Boosting business with Bangladesh

The reactivation of the Sri Lanka-Bangladesh Joint Economic Commission after about a decade of inaction is indeed a good move for many reasons. Bangladesh is a member of SAARC and politically a friend of Sri Lanka.
At a time when international organisations and economists keep on stressing on the need to look at the regional markets more closely than in the past, in order to reduce the dependency on developed markets which have caused and are still suffering from the fallout of the global economic crisis, revival of this Joint Economic Commission is opportune.

Although officially Bangladesh is categorised as a Least Developed Country, one needs to look at the potential the country offers. The very fact that Sri Lanka’s exports to Bangladesh have increased by about 150% between 2006 and 2010 is an indication of a growing market, partly due to the growing middle class and a growing affluent segment of the society. As such the demand for consumer goods keeps growing.
Bangladesh has a population of around 160 million of which about 11 million live in the capital-Dhaka. Bangladesh like Pakistan and India, her neighbours, has witnessed an expanding young population with more education and more sophisticated needs. According to Wikipedia, this expansion is the world’s fifty fourth largest, just below Singapore and Vietnam.
In December 2005, four years after its report on the emerging BRIC economies, Goldman Sachs named Bangladesh as one of the Next Eleven together with Egypt, Indonesia, Vietnam and seven other countries. In April 2010,Standard & Poor gave Bangladesh a credit rating of BB- for long term which although is below India, is above Pakistan and Sri Lanka in the region.
Although its per capita income was around $ 641 in 2010, its purchasing Power Parity (PPP) in 2011 was $ 1,700. GDP hovers around 6% and she is one of the world’s largest producers of rice, potato, etc. According to the IMF, its economy is the 44th largest in the world. Despite its labour and other problems, the country has attracted and continues to attract foreign direct investment.
The Bangladesh Government is reported to be planning the construction of the largest deep sea port in South Asia, which when completed would enable the country to service the entire region as a maritime transport and logistics hub. This would enable foreign investors to take advantage of the strategic location and her status as LDC which allows goods manufactured in Bangladesh duty free entry into many developed markets.
Asia’s largest airport is also to be built in the capital city – Dhaka. Dhaka with its population of around 11 million offers Sri Lankan exporters a valuable market which some exporters have already penetrated.
Bangladesh may be officially termed a Least Developed Country, but one has only to look around Dhaka to ascertain whether it really fits in to that description. While that description may fit the picture outside Dhaka, the capital alone is made up of an extremely sophisticated consumer base.
The revival of the JEC should give bilateral trade a boost in that it has created an opportunity to take a fresh look at each other and the opportunities that would be available for both countries. If this meeting is followed up by exchange of regular trade delegations, participation in each others’ trade fairs, etc., definitely there would be immense opportunities for the Sri Lankan business community.
There would be initial problems for newcomers as it is a comparatively unknown market, but the reactivated JEC should be a platform to solve such issues. Although both countries are members of SAARC and signatories to SAFTA, no harm will be done in exploring the bilateral way of expanding trade and investment.

(Manel de Silva holds an Honours Degree in Political Science from the University of Ceylon, Peradeniya and has engaged in professional training in Commercial Diplomacy at ITC and GATT. She has served as a trade diplomat in several Sri Lankan Missions overseas and was the first female Head of the Department of Commerce as Director General of Commerce.)