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Look beyond traditional regional trading blocs
FBCCI president says as the federation intensifies efforts to explore new markets
Refayet Ullah Mirdha
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B ANGLADESH needs to look beyond traditional regional trading blocs in order to widen business opportunities and avoid squeezing of preferential trade benefit once the country becomes a developing nation, the country’s top business leader said.
“Bangladesh’s duty-benefit will go when Bangladesh graduates to a developing country. So, we need to create opportunities for preferential trade benefits for higher exports,” said Sheikh Fazle Fahim, president of the Federation of Bangladesh Chambers of Commerce and Industry (FBCCI), in an interview with The Daily Star recently.
For instance, if Bangladesh can obtain preferential trade benefits in the Association of Southeast Asian Nations (Asean), a ten-nation bloc, the country’s trade would get a shot in its arm.
Fahim, who was elected as the president of the apex trade body for 2019-2021, said the trade among the eight-country South Asian Association for Regional Cooperation (Saarc) is very low and it might be even below five percent of their total foreign trade.
The agreement to implement the South Asian Free Trade Area (Safta) came into force in 2006, but the Safta is still far from achieving the goal of tariff-free trade, largely because of para- and non-tariff barriers.
“The country should explore business opportunities in the blocs such as the BIMSTEC (the Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation) and from some bilateral trade agreements,” Fahim said.
The comments from the entrepreneur came as Bangladesh is on course to becoming a developing country by 2024 from a least developed country on the back of its steady and higher economic growth.
Once Bangladesh becomes a developing nation, its duty-free market access to developed markets such as the European Union may be squeezed if it is not granted a new facility.
Of Bangladesh’s $100 billion international trade last fiscal year, imports accounted for $60 billion and exports $40 billion, Bangladesh Bank data showed.
Trade bloc-wise, other Asian countries accounted for 34.5 percent of the imports in the April-June period of 2019, followed by the Organisation of Islamic Cooperation (21 percent), the Asean (16.8 percent), the Saarc (15.1 percent), the EU (6.9 percent), and the North American Free Trade Agreement (4.6 percent), BB data showed.
The EU members are the largest buyers of Bangladeshi products, accounting for 58.8 percent of the total exports in April-June, followed by the Nafta (19.7 percent), the OIC (4.9 percent), the Saarc (3.4 percent), and the Asean (2 percent).
“The FBCCI has taken some initiatives to explore business opportunities in new trade blocs,” said Fahim, currently the managing director of Obsidian Bangladesh Ltd, which has business interests in manufacturing, distribution and engineering, procurement and construction.
The federation is going to hold several summits next year in Dhaka in association with a number of international trade bodies and regional trade blocs.
In order to deepen further engagement with the trade bodies and trade blocs, the apex trade body will hold a summit with the business chambers of the D-8 Organization for Economic Cooperation, the Commonwealth Business Forum, and the Commonwealth Asia Business Forum.
“Moreover, Bangladesh will be the focus country in the next year’s China-South Asia Business Forum to be held in China,” he said.
The inaugural Bangladesh Expo is scheduled to be held in December next year to showcase the country’s traditional and non-traditional goods to international consumers. Businessmen and enterprises from more than 105 countries are expected to attend the event.
“Such year-long activities will improve the country’s business ties with other countries,” said Fahim, also the chairman of Euro Petro Product Ltd, a liquefied petroleum gas terminal and bottling plant.
Currently, the FBCCI, which has more than 500 members, has intensified efforts to deepen engagement with private sector organisations at home and abroad with a view to attracting more businesses and investment.
“Bangladesh has a lot of potential as the country has a commendable consumer base with handsome purchasing capacity. However, the country needs a lot of positive campaigns to reach foreign entrepreneurs,” the business leader said.
Bangladesh’s per capita gross national income jumped more than 9 percent to $1,909 last fiscal year from $1,751 a year ago, officials statistics showed.
Fahim said the investors and businessmen who attended the conference of the Confederation of Asia-Pacific Chambers of Commerce and Industry (CACCI) in Dhaka last month had initially even refused to travel to Dhaka because of travel alerts issued by their home countries.
“However, when they came, their perception about Bangladesh changed immediately after seeing the massive economic development in the country,” he said.
According to Fahim, many foreign investors are interested to invest in Bangladesh. The foreign delegates, who attended the CACCI conference, sought information on investment opportunities in energy, smart agriculture, training and skills development projects.
For instance, many Australian and Korean investors want to invest in training up nurses so that they can recruit them, he said.
The foreign entrepreneurs also wanted to know about Bangladesh’s port operations, trade and logistic facilities, said Fahim, who earned a Master of Liberal Arts degree in political economy from St Edward’s University in Austin, Texas and attended Harvard University as part of the graduate programme.
The FBCCI is working to facilitate start-ups, especially at the district level, in order to create new entrepreneurs. It plans to launch an MBA programme at school-level so that children can start acquiring business knowledge from their childhood.