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PM Sheikh Hasina Invites Commonwealth Nations to Invest in Its Booming Market

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PM Sheikh Hasina Invites Commonwealth Nations to Invest in Its Booming Market

Prime Minister Sheikh Hasina has extended an invitation for investment from Commonwealth countries and others into Bangladesh, emphasizing the nation’s strategic location as a gateway to a market of three billion people. During the inauguration of the two-day Commonwealth Trade and Investment Forum-2023, she highlighted Bangladesh’s position at the heart of this expansive market and its own population of 170 million. Sheikh Hasina also projected that, by 2030, Bangladesh’s affluent population would reach 35 million, making it the world’s third-largest market, surpassing Germany and the United Kingdom.

Sheikh Hasina expressed her government’s readiness to establish enduring partnerships with nations and investors willing to contribute to Bangladesh’s development and that of other Commonwealth countries through this forum. She underlined the need for high-quality and sustainable investments to accelerate Bangladesh’s economic advancement.

The Prime Minister pointed out that her government had prioritized organizational reforms and established entities such as the Bangladesh Investment Development Authority (BIDA) and the Bangladesh Economic Zones Authority (BEZA) to facilitate investors with attractive incentives and post-investment services. She emphasized that almost all sectors in Bangladesh are open for investment, with a particular emphasis on encouraging investments in agriculture, food processing, leather, medical equipment, automobiles, shipbuilding, and ICT.

Furthermore, Sheikh Hasina highlighted Bangladesh’s leadership in the Commonwealth Business to Business (B2B) Connectivity Cluster and its goal to achieve the Intra-Commonwealth trade target of US$2 trillion. She proposed the formation of a “Legal Reform and Digitization Working Group” among Commonwealth members to promote trade and business while maintaining a balance with climate concerns.

She underscored that a significant portion of Bangladesh’s foreign direct investment stems from reinvestment, indicating the favorable investment environment. BIDA’s one-stop fast-track delivery service, providing access to 78 services from 26 government departments through a single platform, was also noted.

Regarding infrastructure development, Sheikh Hasina highlighted the establishment of economic zones, hi-tech and software technology parks, and IT training centers across Bangladesh. She mentioned ongoing efforts to improve land, rail, and air connectivity, including the Padma Bridge, the first underwater tunnel in South Asia in Chattogram, and the development of Matarbari Deep Sea port.

To bolster logistics capabilities, the government has set up a “Floating LNG” terminal and is constructing the Payra Sea Port and Chattogram Bay Terminal. Infrastructure enhancements, such as the Hazrat Shahjalal International Airport’s Third Terminal and Cox’s Bazar Airport’s upgrade, are poised to enhance business prospects.

The Prime Minister outlined Bangladesh’s socio-economic progress, transitioning from a “digital Bangladesh” to a “Smart Bangladesh” by building a smart government, smart citizens, a smart economy, and a smart society. The nation’s goal is to become a knowledge-based and developed smart country by 2041 and a prosperous delta by 2100.

The Commonwealth Trade and Investment Forum-2023 was organized by the Commonwealth Enterprise and Investment Council (CWEIC) in collaboration with the Bangladesh Investment Development Authority (BIDA), the Ministry of Foreign Affairs, and ZI Foundation. The event featured the presentation of the “Commonwealth-Bangladesh Bangabandhu Green Investment Award,” with Eco Brixs of Uganda as the recipient.

In the two-day forum, participants from various countries engaged in over 12 sessions, reflecting the Commonwealth’s role as a voluntary association of 56 countries sharing common values, with Bangladesh as its 34th member since 1972.

 

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Modi Likely to Visit Bangladesh in First Bilateral Trip Post-Re-Election

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Indian Prime Minister Narendra Modi is set to visit Bangladesh later this month, marking his first bilateral trip following his re-election.

Initially, Bangladeshi Prime Minister Sheikh Hasina was slated to visit India at the end of June or early July. However, following her attendance at Modi’s swearing-in ceremony in New Delhi over the weekend, plans have shifted. According to the Economic Times, Modi is now preparing for a visit to Dhaka in response to an invitation extended by Hasina.

This prospective visit aligns with India’s ‘Neighbourhood First’ policy, aimed at reinforcing its leadership role in South Asia.

During their meeting in New Delhi on June 9, Hasina formally invited Modi to visit Bangladesh. Although exact dates for the visit are yet to be finalized, the agenda will likely focus on enhancing cross-border connectivity, energy cooperation, and business ties between the two nations.

Sources indicate that India is keen on strengthening its security and defense partnership with Bangladesh, reflecting the strategic importance of this bilateral relationship.

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Moody’s Predicts Further Decline for Bangladesh’s Taka Amid Currency Policy Shift

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Bangladesh’s taka is expected to plunge further into record-low territory as the central bank loosens its control over the currency, according to Moody’s Ratings.

Young Kim, an analyst at the rating firm in Singapore, projects that the taka will likely weaken by another 2% to around 120 per dollar by the year’s end. This forecast comes as the currency has been hitting a series of record lows in recent days.

The central bank’s recent introduction of a crawling peg system is anticipated to align the taka’s value more closely with its rate in the unofficial market, Kim explained. This adjustment is part of a broader package of policies recommended by the International Monetary Fund, which provided Bangladesh with a $4.7 billion bailout program last year. This policy shift aims to help the nation prevent further depletion of its foreign exchange reserves—a factor Fitch Ratings cited when it downgraded Bangladesh’s credit score further into junk status in May.

“Most of the pressure for Bangladesh is external, centered around the fixed-exchange rate that caused a distortion between the market and the official rate,” Kim noted. “This significant devaluation of the taka helps reduce some of these imbalances by narrowing that gap.”

In May, the central bank implemented the crawling peg exchange rate system and set the mid-rate at 117 taka per dollar. This move prompted an almost 8% decline in the currency this quarter. On Tuesday, the taka weakened further by 0.3%, reaching 117.7 against the dollar and closing at a new low.

Amidst the currency devaluation, Bangladesh is also cutting spending and raising taxes to narrow the budget deficit and boost revenues, as the country faces a steady erosion of foreign reserves. To curb inflationary pressure, the central bank has transitioned to market-based interest rates, responding to the fastest pace of price increases seen in seven months in May.

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Bangladesh, ADB Ink $250M Loan Deal for Social Resilience Program

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The Asian Development Bank (ADB) and the government of Bangladesh have signed a $250 million loan agreement to bolster Bangladesh’s social protection system.

Md. Shahriar Kader Siddiky, Secretary of the Economic Relations Division (ERD), and Edimon Ginting, ADB’s Country Director, signed the agreement today at a ceremony held at the ERD in the capital.

“The Second Strengthening Social Resilience Program aims to accelerate reforms by increasing the coverage and efficiency of protection, improving financial inclusion for disadvantaged people, and strengthening the response to diversified protection needs,” stated Country Director Edimon Ginting.

Building on the first Strengthening Social Resilience Program completed in June 2022, this second initiative seeks to improve the policy, regulatory, and institutional framework for social protection in Bangladesh. This program aligns with the government’s Action Plan Phase II of the National Social Security Strategy (2021-2026), aiming to enhance the social protection system’s protective and preventive capabilities.

According to a press release, the program will improve efficiency in social protection program management, increase protection for the most vulnerable populations, and expand the scope of social protection by introducing contributory schemes. These measures aim to reduce vulnerability, social exclusion, and the risk of further poverty.

The program will introduce a beneficiary verification scheme for cash-based social protection programs to minimize leakages. It will also merge two cash-based protection programs for people with disabilities to improve efficiency and effectiveness.

To address climate vulnerability, the program will integrate climate adaptive measures into social protection, including identifying individuals most at risk from climate change-induced disasters to ensure appropriate assistance.

ADB’s support will enhance protection for vulnerable women and transgender people by increasing the number of beneficiaries under the widow allowance program and extending the livelihood support program for transgender individuals.

Additionally, Bangladesh Bank will double its funding for the Small Enterprise Refinancing Scheme for Women Entrepreneurs to improve access to financial services for women small business operators.

Another key objective of the program is to strengthen the governance mechanism of the employment injury scheme pilot, particularly in the ready-made garments sector. It also supports establishing a tripartite committee comprising workers’ associations, employers’ associations, and the government to advance social protection for workers under the Ministry of Labour and Employment, a crucial step in developing the country’s social insurance schemes.

To support the implementation, technical and policy analyses, and capacity building of relevant government agencies, ADB will provide a $1 million grant from its Technical Assistance Special Fund (TASF 7) and another $1 million grant from the ADB-administered Community Resilience Partnership Program Trust Fund under the Community Resilience Financing Partnership Facility.

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