Liz Truss, the former foreign secretary, has become the United Kingdom’s (UK) new Prime Minister, succeeding Boris Johnson. Throughout her political career, Truss has been compared to Margaret Thatcher, the Iron Lady, who is considered the benchmark for Conservative leaders. The new Prime Minister has taken the office at a time when her country and the whole world are facing critical challenges with economic uncertainties. After taking the office, Ms. Truss is looking to administer a dose of Reaganomics to bolster the British economy more widely. She has pledged to borrow to fund tax cuts, freeze the energy bills, slash EU regulation, and increase defence spending while seeking free-trade deals across the globe.
As the new British PM has taken her office, it has kicked up a fresh start and may open new opportunities for bilateral ties between the UK. and its partners around the world. Having a historic relationship with the United Kingdom, Bangladesh is also hoping to use this opportunity seeking to strengthen bilateral relations to bolster trade and investment.
Bangladesh has had special relations with the UK since its liberation War in 1971. The history of the Bangladesh-UK relationship is a testimony of partnership, fraternity, and deep understanding. The return of Bangabandhu to the soils of liberated Bangladesh on 10 January 1972 via London dawned great moments in Bangladesh-UK relations. Millions of Bengalis will never forget the warm-hearted welcome and earnest hospitality of the former British Prime Minister Edward Heath in receiving Bangabandhu at 10 Downing Street. Another unforgettable gesture was that the British Royal Air Force Comet Jet carried Bangabandhu home via Delhi on January 10 where his people were eagerly waiting for his return. The United Kingdom was among the first European countries to recognize Bangladesh as an independent state on 4 February 1972 which influenced other Commonwealth and European countries in recognizing Bangladesh. Since then, the two countries have enjoyed warm relations – deepening multidimensional cooperation – covering economic to security issues.
Partly based on their colonial links, Bangladesh has a thriving diaspora community in the UK. It is estimated that around 0.7 million Bangladesh diasporas are living in the UK as a vital connector in the growing economic, political, and social relations. People in Bangladesh show great enthusiasm about the representation of the Bangladesh diaspora in British politics. Currently, there are around 100 British Bangladeshi councillors and 4 Members of Parliament (MPs) in the UK. The community operates over 10,000 Bangladeshi restaurants, worth a yearly turnover of £4.5 billion. With the growing number of diasporas, the UK is one of the leading sources of remittance for Bangladesh. In 2021, the UK was ranked 4th largest source of Bangladesh’s remittance. The UK government has been showing a great understanding of Bangladesh’s challenge with more than 1.2 million Rohingyas forced to flee from Myanmar in the face of genocide. It has remained highly proactive about the repatriation of the Rohingyas to Myanmar as a durable solution to the crisis.
With such a strong foundation and growing expansion of bilateral partnerships over the past decade, Bangladesh and the UK have created immense prospects for trade and investment. With the presence of more than 200 British companies, the UK is the second biggest investor in Bangladesh. The total cumulative investment of the UK is USD 2.5 billion. In addition, the UK is the third single largest market destination for Bangladesh after the United States and Germany. Currently, the two-way trade exceeds US$ 4 billion. The UK is also a major donor to Bangladesh for decades. The cumulative development assistance of the UK amounts to more than 3 billion British pounds. During the recent bilateral meetings, the UK re-emphasized its commitment to support Bangladesh in achieving smooth and successful graduation and continuing its export-led growth by providing duty-free, quota-free access to the UK market until 2029.
The UK-Bangladesh Trade and Investment Dialogue was held for the first time on 16 February 2021. During the Dialogue, both countries discussed a range of issues such as GSP, LDC Graduation, investment cooperation, access of Bangladeshi professionals to UK service sectors, trade facilitation, ease of doing business, financial sector development, higher education provision, taxation issues and intellectual property protection. Beyond manufacturing, UK investors can explore Bangladesh’s growing service industry, health and health tech, education and EdTech, FinTech and infrastructure which are highly promising sectors. For instance, higher education in Bangladesh is another key area where British universities are keen to invest.
The UK government has launched a new scheme called the UK Developing Countries Trading Scheme (DCTS) that provides a major opportunity to grow free and fair trade with developing nations like Bangladesh. This new UK scheme will offer more opportunity and less bureaucracy for developing countries, by simplifying rules of origin requirements or reducing tariffs on imports. The post-Brexit UK has been shaping its trade and investment relations in a different way by taking a more liberal, pro-trade approach that leads to growth and opportunity. Many experts suggest that both countries should sign a free trade agreement (FTA) to bolster bilateral trade. In their opinion, the time has come to sign an FTA with the UK so that Bangladesh can take full advantage of any potential business deals when Britain exits the EU trade bloc at the end of 2022.
In the defence and security arena, both Bangladesh and UK have charted a ground-breaking initiative of strategic dialogue. Starting in 2017, the two countries held the fourth Strategic Dialogue on 9 September 2021 in London, UK that embraced the entire gamut of bilateral relations between Bangladesh and the UK, covering political and diplomatic relations, global and regional issues, economic and development partnerships, and security and defence. The first UK-Bangladesh Defence Dialogue was held in March 2022 as another magnificent forum to reflect on the growing bilateral defence relationship, established at the time of Bangladesh’s independence over 50 years ago, which should be developed in preparation for the next 50 years of bilateral relations. During her visit to London in 2021, Prime Minister Sheikh Hasina, discussed the issue of defence cooperation, aiming to fulfil the increased demand of Bangladesh for defence purchases in line with the implementation of Forces Goals 2030. Notably, Bangladesh has decided to buy five naval ships from the UK to protect its long sea frontier at the Bay of Bengal. Moreover, the expansion of economic partnership is expected to further deepen diplomatic and strategic cooperation between the two nations.
As the new British Prime Minister is set to address the looming economic challenges of her country, she may seek renewed bilateral ties and free-trade deals around the globe as she is a free trade ideologue. In this scenario, Bangladesh – a tiger economy of South Asia offers promising prospects for the new British government to bolster its economic and defence ties. While Bangladesh’s continuing high economic growth, empowerment of social sectors and political stability, along with the innovative and enterprising youth is leading the country towards sustainable socio-economic development, the United Kingdom can offer a strong partnership. Such partnership will be beneficial for Bangladesh also in fulfilling the ‘Vision 2041’ of transforming the country into a developed nation, i.e., Sonar Bangla (Golden Bengal).
Doreen Chowdhury is a doctoral researcher at the University of Groningen