Boosting Dhaka-Seoul bilateral trade and investment

Though South Korea, a leading industrial powerhouse of Asia, has been a development partner of Bangladesh for around five decades, the volume of bilateral trade and investment between the two nations cannot be said to have grown to the expected level so far. Thankfully, the issue of enhancing economic cooperation between the two countries took the centre stage at the discussions at a recent seminar held in the capital to celebrate the 50th anniversary of the establishment of diplomatic relations between the two countries. Considering that investment from Korean private sector in Bangladesh's Readymade Garment (RMG) sector started since late 1970s and that, later, the first-ever export processing zone by a Korean private sector company was established in Chattogram, there is obviously immense potential for the growth of Korean investment in Bangladesh. The bilateral trade between South Korea and Bangladesh was worth US$3.0 billion in 2022 and it was heavily tilted towards South Korea. So, efforts should be redoubled to reduce the trade gap and explore ways to take the existing level of cooperation in the area of bilateral trade and investment to new heights.

Korea's foreign direct investment in Bangladesh amounts to US$1.43 billion and most part of it has gone to the apparel sector. In fact, 80 per cent of Korean investment so far has been made in the RMG sector. Even so, the good news is, diversification of investment in other areas including infrastructure, ICT and automobiles has also started. Especially, in the infrastructure development sector, some 110 Korean companies have reportedly been engaged in 200 projects with a total value of U$8.0 billion so far. Also, joint partnership of local companies with Korean conglomerates in the ICT and automobiles sector is learnt to be growing. So far so good. But the fact that Bangladesh's graduation from its LDC status is just round the corner, in 2026 to be precise, the case for further boosting the growth of bilateral trade and investment need not be overemphasised. In its post-graduation phase, Bangladesh will be required to make up for the loss of preferential trade facilities with advanced economies. So, it will be vital for Bangladesh to have continued preferential, duty-free access of Bangladeshi products to the Korean market until bilateral agreement to this effect is reached between the two countries. In this connection, both countries would do well to build a comprehensive strategic partnership to increase collaborative ventures between them.

Notably, ventures under consideration through public-private partnership (PPP) like the Meghna Bridge project on Bhulta-Araihazar-Bancharampur Road and the one for treating water of Meghna river for supplying to the Bangabandhu Sheikh Mujib Shilpa Nagar (BSMSN) being built in the Mirsharai upazila of Chattogram, if materialised finally, would, hopefully, give further boost to investment from the Korean private sector in Bangladesh. Reassuringly, the leaders of Bangladesh government, the Korean envoy in Bangladesh as well as experts in the field of Korean trade and investment stressed more vigorous growth of Korea-Bangladesh bilateral trade and investment beyond 2026.

While adding momentum to bilateral trade and investment, ways should also be explored to increase export of Bangladeshi manpower to Korea, which is expected to reach 10,000 workers this year. The government should push for easing visa and other formalities coming in the way of effectively exploiting the enormous potential of this sector between the two countries. In fine, Bangladesh has a lot to learn from Korea's phenomenal rise to a highly advanced economy from a modest agricultural background in a matter of a few decades. The need is to start the process of sharing the experience in earnest.