Within Australia, Bangladesh is perceived as an aid-dependent, impoverished country which is subjected repeatedly to natural and human induced disasters, like cyclones, floods, and building collapses due poor building standards, it said.
In reality, however, the country has made impressive strides in its development journey, and that image is in need of a refresh, according to the article.
Bangladesh recorded nearly 6 per cent annual GDP growth from 2000-2019 and officially registered a 3.5 per cent growth rate in the Covid-19 ravaged 2020, raising the country’s GDP to almost $320 billion.
In pre-Covid-19 2019, the economy grew by eight per cent. A GDP per capita of around $2,000 – for a population of around 160 million people – means that the country is set to move out of Least Developed Country status in the next few years.
Indeed, Bangladesh could be described as the least known, fastest growing economy in Asia, reads the article.
In recent months it has overtaken India’s per capita income and even provided foreign exchange assistance to Sri Lanka, it said.
In terms of recent growth rates and the size of its economy, Bangladesh has many similarities with Vietnam, a country which receives a lot more attention in Australia.
The conclusion of the Australia-Bangladesh Trade and Investment Framework Arrangement (TIFA) on 15 September is therefore timely and could provide the necessary boost towards a more significant economic relationship, it said.
While TIFAs are seen as mostly symbolic and replete with good intentions, they do signal an injection of commitment and ambition.
TIFAs do not guarantee trade and investment growth, but there are examples where instruments like TIFAs have presaged the building of more expansive economic ties between countries.
An example is the US-Bangladesh Trade and Investment Cooperation Forum Agreement which was signed in 2013; by 2019 bilateral trade in goods between the two countries had increased by close to 50 per cent.
In this specific case, the TIFA also highlights that Australia’s opportunity scope in South Asia goes beyond India.
The current bilateral trade relationship is modest.
The Department of Foreign Affairs and Trade’s latest figures show that Bangladesh is Australia’s 30th-largest partner, with two-way trade amounting to about $2 billion.
Almost half of that relates to Australian imports of textiles and clothing and exports of cotton.
Starting from that low base and combined with Bangladesh’s good prospects for a post-Covid-19 recovery, there should be room for growth.
Bangladesh’s large, young, increasingly urbanised population and growing middle class should interest a range of Australian exporters and investors.
One substantial opportunity is liquefied natural gas (LNG). Bangladesh’s supply of inexpensive domestic gas contributed to its development success.
As this depleted, Bangladesh quickly turned to LNG imports, starting in mid-2018 and growing to four million tons per annum in 2020.
Forecasters are expecting LNG imports to grow to twenty million tons per annum by 2030, a fivefold increase in less than a decade.
Australia was the world’s largest LNG exporter in 2020, just ahead of Qatar.
Australia’s LNG production facilities in the north of the country are among the closest to Bangladesh’s already functioning and planned LNG import facilities.
On paper, Australia should be able to be a competitive supplier to the country due to lower shipping costs.
To date, Bangladesh’s long term LNG contracts have been concluded under so called “Government to Government” arrangements, namely with Qatar and Oman.
The TIFA could provide an avenue through which the prospects for a sustained LNG trading relationship could be developed, including by the two governments, ensuring that Australian LNG producers are able to compete on an equal footing.
Bangladesh understands the need to both attract new investment and diversify its economy in order to lessen its dependence on the ready-made garment sector, remittances from its large diaspora, and some light manufacturing.
The country has been increasingly active in looking at how it can attract the necessary investment, both to help in this diversification push and to modernise its infrastructure.
Australian investors, especially those with an appetite for – and experience in – investing in Asian infrastructure, should take note.
Australia’s ever-growing challenges with China have led political leaders to stress the need for more trade diversity.
Bangladesh should feature strongly in the list of countries which can potentially provide that additional bandwidth.