A silent revolution sweeping Bangladesh : EU envoy

Bangladesh's relations with the European Union (EU) date back to 1973. And the EU is Bangladesh's single largest trading partner, with more than half the country's merchandise shipment destined to the market of 28-member regional grouping. The head of the EU delegation to Bangladesh Pierre Mayaudon has sat with The Financial Express (FE) recently and spoken on a range of issues, notably the creation of EU Business Council in Bangladesh, the business environment and trade barriers. Below are the full excerpts of the interview:
FE: What's the objective of creating an EU Business Council in Bangladesh?
Pierre Mayaudon: First of all, let me thank the FE for giving me the opportunity to share with your readers some comments on the creation of the EU Business Council Bangladesh (EUBCB).
EU Business Councils, under various denominations, already exist in many countries. They are meant to mobilise the local EU capacities in support of common purposes in the economic sector.
Time had come to establish such an entity also in Bangladesh to take stock of the progress achieved by the local economy. The relation, which had been long driven by exports only now, has got to be considered through the broader prism of trade and investment.
This demarche is consistent with Bangladesh's objective of becoming a middle income country by 2021. The steady growth of the economy, reflected by a 6.0 per cent plus GDP growth over the last ten years has transformed this country.
Bangladesh is now designated by investment bank Goldman Sachs as one of the "Next eleven" most promising economies of the 21st century. What we are witnessing here is nothing less than what I would call a silent revolution.
We take pride in the EU, as a single market of 28 countries, being the leading trade partner of Bangladesh but we would like this status to translate into a global economic reality whereas it now mostly reflects the overwhelming predominance of exports to the EU (11.8 billion euros) when the exports to Bangladesh are still in the infancy (1.7 billion euros). To a large extent this is the result of the GSP or EBA regime that allows all Bangladeshi products to enter the EU market "duty free-quota free".
To take the bilateral economic relation forward, we have to properly identify the obstacles that still hamper the development of our trade and investment relations, to document them and address them with the relevant Bangladeshi stakeholders, starting with the Government.
The EU Business Council will provide us with the necessary insights to achieve this goal in a win-win approach.
FE: What are the main obstacles to doing business in Bangladesh?  
Pierre Mayaudon: They obviously come in various shapes and sizes; some are more a matter of image and perception while others reflect real difficulties of a very practical nature.
The perception of the country is obviously a key element. The world coverage of the Rana Plaza tragedy had cast a devastating image but the joint efforts undertaken since then through the "sustainability compact" where the EU is an active player have created a much better perspective. It is about time that the EU-based businesses consider Bangladesh for what it is in 2015, not what it was 10 or 15 years ago. World major economic powers like China and Japan have already done that and are making Bangladesh the pivot of such regional initiatives as the Maritime Silk Road, the BCIM-EC or the BIG-B. In Europe too, people have to urgently revisit their prejudices and properly apprehend Bangladesh's multiple assets. But of course it is also up to the local stakeholders to create an environment that will be more conducive to foreign trade and investment.
In this sense, the Business Council will provide us with accurate indications on the kind of difficulties the European companies are facing in Bangladesh. At this very early stage I could say that they come both in terms of tariff and non-tariff barriers. Tariff barriers, starting with high import duties on certain products, reflect a legal set-up inspired by a clear protectionist mindset. We have to engage with the government on making this regime evolve. There are also non-tariff barriers of various sorts. Surprisingly business people occasionally face difficulties in getting visas and work permits. The laws and regulations are sometimes confusing or their implementation subject to the diverging interpretations of respective ministries depending on their priority agendas.
Still, by and large, I would say that the creation of the EU Business Council Bangladesh shows that we are optimistic regarding the chances of seeing these obstacles being overcome. I would portray it as a vote of confidence towards the future of the Bangladeshi economy and the role the EU and the EU-based businesses can play in contributing to this better future.
FE: Is the EU Business Council going to focus on certain priority economic areas?
Pierre Mayaudon: This question allows me to clarify the respective roles of the EU Business Council Bangladesh and of the bilateral Chambers of Commerce that some of the EU Member States have established here.
There is a clear division of roles in the sense that the treaties establishing the European Union have given the EU an exclusive competence on Trade Policy matters. Trade promotion is not in our role. Therefore, there will be no competition between the bilateral chambers and the EUBCB. We rather see the relation in terms of complementarity. These bilateral have identified some cross-cutting issues and common challenges. All believe that they will be better addressed, with a highest chance of progress, if they are dealt with at the EU level.
This being said, we have to consider where the priorities in terms of diversification of the Bangladeshi industry are. They will offer opportunities to the EU businesses and our advocacy role in creating a more conducive environment should be more intense in these specific areas. We have noted the attention paid by the Government of Bangladesh towards such key sectors as the pharmaceutical industry, shipbuilding, IT and leather products. In general, the whole concept of Blue Economy looks extremely promising since the EU, its member states and its companies have developed a huge expertise in this area.
In this perspective the EUBCB and the bilateral Chambers of Commerce are well set to complement each other. Be it as it may, I am confident that the EU Business Council Bangladesh, in its scope of action, can make a difference. However the final outcome will also very much depend on the evolution of the overall situation in Bangladesh. Investors, domestic and international alike, want stability to prevail. They are not different from ordinary citizens who all aspire to peace.
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