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Bangladesh should enhance economic engagement with Saudi Arabia

Because of Dhaka’s economic success, Saudi Arabia now perceives Bangladesh as a lucrative investment destination, writes Hussain Shazzad for South Asia Monitor

Hussain Shazzad Mar 12, 2022
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Saudi Crown Prince Mohammed bin Salman with Bangladesh’s Prime Minister Sheikh Hasina. (Photo: ArabNews)

The official journey of Bangladesh and Saudi Arabia relations started in 1975 when Riyadh recognized the newly born South Asian nation as a sovereign country. Since then these two countries have maintained cordial and close friendship. State-level visits from both sides have contributed to further developing their bilateral bonding.  

The current Saudi Foreign Minister, Prince Faisal bin Farhan Al Saud, is expected to visit Bangladesh on March 16. Bangladesh expects the visit will take bilateral ties to new heights by ensuring more economic cooperation. 

Muslim-majority Bangladesh attaches a special priority to its relations with Saudi Arabia as the birthplace of Islam. Both countries have common social norms and cultural values derived from their religious practices. Also, they share similar views on many regional and global issues, especially those directly related to the Muslim world. Their common interest led them to cooperate in different regional and international platforms such as the Organization of Islamic Cooperation (OIC) and the United Nations.  

Deepening cooperation

Their current ties have further been reinforced by deepening cooperation in the fields of investment, trade, investment, manpower, defense, education and culture. As Bangladesh perceives Saudi Arabia as one of its trusted friends, it is the need of the hour to analyze the expectations of Bangladeshis from the Saudi Minister’s visit.

The tremendous economic growth of Bangladesh in the last 50 years has made the country a financial and industrial hub of South Asia. According to the World Bank, Bangladesh is one of the fastest growing economies of the world supported by its consistent growth in ready-made garment exports, demographic dividend and stable macroeconomic conditions.  

Because of the economic success, Saudi Arabia now perceives Bangladesh - going beyond the religious dimension - as a lucrative investment destination. Saudi Arabia is now one of the most reliable bilateral development partners of Bangladesh, the relations dynamics of which have evolved from one-layered to multi-dimensional cooperation over time. 

The Bangladesh Economic Zones Authority (BEZA) is planning to allocate some 300 acres of land to Saudi investors in Bangabandhu Sheikh Mujib Shilpa Nagar in Chattogram. It is expected that both countries will sign billion-dollar worth investment proposals, from the part of Saudi Arabia, including some energy sector-related projects. Saudi investors can invest in Bangladesh's 100 special economic zones, large-infrastructure undertakings, textiles, IT and agro-based industries. 

Bangladeshis in Saudi Arabia 

Saudi Arabia is the most sought after destination for Bangladeshi expatriates. From 1976 to 2021, Bangladesh exported 45.81 lakh migrant workers to the Kingdom -- almost 34 percent of the country’s total manpower export. Even amid the pandemic gloom in 2020 when most labor markets remained shut down, the Kingdom employed over 160,000 Bangladeshi workers.  

Last year, Bangladesh exported over 600,000 migrants abroad, of which 460,000, almost 76 percent, went to Saudi Arabia. In the last five years, Saudi Arabia has become the top destination for Bangladeshi migrant workforces. The richest Gulf country is implementing a number of mega projects under its Vision-2030 which may turn the country a better job destination for Bangladeshis if proper steps are taken during the upcoming visit. 

Bangladesh is on the highway to be graduated from the Least Developed Country (LDC) group by 2026. After the graduation, Bangladesh will not be eligible for many preferential treatments that are exclusively available for LDCs in global trade. Limited access to these preferential facilities will have adverse impact on the balance of payment of Bangladesh, especially with the unavoidable negative impact on its total export earnings. To counter these challenges, Bangladesh may negotiate with Saudi Arabia to ensure duty-free access to the Saudi market even after the LDC graduation. 

Support for Rohingyas

Since the genocide orchestrated by Myanmar military on Rohingya community in 2017, Bangladesh has been hosting 1.2 million Rohingya refugees. Besides, Bangladesh had been experiencing a negative trend in the international humanitarian assistance funds for supporting these refugees.  

Being the leader of the Muslim world, Bangladesh may expect that Saudi Arabia will take initiative to end the plight of Rohingyas by ensuring their safe and dignified return to their homeland. Bangladesh may talk with the Saudi minister regarding more financial support to ensure life-saving assistance required to support the Rohingya refugees. 

(The author is a Dhaka-based strategic affair and foreign policy analyst. Views are personal. He can be reached at pksf.shazzad@gmail.com) 

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