Connect with us

Economy

BD won’t fall into Chinese Debt Trap: AK Abdul Momen

Published

on

Debt

Bangladesh strongly ruled out the possibility of falling into any Chinese debt trap as the return on its investments is much higher than the cost of the funds, said Foreign Minister AK Abdul Momen at Bangladesh Business Summit 2023.

Foreign Minister said there is a wrong perception among many people that Bangladesh would slip into a Chinese debt trap.

“No way… no way,” Momen said.

He made the comments in reply to questions from Richard Quest, CNN’s Business editor-at-large, at the Bangladesh Business Summit.

The 3-day summit, organized by the Federation of Bangladesh Chambers of Commerce and Industry (FBCCI), partaken at the Bangabandhu International Conference Centre in Dhaka to showcase the country’s progress and potential to both global and local investors.

The debt-trap question has surfaced as Bangladesh has borrowed heavily from many countries, including China in recent years to pull off its growth targets. The bankruptcy of Sri Lanka, whose largest lenders include China, in 2022 has cemented the worries.

But Foreign Minister said Bangladesh has received many loans from international agencies with Japan being the largest bilateral lender.

“We are taking loans from all sources on a very prudent basis and in a calculative way.”

Of the $72.3 billion foreign loan, the World Bank accounts for $18.2 billion, followed by the Asian Development Bank ($13.3 billion), Japan ($9.2 billion), Russia ($5.1 billion), China ($4.8 billion) and India ($1.02 billion).

Whatever investments have been made with the debts, the return on the investments is higher than the cost of the funds, Momen said.

Bangladesh has a low risk of external and overall debt distress despite higher external borrowing in recent terms, said the International Monetary Fund in February.

Commerce Minister Tipu Munshi said it was true that the war has inflicted sufferings on the country.

“Yes, I can understand that people are suffering for the high price, but the government is trying to sort it out.”

However, Bangladesh is doing well despite some challenging situations, he said. “For instance, export incomes have increased amid the global economic turmoil.”

The commerce minister admitted that the worry remains due to the lingering war.

He is optimistic about continuing the development journey as the country is benefiting from demographic dividends and the business climate is conducive.

The commerce minister spoke about the government’s investments in the education sector.

“We have to go for various types of investments in the sector, particularly for work-related education such as vocational training and technical education. This will help our economy.”

Quest questioned whether the upcoming election would be free and fair.

Responding, the foreign minister said the government has organized thousands of elections over the last 14 years.

“All institutions have been developed for a free, fair, transparent and credible election.”

“We have put in place transparent ballot boxes and we have an independent election commission with full authority. Therefore, we believe the upcoming election would be free, fair and credible.”

The government established a level-playing field, he said, urging all parties to participate in the elections.

When Quest pointed to people’s perception of whether the government has turned into authoritarian and anti-democratic, the foreign minister said there are both right and wrong perceptions.

“Unfortunately, in our society, people falsify many things. But in the long run, people behave very smartly and when they vote, they vote for us. Every class of the population is very happy with the performance of the present government,” he claimed.

In a separate session, Prime Minister’s Private Industry and Investment Adviser Salman F Rahman, said “We want a real export-based Bangladesh from where software, as well as hardware, will be exported. Already a number of companies are producing hardware.”

In order to support the fast-growing economy, the government is building a deep-sea port in Matarbari. It will go into operation in 2026.

Everybody is surprised that Bangladesh has made tremendous progress despite not having a deep seaport, Rahman said. “We are increasing the capacity of Chattogram port, Mongla port and Payra port.”

“It will be a real game-changer for us when the deep seaport becomes operational.”

Speaking about the sources of finances, the adviser said Japan is bankrolling the Matarbari port project.

“We are talking to companies in Singapore, Saudi Arabia, and the UAE for the management of the port.”

The government is going to hand over the Chattogram port to private operators for its management.

“In fact, today we are going to sign an MoU with Saudi Arabia,” Rahman said.

He ruled out the chance of Bangladesh facing a Sri Lanka-like situation.

The Island nation plunged into a serious crisis last year after its foreign currency reserves dried up.

Owing to escalated commodity prices, Bangladesh’s reserves have slipped to a six-year low of $31.15 billion, meaning it has fallen by about 30 percent from the $44.14 billion recorded in March last year.

“We are not going to hand over the ownership of the ports. So, there is no worry that our economy will face a situation that the Sri Lankan economy had faced,” said Rahman.

The British journalist wondered how Bangladesh would transform itself into a digital nation when he had to spend two hours traveling a distance of two kilometers.

“We are in a growing stage. Our infrastructure development is taking place. The metro rail is already operational and the elevated expressway is going to be operational. If you come back after five years, you will just need 20 minutes instead of two hours,” Rahman answered.

During her presentation, Tini Sevak, vice president for audiences and data at CNN International, said a green supply chain would have a greater effect on companies in the coming days.

Bangladesh has already begun its journey to modernize its workplaces following a number of disasters a decade ago. Today, the country has the highest number of green garment factories in the world.

“Technology will be a key factor too for the future growth of companies,” Sevak said.

The summit also aims to draw foreign direct investment (FDI).

FDI to Bangladesh rose 13 per cent year-on-year to $2.89 billion last year. But the inflow has been far lower than the expected level given the country’s business volume and potential of the economy.

In recent times, globally FDI was impacted across many industries due to the supply chain disruptions stemming from the pandemic, the war and major layoffs by technology companies, Sevak added.

Rob Bradley, senior vice-president for ad sales and digital commercial strategy at Warner Bros. Discovery for Asia Pacific and Latin America, Md Jashim Uddin, president of the FBCCI, Xiangchen Zhang, deputy director-general of the World Trade Organisation, and Laurent Olmeta, CEO of CMA CGM Asia Pacific Limited, a logistics company, also spoke.

Share this

Economy

Major American Corporations Eye Investments in Bangladesh: State Minister

Published

on

State Minister Ahsanul Islam

State Minister for Commerce Ahasanul Islam Titu announced on Tuesday (May 28) that major American conglomerates, including Amazon, Chevron, Coca-Cola, and Boeing, are showing keen interest in investing in Bangladesh.

“We are working to streamline the investment process for American companies, ensuring they can operate smoothly without any obstacles,” State Minister Titu told reporters following a meeting with a delegation from the US-Bangladesh Business Council at the Ministry of Commerce.

The minister highlighted that the discussion focused on simplifying investment procedures and removing any barriers that might deter new American companies from entering the Bangladeshi market.

A representative from Amazon attended the meeting, where discussions centered on the potential for Amazon to integrate Bangladeshi products into its global supply chain and enhance the local e-commerce infrastructure. “Amazon is looking into establishing a central warehouse in Bangladesh to facilitate regional and international product distribution,” Titu added.

The US delegation also explored opportunities in energy, digital payments, and startup sectors.

Titu outlined the primary goals of the United States-Bangladesh Business Council: improving market access for Bangladeshi products, facilitating US investments in Bangladesh, and strengthening bilateral relations. These efforts align with the government’s Smart Bangladesh strategy aimed at strategic growth.

Addressing concerns about some American companies withdrawing their investments from Bangladesh’s capital market, Titu emphasized the importance of welcoming international conglomerates. “If Facebook, Amazon, Chevron, Coca-Cola, and Boeing become involved in Bangladesh’s business landscape, it will significantly ease the country’s progress,” he stated.

Titu also mentioned Bangladesh’s scheduled graduation from the Least Developed Countries (LDC) category in 2026 and stressed the importance of securing market access in various countries within the next two years.

He assured that the government is committed to attracting international investors through policy support, emphasizing Bangladesh’s potential as a significant market with a stable government expected for the next five years.

Share this
Continue Reading

Economy

Bond Market Reforms Key to Investment Growth: Salman F Rahman

Published

on

salman f rahman

Prime Minister’s Private Industry and Investment Adviser Salman F Rahman today underscored the need to bolster the country’s capital market to secure funding for investors.

“Globally, the capital market is the primary source for raising finance for investors. However, in our country, businessmen typically rely on bank loans for mid-term investments or expansion. We are working towards improving the bond market,” he stated.

Salman made these remarks following a meeting with an executive business delegation from the US-Bangladesh Business Council at the Bangladesh Investment Development Authority (BIDA) Bhaban in the city, sources said.

The meeting was attended by Board Chair of the US-Bangladesh Business Council and President and CEO of Excelerate Energy, Steven Kobos, along with President of the US-Bangladesh Business Council and South Asian Vice President of the US Chamber of Commerce, Ambassador (ret) Atul Keshap, among others.

Speaking to reporters, Salman mentioned the government’s efforts to safeguard the capital market from manipulation. “Share prices depend on the market. The government never interferes in this regard. The primary role of the government is monitoring,” he added.

He also highlighted the importance of institutional investors in strengthening the country’s capital market.

Moreover, Salman noted that US entrepreneurs have shown increased interest in investing in Bangladesh, recognizing the current government’s various development initiatives.

Share this
Continue Reading

Economy

PM Sheikh Hasina Seeks U.S. Business Support for ‘Smart Bangladesh’ Vision

Published

on

Sheikh Hasina

Prime Minister Sheikh Hasina today called on U.S. businessmen to support Bangladesh’s goal of becoming a developed and smart nation by 2041. Addressing a delegation from the US-Bangladesh Business Council at her official residence in Ganabhaban, she emphasized the importance of their partnership in this transformative journey.

“We aim to become a ‘Smart Nation’ by 2041. Your support in enhancing our global competitiveness and expanding our export base is crucial,” she said.

The Prime Minister highlighted Bangladesh’s imminent graduation from a “least developed” to a “developing” country in 2026, attributing this progress to sustained efforts over the last 15 years. “Our efforts have led to Bangladesh being recognized globally as a ‘Role Model of Socio-Economic Development’,” she stated, citing good governance, the rule of law, rural investment, women’s empowerment, and ICT advancements as key factors.

Sheikh Hasina noted the longstanding economic and developmental partnership with the U.S., which is Bangladesh’s largest export destination and source of foreign direct investment. She expressed optimism about further strengthening this relationship.

“To protect our economy from current pressures, investment—both domestic and foreign—is vital. The implementation of Bida’s One Stop Service (OSS) will facilitate this,” she said, addressing the OSS implementation progress review meeting at the Bangladesh Investment Development Authority’s (Bida) headquarters.

She urged the U.S. business community to invest in Bangladesh’s high-potential sectors, including renewable energy, shipbuilding, pharmaceuticals, and ICT. “We are establishing 100 Special Economic Zones (SEZs) and 28 hi-tech parks, making Bangladesh a prime destination for IT investments,” she added.

Highlighting Bangladesh’s competitive advantages, she mentioned the availability of a young, skilled workforce at competitive wages and the country’s liberal investment policy. She reassured investors of the government’s commitment to improving the investment environment.

In response to the Prime Minister’s address, Bida Executive Member Mohsina Yasmin presented a report on OSS progress, while NBR Chairman Abu Hena Md Rahmatul Muneem assured the business community of considering logical amendments to the Customs Act.

Sheikh Hasina underscored Bangladesh’s significant socio-economic achievements, including reduced poverty rates, increased life expectancy, and higher literacy rates, particularly among women. She noted that Bangladesh is currently one of the world’s fastest-growing economies, projected to be the 25th largest by 2030.

Share this
Continue Reading