Economy
BD won’t fall into Chinese Debt Trap: AK Abdul Momen
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.
Prime Minister Sheikh Hasina today (25 April) called for speaking out against all forms of aggression and atrocities, and say ‘no’ to wars.
“We must speak out against all forms of aggression and atrocities, and say ‘no’ to wars,” she said adding that Bangladesh supports the UN Secretary General’s ‘New Agenda for Peace.
The prime minister was addressing the 80th Session of the United Nations Economic and Social Commission for Asia and the Pacific (UNESCAP) held at the ESCAP Hall (2nd floor), United Nations Conference Center (UNCC) here.
She arrived in Bangkok on Wednesday on a six-day official visit to Thailand.
The PM said the pre-condition for sustainable development is lasting peace and security.
“We must settle regional disputes and tension through dialogue. Our mutual respect for national sovereignty and territorial integrity must remain paramount,” she said.
Hasina called upon the Asia-Pacific region, especially ASEAN, to redouble their efforts to end Rohingya crisis as all efforts at regional connectivity, integration, and prosperity will continue to be marked by a missing puzzle without it.
“The origin of their crisis has been in Myanmar, and its solution also lies in Myanmar,” she declared.
“As long as that solution remains out of reach, all our efforts at regional connectivity, integration, and prosperity will continue to be marked by a missing puzzle. Let us redouble our efforts to put that puzzle back in place,” she said.
She said that in August 2017, when thousands of Rohingya men, women, and children from Myanmar fled to Bangladesh, Bangladesh offered them temporary shelter.
“With an ever growing population, this has now become one of the largest humanitarian situations in the world,” she said.
Sheikh Hasina said that In the backdrop of ongoing armed conflicts in Myanmar, the Rohingya repatriation process is also getting delayed.
“This is creating serious security risks within and beyond our territories,” she said.
She called upon the Asia-Pacific region, especially ASEAN, to play a proactive role in resolving the volatile situation in Myanmar.
“We must ensure that the Rohingya can go back home in safety and dignity at the earliest possible,” she said.
The prime minister said that the Asia-Pacific region must stand united against its common enemies of poverty and hunger.
She said Bangladesh has reduced poverty from 41.51 percent to 18.7 percent between 2006 and 2022.
It also reduced extreme poverty from 25.1 to 5.6 percent during the same period.
“We remain confident about eradicating extreme poverty by 2030,” she said.
She mentioned that Bangladesh has made notable progress on food security, with focused interventions on maternal and child nutrition.
“Our current priority is to address inequalities through income distribution, asset ownership, and social protection,” she said.
The prime minister said that Asia-Pacific region must put up a united front in tackling the climate crisis, biodiversity loss, and transboundary pollution.
“We need to push for ambitious climate financing goals beyond 2025 at COP-29. We need to cooperate on cross-border water management and air quality improvement. We must all prepare for growing extreme weather events,” she said.
In this connection, she suggested looking into Bangladesh’s experience in disaster risk reduction.
“We appreciate UN-ESCAP’s support in improving our early warning capabilities,” she added.
Briefly describing various development programmes and achievements of her govebrment, the prime minister said that much of the development gains are affected by climate impacts.
“As a low-lying delta, Bangladesh has no option but to invest heavily in climate resilience,” she said.
She mentioned that Bangladesh is already recognised as a global leader in climate adaptation.
“We are happy to share our traditional and innovative solutions with other vulnerable countries,” she said.
She said that Bangladesh has urged developed and emerging economies in the region to raise their time-bound emission reduction targets.
“For economies in transition, it is important to have a just energy transition.”
In Bangladesh, she said, “we are working on long-term energy security with a sound mix of clean and renewable energy.”
“We shall continue to do our part in pursuing a circular and low-carbon economic growth pathway.”
She underscored the need for increased and easy access to financing and technology from both the public and private sectors.
“I invite UN-ESCAP to help build the capacity of climate-vulnerable countries to mobilise adequate international climate financing.”
PM Hasina said that Bangladesh now provides critical links to the Trans-Asian Highway and Railway networks.
“Our physical and digital infrastructures are being developed to foster regional trade and connectivity.”
She said Bangladesh offers access to the Bay of Bengal for land-locked territories in its neighbourhood.
“We stand ready to work together with all regional partners through mutual understanding and cooperation,” said the prime minister.
Bangladesh and Qatar signed 10 cooperation documents on Tuesday, including five agreements and five MoUs, aimed at strengthening ties and elevating relations to new heights.
Prime Minister Sheikh Hasina and Qatar’s Emir Sheikh Tamim bin Hamad Al Thani witnessed the signing of the documents.
The five agreements cover cooperation in the legal field, promotion and protection of mutual investments, avoidance of double taxation, maritime transport, and the establishment of a Joint Business Council (JBC) between FBCCI & QCCI.
The five MoUs include cooperation in sports and youth, manpower employment (Labour), diplomatic training, education, higher education, scientific research, and between Qatar Ports management Company “MAWANI QATAR” and Chittagong Ports Authority.
Earlier in the morning, PM Hasina warmly welcomed and received Emir Sheikh Tamim at her office.
They had a tête-à-tête meeting at the Prime Minister’s Office, followed by a bilateral meeting.
After signing the visitors’ book, the emir headed for Bangabhaban where the president received him.
A high-level Qatari delegation led by Qatar’s emir is on a state visit to Bangladesh at the invitation of the president and the prime minister.
During the ceremony, a road and a park in Dhaka were named after Emir of Qatar Sheikh Tamim Bin Hamad Al Thani.
The park, constructed in Kalshi area of Mirpur under Dhaka North City Corporation, and the road from Mirpur ECB point to Kalsi Fly Over were named after Emir of Qatar.
Now, the road and park are known as Sheikh Tamim Bin Hamad Al Thani Avenue and Sheikh Tamim Bin Hamad Al Thani Park.
The Federation of Bangladesh Chambers of Commerce and Industries (FBCCI) is urging for greater involvement of marginal, small, and medium enterprises in international trade fairs. This initiative aims to spotlight Bangladesh’s promising products on the global market.
FBCCI President Mahbubul Alam made the call during the first meeting of the organisation’s Standing Committee on National and International Trade Fairs and Foreign Delegations. He emphasised the need to provide marginal, small, and medium enterprises with the space and resources to effectively display their products at these events.
“The participation of marginal, small, and medium enterprises is crucial at both national and international levels,” Mahbubul Alam said. “This will allow us to export Bangladesh’s promising products and open new markets.”
The FBCCI president informed that his organisation is actively discussing and collaborating with the government to make this a reality. He also proposed organising roadshows in neighbouring countries and Europe to revive the country’s handicraft industry and increase export opportunities for these products.
Standing Committee Chairman Nuruzzaman echoed Mahbubul Alam’s sentiments, highlighting Bangladesh’s vast potential and young population. “We need to move beyond the garment sector and focus on product diversification and market creation,” Nuruzzaman said.
Achieving this, he acknowledged, will require close collaboration with the Export Promotion Bureau, Ministry of Foreign Affairs, and Bangladesh Investment Development Authority.
FBCCI Senior Vice President Md Amin Helaly pledged the organisation’s support in facilitating increased exports through participation in foreign trade fairs. He stressed, however, the importance of raising awareness among Bangladeshis about the country’s diverse and promising products.
The meeting concluded with an open discussion where participants expressed keen interest in organising and participating in various sectoral fairs, both domestically and internationally, under the FBCCI’s umbrella.
