Bangladesh needs robust diplomacy to face shifting global dynamics

The world is going through an era marked by shifting global dynamics, geo-economic challenges and new realignments. Added to this is the new tariff policies of the United States. And Bangladesh faces the headwinds of trade complexities and changing international relations.

These observations were made at a roundtable, 'Navigating Geo-economic Challenges in a Complex World: Options for Bangladesh,' held yesterday at a hotel in the capital. Organised by Bangladesh Institute of International and Security Studies (BIPSS), the roundtable was addressed by eminent experts Dr Fahmida Khatun, Dr Anwara Begum and Parvez Karim Abbasi. President of BIPSS, Maj Gen ANM Muniruzzaman (retd) moderated the discussion.

Addressing the prevailing concern over the recent reciprocal tariff announced by the US, Dr Fahimida Khatun, executive director of the Centre for Policy Dialogue (CPD), said there has been a lot of talk in this regard after the tariff was declared by the US administration.  The US had given a 90-day reprieve, but what will happen after that, she asked.

Trade is the lifeline of any economy, said Fahmida Khatun, pointing out how Bangladesh had graduated from an aid-dependent economy to a trade-dependent economy. Following the US announcement, the Bangladesh government had sent a letter to the US government. It was now to be seen how Bangladesh will strategise and work together for a win-win situation.

The worrisome matter, she continued, is that US is the major destination country of Bangladesh export. As it is, Bangladesh lost duty-free access there for readymade garments due to labour rights and safety issues including the Rana Plaza incident.

On a positive note, the CPD executive director said, this reciprocal tariff announcement was an eye-opener, a wake-up call. Bangladesh needed to look into its tariff structure and rationalise it because trade was all about competitiveness. She recommended that Bangladesh look into various possibilities of Free Trade Agreements (FTA), Regional Economic Comprehensive Partnerships (RCEP) and such. Unless concrete measures were taken, uncertainty would prevail, and uncertainty is not good for any business.

Dr Anwara Begum, research director, Bangladesh Institute of Development Studies (BIDS), said that in an era marked by shifting global power dynamics, technology and realignments, Bangladesh must adeptly navigate to sustain its growth and stability.

Pointing to the weakening role of international financial institutions (IFI), she said these institutions tended to be less capable than before. They had reduced funding capacity. There were also new competitors entering the global arena. There was competition from China's Belt and Road Initiative (BRI), BRICS and so on.

In wake of various such developments, Bangladesh had stalled many of its projects. It would have to look for alternative partners, possibilities including China, Japan and India. She said that Bangladesh may be able to sustain its development trajectory, but it must seek FDI and also reduce dependence on aid.

Blue economy was an area that needed to be explored further, said Dr Anwara Begum, saying this would encompass sustainable marine resource utilisation. She mentioned various blue economy marine components and resources like seaweed, pearl culture, cosmetics, pharmaceuticals, tourism and more. Marine-based industries meant revenue, jobs, wealth and also equitable wealth distribution for women and youth. She also highlighted the issue of migration and the challenges involved.

Parvez Karim Abbasi, assistant professor of economics at East West University, saw this second term of the US president Donald Trump, or "Trump 2.0", as a continuation of "Trump 1.0" There was an effort to contain China's manufacturing prowess. It brought forward several challenges and regulatory fragmentation.

Speaking about Bangladesh's way ahead in such circumstances, Parvez Abbasi pointed out that despite much being said in the past about Bangladesh's digital advancements, in actuality Bangladesh had extremely poor digital security. The Bangladesh Bank cyber heist was an example of this. Bangladesh was also increasing its reliance on Chinese technology. There was the question as to what impact this would have on the policies of US in particular and the West as a whole.

We have a global system that is in perpetual flux, said the East West professor, adding that Bangladesh had no tangible measures to deal with this flux. "Our FDI is the lowest in five years," he pointed out, as a case in hand.

Speaking of developments in the area of geo-economics, Parvez Karim Abbasi said that the recent visits of US president Trump to Saudi Arabia, the United Arab Emirate and Qatar were significant. The leaders of these three countries made commitments of huge investments in the US. There was even a normalisation of US ties with Syria. Bangladesh could sit up and take note because all this would mean that Saudi Arabia, UAE and Qatar would perhaps have greater say in US policy.

Abbasi then spoke of rare earth minerals such as lithium, titanium and so on, of which China had 60 to 70 per cent of global production and had now imposed export controls. Interestingly, he pointed out, concerned authorities in Bangladesh revealed that Bangladesh had presence of rare earth minerals in Cox's Bazar, Teknaf, Kutubdia and other areas. How does Bangladesh leverage these, he posed the question.

Speaking as moderator of the event, BIPSS president Maj Gen Muniruzzaman (retd) said Bangladesh was going through critical times. But the unfolding developments also brought forward many opportunities for Bangladesh. Given the changing geopolitical and geo-economic  dynamics, the US and the West look for safe shoring, such as relocating supply chains or manufacturing options, etc. "We need smart and robust diplomacy to reap the benefits of this situation," said the BIPSS president. However, he added, investment and trade confidence in the government was drying up. He said Bangladesh required a comprehensive strategy and a proactive policy framework. It needed to move to an elected representative government to tackle these challenges adeptly.