhan, it could not arrange flights to bring back 171 more citizens. An India Air Force special flight that went to Wuhan carrying medical supplies, evacuated 23 Bangladeshis along with Indians and also people from Maldives, Sri Lanka and Nepal.2 According to the Chinese Embassy in Bangladesh, 5,760 Bangladeshis are living in China.

Before government enforced the 10-day lockdown, starting March 26, thousands of people left Dhaka for their villages in other parts of the country in overcrowded buses, railways and ferries that were packed several times over their capacity. In her address to the nation on the eve of Bangladesh’s independence day on March 26, Hasina appraised the people about steps taken by the government and suggested them to follow instructions provided by the health department and not to panic.3 She later addressed the government officials working in 64 districts over video to coordinate Bangladesh’s fight against Covid-19 and extended the lockdown period till April 10. The government has drawn out a national action plan to deal with possible surge in Covid-19 cases. It has set up “committees from the national up to the upazila level with multisectoral involvement representing the relevant ministries and national and international organizations and development partners.”4

Many analysts attribute such low numbers to poor testing facility and believe that many more may have been affected. According to a report, only one suspected case is being tested for approximately 100,499 people in Bangladesh.5 While the Institute of Epidemiology, Disease Control and Research (IEDCR) remain the nodal agency, nine testing facilities are open in Dhaka and five outside of Dhaka.6 According to reports, the government has set up 1,050 isolation beds in the capital and 4,515 in the divisions and districts.7 However, the government’s efforts are well-supported by the Bangladesh Army, which has deployed 399 teams to work with the civil administration in 62 out of 64 districts. More than 5,000 troops have been deployed to help curb the spread of coronavirus across the country.8 The World Bank, to help Bangladesh, has fast tracked the approval of $100 million to prevent, detect, and respond to Covid-19 as per the national action plan of the government. India has provided 30,000 surgical masks and 15,000 head-cover to support the efforts of the Bangladesh Government.9 UK also has announced Tk 2.18 billion in aid.

The most difficult task before the government is how to prevent people from visiting mosques as it is a sensitive issue. The Islamic Foundation of Bangladesh has suggested that muftis must stay away from rumours and allow the continuation of the azan, Friday prayers and fazr prayers with a limited number of people. It has barred those who have returned from virus-affected countries or have symptoms of coronavirus, and those who are old and have serious ailments. However, such guidelines have remained on paper and largely ignored till date. The government, even though it denied permission for popular congregations, did not take any action when nearly 25,000 people gathered at Raipur in Lakshmipur District on March 19, for a mass prayer to contain coronavirus by chanting six Quranic verses of healing.10 On April 6, the Ministry of Religious Affair finally decided to suspend prayers for public at the mosques.

Another real danger for Bangladesh is the extremely congested Rohingya refugee camps. Most of the refugees stay in small huts and work outside the camp, exposing them to Covid-19 infection. Recently, a case was reported from Chittagong where these camps are located. Enforcing social distancing in these camps is practically impossible. What makes the situation more problematic is poor access to health facility and monitoring of suspicious cases in the camps. Refugees, however, are very much part of the government’s National Preparedness and Response Plan.

Impact on Economy

The lockdown is going to affect the country’s garment sector hugely. Already, H&M, a Swedish company and one of the major importers of garments from Bangladesh, has stopped placing orders. The Bangladesh Garment Manufacturers and Exporters Association (BGMEA) has informed that around 1,025 readymade garment (RMG) factories have reported postponement and cancellation of export orders worth $2.90 billion, affecting 2.10 million workers as of March 31.11 According to a report “cancellations of planned orders, for April-December, amounted to nearly $1.7 billion.”12 Most of the garment manufacturing units have closed down following the government order.

In financial year 2019, the country’s export earnings from the RMG sector were to the tune of US$ 34.13 billion, 83.52 per cent of the country’s overall export earnings. This sector also imported raw materials worth $12.18 billion.13 Due to the order banning movement of non-essential goods, some of the exporters are fearing congestion at the Chittagong Port. The total storage capacity of the port is 49,018 twenty-foot equivalent units (TEUs). However, the number of loaded containers has already risen to 40,000 TEUs.14 Therefore, given the lockdown, both import of raw materials, machinery and other products that feeds into the garment industry as well as export is likely to be affected.

It is important to note that the garment industries in Bangladesh employ mostly women and many of them are sole breadwinners for their families. Therefore, the government has not closed down the garment industries, leaving their management to individual manufacturers. According to a report, the industry employs around 3.5 million workers. As per section 16 of the Bangladesh Labour Act, which deals with the rights of laid-off workers for compensation, the companies have to pay half-day salary to the workers.15 In some cases, the garment workers stopped coming to the industry and some owners who were forced to shut down their industries have threatened to invoke section 13/1 of the Bangladesh Labour Act, according to which absence from work means employees are on strike and which would mean no payment.

According to Bangladesh Bank, “Earnings from woven garments and knitwear fell by 5.88 percent and 5.17 percent respectively during July-February 2019-20, as compared to the same period in the previous fiscal year.”16 This sector is already under stress and with Covid-19 the impact on this sector would be serious. The following chart shows the contribution of the garment industry to export earnings of the country.

Source: Major Economic Indicators: Monthly Update”, Bangladesh Bank, March 2020, p. 14.

To deal with this situation, the government has announced Tk 5,000 crore (US$ 590 million) bailout package to pay salary and wages to the workers employed in the garment industry and has offered loan at two per cent interest. The government has also announced an additional Tk 67,750 crore financial stimulus package. Any protracted lockdown combined with unchecked spread of the contagion would lead to unmitigated economic crisis and complicate the government’s response to it.

Bangladesh is also likely to receive low remittances, which is a major source of its foreign exchange, since most of the West Asian countries, Malaysia and other European countries, where 80 per cent of the Bangladeshi overseas workers are employed, are under lockdown too.17 Due to suspension of flights, many of these are stranded in West Asia without work and some of them who were preparing to leave are unable to return due to cancellation of flights. In many cases, these people pay huge amounts to middlemen and also take help of the Bangladesh Association of International Recruiting Agencies (BAIRA) and thousands of private agencies to find employment in these countries. Between 2009 and 2019, according to the Bureau of Manpower Employment and Training (BMET), 58,13,499 people have migrated out of Bangladesh for work.18Following pie chart reflects the remittances send by the Bangladeshi workers.

Based on “Wage Earner’s Remittance Inflows: Selected Country Wise (Monthly)”, Bangladesh Bank, July 2019-February 2020.

To conclude, Covid-19 is likely to have a severe impact on the Bangladesh economy. Apart from affecting the garment industry, the mainstay of Bangladesh’s export earnings, the possible reduction in remittances and loss of jobs due to global downturn could contribute to the fiscal deficit, which was 5.1 per cent of the GDP last year – an 11-year high.  The government has now announced short, medium and long term programmes to boost the economy by encouraging public spending, providing working capital at reduced rates for small scale industries and facilitating raw material imports under back-to-back LC.

However, the problem is, given the spread of epidemic and lockdown across the world, the import and export markets too have been affected. Amid the lockdown, some garment exporters have announced the opening of their industries, triggering a mad rush to reach Dhaka by walking as the workers fear that they would lose their jobs. This has brought widespread criticism as some of the owners are politicians or have close connection to the ruling party. Whether this could snowball into a political challenge for the government would largely depend on the nature, scope and intensity of the impact of Covid-19 on the economy, and the perception of the people about measures undertaken by the government to deal with the looming crisis.

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APRIL 09, 2020
Views expressed are of the author and do not necessarily reflect the views of the Manohar Parrikar IDSA or of the Government of India.

Posted in CHALLENGES, CURRENT ISSUES, ECONOMY | 1 Comment

CORONAVIRUS AND THE BANGLADESH ECONOMY: NAVIGATING THE GLOBAL COVID-19 SHUTDOWN

CORONAVIRUS AND THE BANGLADESH ECONOMY: NAVIGATING THE GLOBAL COVID-19 SHUTDOWN

As governments across the world enforce lockdowns to suppress the spread of Covid-19, and with global markets set for their worst quarter since the 2008 financial crisis, what will be the impact on Bangladesh’s economy? Here Sajid Amit (University of Liberal Arts Bangladesh) provides an overview of how small businesses, startups, the financial sectors, consumer demand, remittances and the ready-made garment sector will fare in the coming months.

Globalization has brought great benefits to Bangladesh’s apparel industry as international fashion companies farm out production to cost-effective centres for manufacturing, and by carefully orchestrating a supply chain that spans multiple countries, are still able to deliver products at stores, in time. Covid-19, however, has exposed the vulnerability of these cross-country supply chains, with negative consequences for Bangladesh.

The potential negative impact on Bangladesh’s economy due to Covid-19 however depends on the duration of the crisis. There is a limited possibility, following lockdowns around the world, that infections may return in subsequent wave(s), even if in limited quantities, which may continue to have economic impacts. There are experts however who argue that a potential global recession will fade out by Q4 2020. The International Monetary Fund (IMF) thinks that the recession will be worse, but more short-lived than the global financial crisis of 2008. The duration matters greatly for Bangladesh, because its economic fate is closely tied to the fate of countries that enable the two R’s that drive it: ready-made garments (RMG) and remittance.

The 2 R’s: RMG & Remittances

Ready-made Garments (RMG) companies that buy from Bangladesh are literally closing doors all over European and American cities. Stores have closed for H&M, GAP, Zara, Marks & Spencer, Primark, which are all major buyers. Shopping has come to a standstill as people avoid discretionary spending. There is also a measure of panic regarding raw materials sourced from China. As of 23 March, 264 Bangladeshi garment factories have faced cancellations. H&M, one of the largest buyers of Bangladeshi garments, has had to “temporarily pause new orders as well as evaluate potential changes on recently placed orders.”

At the time of writing, BGMEA President Ms. Rubana Huq suggested the total impact of order postponement/cancellations will amount to US$1.5 billion, which is roughly 50% of our average export income in a month. Insiders interviewed suggest that if the virus continues to impact global supply chains, buyer demand, and of course, health and safety of workers, by Q4 2020, loss in export revenues could reach US$ 4.0 billion.

This is not surprising because slowdown in US and EU economies have had ripple effects in the Bangladesh economy (Figure 1). This correlation is most evident for the global financial crisis in 2008, when Bangladeshi GDP growth curve mirrors those of US and EU, albeit the drop off was less severe than for the developed economies.

However, international credit rating agency Moody’s expects that the RMG sector in Bangladesh will recover by the end of the year, as demand recovers and supply chain shocks are overcome.

Meanwhile, the other pillar of the Bangladesh economy – remittances sent by migrant workers – will also take an inevitable hit. Bangladesh has around 10 million workers overseas, with a majority in the Middle East and the US, UK, and Malaysia. Travel restrictions as well as an economic slowdown and curfews in host countries in Saudi Arabia, UAE, Qatar, Kuwait, Malaysia, US and EU countries mean that workers are losing out on wages. The Japan News tells us a story of Jahirul Islam, 30-years-old, who will lose out on 2 months’ pay, after being instructed by his employer, the Abu Dhabi Sports Academy, to go home. While he decided to stay put for fear not being able to re-enter, there are news reports that an untold number of migrant workers have returned. There are also disconcerting stories of migrant workers being shepherded into “labour camps” in Qatar.

Furthermore, oil prices have fallen precipitously, which is expected to aggravate demand for migrant workers. Oil prices are often an effective leading indicator of inward remittances (Figure 2). History shows that falling oil prices have a lagged effect on remittances into Bangladesh. At present, prices are falling because of reduced demand from sectors such as aviation and transportation sectors, as well as the Russia-Saudi Arabia price war.

Overall, the drop in export revenues, RMG worker layoffs, and reduced flow of remittances will impact demand in the urban and rural consumer economy of Bangladesh.

Impact on Consumer Demand

According to the latest reports, scores of RMG factories are shutting down and workers are going back to the villages. This creates pressure on the rural economy at a time when urban-rural economic linkages have also been severely disrupted. To speak of the urban economy, malls have been closed from 25 March, as per directive of the Bangladesh Shop Owners Association. Only kitchen markets, grocers’ shops, shops selling daily essential commodities and pharmacies have been allowed to stay open. In Bangladesh, footfalls will be minimal in April, which is usually a time stores do brisk business, because of Pohela Boishakh.

In one interview, a retailer with a relatively high capital investment argued she would focus more on her online sales. Our research suggests that several large retailers will look to strengthen their online operations, if effects of Covid-19 last until May, which is the month of Eid, which is when retailers do most of their business. At the time of writing, Bangladesh supermarkets have had more resilient business, albeit for food items and groceries.

Of course, one of the hardest-hit sectors is aviation. In interviews conducted with one of the largest travel agencies in Bangladesh, there was considerable concern about paying staff salaries at a time when customers were seeking cancellations, refunds, and holidays were clearly out of the question. Globally, travel agencies have digitised significant components of their value chain, especially booking and payments. Certain Bangladeshi travel startups have invested in this space, and as a result, may fare better than the competition in the wake of the crisis.

However, travel agencies constitute a fragmented sector in Bangladesh, and owing to Covid-19, many small ones are expected to close shop. Airlines and hotels have also been badly hit. As of 1 March, Mr. Abdus Salam Aref, former Secretary-General of the Association of Travel Agents of Bangladesh, reportedthat outbound passengers had fallen by 70-80% and inbound, 35-40%. By the end of March, inbound passengers are expected to fall by 70-80%.

Overall, the current economic situation may seriously undermine the livelihood of the underprivileged cohort of the population. The Center for Policy Dialogue(CPD) has predicted that the effect of Covid-19 will be worst for people who are dependent on daily wages and low-income groups. Lack of access to basic healthcare, knowledge of hygiene and a social safety net have always been a challenge for this cohort and the pandemic is likely to increase these challenges, exponentially.

Challenges for the Financial Sector

Covid-19 catches the Bangladesh financial sector at an inopportune time. Banks were trying to come to terms with the Ministry of Finance directive of 6% and 9% caps to interest rates on deposits and loans; vulnerable asset quality; moribund capital markets; and a struggling microfinance sector as access to donor funds and bank financing become more competitive. It is worth noting that in the last three months, private sector credit growth was already declining (Figure 3).

A CEO of a leading private commercial bank suggests that banks were taking time to adjust to the 9% directive, as many were reluctant to lend at this rate. As effects of Covid-19 intensify, given that there have been several large-scale order cancellations for RMG clients, many loans may go into default, which is worrisome for the sector.

In the coming months, government sector bank borrowing may decline. This is because large projects such as the Padma Bridge, Padma Rail Link, Karnaphuli Road Tunnel and the Greater Dhaka Sustainable Urban Transport Project involve financial and technical input from China, both of which are expected to be adversely affected. However, a temporary slowdown in government borrowing may assist private sector lending, through a “crowding in” effect. The significance of this remains to be seen. The Bangladesh Bank has also attempted to pump cash into the economy. It has cut both repo rate and cash reserve ratio by 25 and 50 basis points, respectively.

Moreover, the central bank is buying dollars from commercial banks, with the intention of curbing taka’s appreciation against the dollar, has provided guidance on provisions for rescheduled loans, and instructed banks to extend tenure to realise export proceeds, while allowing importers time to make import payments. Once the current risks of infection subside, quantitative easing is expected to encourage banks to seek out investment opportunities. Whenever this happens, some of this liquidity may also find its way into the stock market.

Therefore, while markets are falling, and it is of course, never possible to time a market bottom, there are fundamentally strong equities trading at historically low prices at present.

Impact on Small Businesses and Startups

At times of economic turmoil, small businesses and startups are usually the worst hit. Raising funds is difficult as it is, for small businesses and startups. When it comes to SME’s, in an environment of 6% and 9%, access to finance will become more difficult as banks will be reluctant to make SME loans at 9%, since SME operations are more expensive for banks. It is hoped that the Government will offer SMEs some form of reprieve in the stimulus package that is being designed. For Bangladeshi startups, although the ecosystem is at an early stage, with a handful of startups responsible for a lion share of funds raised, Covid-19 has had adverse consequences.

Fundraising for startups is difficult even in a healthy economy. At the time of the coronavirus, when public equities are being deemed risky and even gold prices have been shaky, startup investing will likely take a considerable hit in the coming months.

The silver lining to this economic scenario is that the Bangladesh government has come out strongly and in a timely manner announcing a multisectoral stimulus package that will shore up RMG businesses, provide direct incentives to workers, buttress the banking system, ensure liquidity in the economy, enable reprieve to exporters and importers, and provide support to other impacted sectors such as tourism, aviation, and hospitality.

In the long run, Covid-19 will have exposed areas for improvement in our health care system, IT infrastructure, workplace cultures, and adaptability of our public and private sector leadership. The virus may also have the unintended consequence of enhancing our social protection and emergency response capacity. It may also push us further along the digital transformation curve. This is a curve we do not wish to flatten, but only steepen.

Given the Bangladesh government’s commitment to ensuring quarantine at a time when official figures of Covid-19 affected persons are low compared to other countries; the potential of a well-considered stimulus package; speedy monetary and fiscal interventions; and not to mention, a large informal economy; there is a possibility that the economy may show signs of reversal by Q4 2020. Of course, much depends on the capacity of RMG and manpower importing countries to recover from economic shocks.

Meanwhile, the resilience and resourcefulness of Bangladeshi people will surely be tested.

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An amended version of this article first appeared on University of Liberal Arts Bangladesh.
This article gives the views of the author, and not the position of the South Asia @ LSE blog, nor of the London School of Economics. 

Posted in CHALLENGES, CURRENT ISSUES, ECONOMY, GLOBAL INDICATORS & BENCHMARK, GROWTH & TARGET, INDUSTRIES, SOCIETY, SOCIO-ECONOMY -- Inequality, Poverty, Distribution & Poverty, STRATEGY & POLICY | Leave a comment

BANGLADESH ECONOMY IS GROWING RAPIDLY..

Posted in ACHIEVEMENTS - SUCCESS, CHALLENGES, CURRENT ISSUES, ECONOMY, GLOBAL INDICATORS & BENCHMARK, GROWTH & TARGET, INDUSTRIES, REFLECTION - Refreshing our Memories, SOCIO-ECONOMY -- Inequality, STRATEGY & POLICY, TRADE BODIES | Leave a comment