Bangladesh lays the red carpet for US investment, as Dhaka's importance in South Asia grows

Overall, the ties between the two countries are growing in all important domains, including security cooperation, climate change, food security, and energy sectors. In September 2021, two countries launched the US-Bangladesh Energy Taskforce, an initiative to help advance energy cooperation among the stakeholders of both countries

May 13, 2022
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US delegation meeting Hasina in Dhaka (Photo: Twitter)

Bangladesh’s potential as a promising investment destination is growing across the world, as indicated by the recent visit undertaken by a US delegation of business executives, as Dhaka attempts to bring more investment from western countries, including the US, by establishing 100 special economic zones.

In last fiscal year 21-22, Bangladesh’s total exports to the United States crossed $7 billion, with the latter becoming the former’s topmost export destination. In the last five years, exports to the US grew by over $3 billion, roughly 42 percent.

During her meeting with the US delegation, Prime Minister Sheikh Hasina assured them of the best possible policy framework and investment climate for their business. She even proposed to set aside some of its proposed special economic zones for American investors only.

According to Bangladesh media, Hasina said, “We may earmark one of the (special economic) zones exclusively for the US investors if you desire so."

Overall, the ties between the two countries are growing in all important domains, including security cooperation, climate change, food security, and energy sectors. In September 2021, two countries launched the US-Bangladesh Energy Taskforce, an initiative to help advance energy cooperation among the stakeholders of both countries.

“Our trade relations can be further strengthened with duty-free access and other trade privileges in the US market," Hasina told the US delegation, reported The Daily Star.

Bangladesh, which is recommended to graduate from the LDC (Least Developed Country) status in 2026, is aspiring to become a developed country by 2041.  However, for this to be achieved, the country would require foreign direct investment (FDI). Hasina also highlighted the need for more FDI, especially from the US. 

In the last few decades, Dhaka has undertaken a number of initiatives to develop its basic infrastructure, including universal access to electricity, rural roads development, passed legislation, and signed bilateral treaties to protect foreign investments.

The country’s skilled labor force with a demographic dividend across several sectors also makes it the preferred choice of destination for investment in South Asia.

The Asian Development Bank (ADB) has projected Bangladesh to grow by 6.9 percent in 2022. 

Bangladeshi officials have also used the visit as an opportunity to prod Washington to reverse a 2013 decision to suspend trade privileges to Dhaka over labor rights concerns, according to South Asia Brief of Foreign Policy.

The visit highlights a surge in US-Bangladesh relations, which seem to have plunged last year after Washington sanctioned Bangladesh's Rapid Action Battalion (RAB), an elite security force, of egregious human rights abuses, an action that Dhaka deeply resented. 

The 25-member delegation was part of the US-Bangladesh Business Council, an initiative launched last year. The trip comes after US Secretary of State Antony Blinken met with his Bangladeshi counterpart A K Abdul Momen in Washington, and just before a bilateral security dialogue in Hawaii this weekend. 

This cooperation is in part intended to showcase the strength of the US-Bangladesh partnership as they mark 50 years of relations, but Washington is also keen to work with Dhaka to counter Beijing, Foreign Policy said.

(SAM)

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