With the aim of increasing bilateral trade and mutual economic cooperation, special attention must be paid to the ‘Middle East’. Bangladesh seeks cooperation in at least 12 sectors from the top ten countries of the Arab world or the Middle East to overcome the ongoing power and energy crisis, the impact of the Russia-Ukraine war and the financial loss of the covid-19 epidemic. One of these is the power and energy sector.
Maximum emphasis has been placed on easy terms of investment and energy imports from the Middle East in this sector. In addition to this, the government is interested in new manpower exports to collect remittances, one of the sources of foreign exchange as well as product exports. A meeting of Bangladesh-Saudi Arabia Joint Commission (JC) has been called in Riyadh, by the end of this month.
Looking ahead to that meeting, Saudi Arabia wants to know what kind of cooperation Bangladesh wants to increase bilateral trade. The Economic Relations Department will present an outline of economic cooperation and investment at the meeting itself.
It is known that assistance will be sought from the Middle East to resolve the ongoing power and energy crisis. Its biggest impact is noticeable in inflation. Also, the majority of remittances come from Middle Eastern countries. Due to this, the stakeholders have urged increasing mutual economic cooperation and bilateral trade with the Middle East. More than 80 percent of Bangladesh’s fuel oil is imported from the Middle East, including Saudi Arabia.
Similarly, most remittances come from exporting unskilled manpower to Middle Eastern countries. Most of the fertilisers used in agricultural production are imported from the Middle East. But Inflation is increasing pressure on Bangladesh
The dollar crisis and the fuel price increases are making it difficult to maintain continuity of production. Initiatives have been taken to increase mutual cooperation with Middle East countries to overcome the current situation. Bangladesh is dreaming of developing economic relations with the Middle East.
Bangladesh will be represented the JC meeting by the Economic Relations Department of the Finance Ministry. Before attending the meeting, ERD held several inter-ministerial meetings.
In these meetings, economic relations with the whole Middle East, including Saudi Arabia, were urged strengthened and bilateral trade increased. Besides, cooperation in 12 sectors will be sought from the Middle East. These include development of bilateral economic and trade relations, manpower, employment and consular, private aviation, tourism and cultural, investment, Abu Dhabi Development Fund, electricity, energy and mineral resources, information and communication technology sector, education, science and technology sector, marine environment, as well as Cooperation in development, agriculture, healthcare and health education sectors and humanitarian and charitable assistance.
Meanwhile, 20 more Saudi Arabian companies have shown interest in investing in Bangladesh, said Foreign Minister Dr. AK Abdul Momen recently. After a recent meeting with a delegation of Saudi Arabia, he added, “We will give them all the facilities they need.” Both countries have much more to do in terms of trade and investment cooperation.
Saudi Arabia has already expressed its positive attitude towards increasing cooperation with Bangladesh. Bangladesh and Saudi Arabia has signed several agreements to increase bilateral trade and investment. In addition, bilateral trade and economic cooperation with Saudi Arabia will be increased with the UAE, Qatar, Bahrain, Oman, Iraq, Kuwait, Lebanon, Egypt and Turkey.
The Commercial Counsellors in Bangladesh Embassies in their countries have already written letters about increasing bilateral trade and manpower export. Besides, the government has taken a special initiative from the ERD. An outline of this will also be presented to Saudi Arabia.
Saudi Arabia has already been informed about ensuring one-stop service. ERD believes that if mutual economic cooperation with Saudi Arabia, the top country of the Arab world, increases, bilateral trade with other Middle Eastern countries will also increase.
And for this reason, preparations are being made vigorously before the meeting. Finance Minister AHM Mustafa Kamal said that currently there is an excellent environment for investment in Bangladesh. There is considerable potential for investment on Public-Private Partnership (PPP) basis, particularly in major infrastructure, information technology, communication, agriculture, power and energy, medical sectors.
Middle Eastern entrepreneurs including Saudi Arabia can take investment opportunities in those sectors if they wish. Middle Eastern countries can take huge manpower from Bangladesh if they want. He said that the country’s electricity and energy sector needs investment and cooperation from the Middle East, including Saudi Arabia.
According to Bangladesh Petroleum Corporation data, the country consumes 6.5 million tons of fuel oil annually. Of that, 4 million tons of diesel is imported annually. More than 90 percent of vehicles in the transport sector in the country, and 34 percent of the power generation, are dependent on fuel oil.
For this, Bangladesh depends on Saudi Arabia and the Middle East. Bangladesh imports refined and crude fuel oil.
Apart from this, BPC also buys fuel oil through open tender. In other words, more than 80 percent of fuel oil is imported from Middle Eastern countries, including Saudi Arabia. Earlier in 2019, two agreements and four memorandums of understanding were signed with Saudi Arabia for the development of various sectors of Bangladesh, including the power and industrial sectors, the PM’s presence.
If these agreements are implemented, the country’s bilateral trade and investment with Bangladesh will increase. Both countries will benefit economically. Especially the ongoing crisis in the power and energy sector of the country will be removed. Besides, bilateral trade with Saudi Arabia also has great opportunities and possibilities.
In addition, Saudi Arabia’s state-owned oil company Aramco has already shown interest in building, operating and maintaining an oil refinery, costing $1.5-2 billion. Saudi firm Engineering Dimension LLC is very enthusiastic about investing in Bangladesh.
The company pledged investing $16585 billion in seven projects during the International Investment Conference in Dhaka last November. Itis one of the companies that have shown interest in the construction of Dhaka East-West Elevated Expressway. Some Saudi investments are already in the pipeline. These include the development of Patenga Container Terminal with Red Sea Gateway Terminal in Public Private Partnership. Further Saudi investment will largely depend on how successfully the projects in the pipeline can be managed.
ACWA Power, an internationally renowned energy company, has expressed interest in investing around $600 million to build a 730 MW combined cycle power plant in Chittagong. Al-Fanar plans to invest $100 million to build a 100 MW IPP solar project in a joint venture. Al-Bawani is interested in investing about $10 million in the employment of skilled human resources for construction and engineering projects.
Preparations for the 14th meeting of the Bangladesh-Saudi Arabia Joint Commission have started in full swing. The Economic Relations Department (ERD) of the Ministry of Finance prepared the working paper on behalf of Bangladesh. In the meeting in Riyadh, the cooperation of Saudi Arabia will be sought in the export of electricity, manpower, increasing the export of manufactured goods, export of halal products, especially fish and meat, export of agricultural processed products and fertilizer production.
Besides, Bangladesh has the opportunity to export clothes to other Middle East countries including Saudi Arabia. The entrepreneurs of the country’s garment sector have expressed their interest in this regard. Saudi Arabia will be requested to speedily implement the agreements made with Saudi Arabia at various times.
Bangladesh has several bilateral trade investment agreements with Saudi Arabia. These agreements must be implemented now. It is reported that talks are going on between Petrobangla and Aramco regarding a liquefied natural gas (LNG) deal. This will solve the country’s LNG crisis. Besides, Eastern Refinery Unit-2 has sought Saudi Arabia’s cooperation in processing three million tons of crude palm oil per day.
If it is implemented, 68,000 barrels of refined petroleum will be available. MoU will be signed between Bangladesh Power Development Board and world renowned ACWO Power. It is expected to make great progress in the renewable energy sector in the country. It has an agreement with Saudi Arabia to build a 100 MW Solar Independent Power Plant (IPP) and manufacture transformers and electrical components.
These agreements need to be implemented quickly. Meanwhile, 20 more Saudi Arabian companies have shown interest in investing in Bangladesh, said Foreign Minister Dr. AK Abdul Momen recently. After a recent meeting with a delegation of Saudi Arabia, he added, “We will give them all the facilities they need.” Both countries have much more to do in terms of trade and investment cooperation.
Besides, Bangladesh is also interested in investment on the basis of public-private partnership or PPP. Saudi Arabia will mainly invest in Bangladesh’s infrastructure, medical, tourism and other sectors. A memorandum of understanding has been signed with Saudi Arabia. Salman F Rahman, Adviser to the Prime Minister on Private Industry and Investment on behalf of Bangladesh, signed one such MoU a few months ago. However, countries of the Middle east especially Saudi Arabia’s investment in the power and energy sector is urgently needed at the moment.