Bangladesh is a country that has made significant progress in terms of innovation and digital transformation in recent years. With that, the Commonwealth Trade and Investment Forum was held in Bangladesh, and it was the first time that the Commonwealth business community gathered in Bangladesh. The forum also contributed to strengthening bilateral and multilateral relations between Bangladesh and the Commonwealth.
The Commonwealth Trade and Investment Forum (CTIF) was a two-day event that took place in Dhaka, Bangladesh, on September 13–14, 2023. The forum was organized by the Commonwealth Enterprise and Investment Council (CWEIC) in partnership with the Government of Bangladesh. The forum aimed to foster partnerships, promote innovation, and explore avenues for sustainable and inclusive economic development for Bangladesh and the Commonwealth. Sheikh Hasina, the Prime Minister of Bangladesh, opened the forum by highlighting the nation’s accomplishments and potential as a trade and investment destination. She also emphasized the importance of the Commonwealth as a platform for cooperation and collaboration among its 54 member states.
Over 500 delegates from more than 30 Commonwealth nations attended the forum, including heads of state, ministers, ambassadors, CEOs, business owners, investors, and experts. The forum provided a unique opportunity for networking, knowledge sharing, and business matchmaking among the participants. The forum featured several sessions and panel discussions on topics such as trade facilitation, digital transformation, the green economy, women’s empowerment, health and education, infrastructure and connectivity, and regional integration. The forum also showcased both Bangladeshi and Commonwealth-wide opportunities to a global audience of business and government leaders.
Currently, Bangladesh is ranked 50th out of 131 countries in the Global Innovation Index 2020, which measures the innovation performance of countries based on 80 indicators. Bangladesh improved its rank by eight places in 2019 and is now the second-highest among lower-middle-income countries. Bangladesh is ranked 120th out of 193 countries in the UN E-Government Development Index 2020, which assesses the digital transformation of public services and government operations. Bangladesh improved its rank by five places in 2018 and is now the third-highest among South Asian countries.
Also, Bangladesh is ranked 116th out of 180 countries in the ITU ICT Development Index 2017, which measures the level of ICT access, use, and skills. Bangladesh improved its rank by one place in 2016 and is now the fourth-highest among the South Asian countries. These rankings show that Bangladesh has made remarkable strides in innovation and digital transformation, but they also indicate that there is still room for improvement. Also, Bangladesh needs to continue investing in ICT infrastructure, human capital, research and development, and digital governance to achieve its vision of becoming a developed and prosperous nation by 2041.
The government of Bangladesh is offering a range of investment incentives under its industrial policy and export-oriented growth strategy, with few formal distinctions between foreign and domestic private investors. It provides various fiscal incentives, such as tax cuts, duty exemptions, accelerated depreciation, and reduced VAT rates, for foreign investors in certain sectors and regions. The country has further improved the business environment by simplifying the regulatory procedures, reducing the cost of doing business, enhancing the infrastructure and connectivity, and strengthening the legal and institutional framework for investment protection.
So, holding this forum is important for the economy of Bangladesh for several reasons. The forum can help Bangladesh attract more foreign investment and trade partners from the Commonwealth, which is a voluntary association of 56 countries with a combined GDP of $11.5 trillion and a population of 2.4 billion. Bangladesh can benefit from the Commonwealth advantage, which is the lower cost and higher ease of doing business among Commonwealth countries due to shared history, language, legal systems, and values. The forum can also help Bangladesh diversify its export basket beyond the RMG sector, which accounts for more than 80% of its total exports. By showcasing the potential and opportunities in other sectors, such as pharmaceuticals, leather, jute, IT, and agro-processing, Bangladesh can reduce its dependence on RMG and increase its resilience to external shocks.
The forum has showcased both Bangladeshi and Commonwealth-wide opportunities to a global audience of business and government leaders, attracting potential investors and partners for Bangladesh. The forum highlighted the achievements and potential of Bangladesh as a trade and investment destination, as well as the challenges and opportunities for sustainable and inclusive economic development for Bangladesh and the Commonwealth. The forum assisted Bangladesh in improving its productivity and technology adoption in the manufacturing sector, which are crucial for enhancing its competitiveness and sustaining its growth. By facilitating knowledge sharing, innovation, and collaboration among firms, the forum can enable Bangladesh to learn from the best practices and experiences of other Commonwealth countries. The forum has helped Bangladesh address some of the challenges that it faces in graduating from LDC status, such as losing preferential market access, concessional financing, and technical assistance from the international community.
By strengthening its bilateral and multilateral relations with the Commonwealth countries, Bangladesh can seek alternative sources of support and cooperation for its smooth transition. The forum can also help Bangladesh advance its social and environmental goals, such as reducing poverty and inequality, improving health and education, empowering women and youth, and combating climate change. By aligning its development agenda with the Commonwealth Charter and the Sustainable Development Goals (SDGs), Bangladesh can leverage the collective resources and expertise of the Commonwealth to achieve these goals.
However, Bangladesh faces challenges in attracting foreign investment. Exports that are not sufficiently diversified and highly dependent on the textile sector This makes the country vulnerable to external shocks, such as changes in global demand, prices, and preferences, as well as competition from other low-cost producers. Bangladesh needs to reduce its dependence on RMG and increase its resilience.
Bangladesh’s financial sector is in the early development phase and faces various challenges, such as low penetration, high-interest rates, high non-performing loans, weakness, and a lack of innovation. The availability and affordability of credit for both domestic and foreign investors are limited, especially for small and medium enterprises (SMEs), which face difficulties in obtaining collateral, meeting documentation requirements, and dealing with lengthy procedures. While graduating from the LDC, Bangladesh will be losing some of the benefits and privileges that it enjoys as an LDC. These include duty-free and quota-free access to some major markets, preferential treatment in trade negotiations, lower interest rates and longer repayment periods for loans from multilateral institutions, and more generous development assistance from donors.
In conclusion, Bangladesh needs to improve its financial sector by enhancing its efficiency, stability, inclusiveness, and competitiveness. Further, Bangladesh needs to prepare for the transition by strengthening its trade competitiveness, enhancing its domestic resource mobilization, diversifying its sources of finance, and building its capacity to cope with shocks.