FM Hasan Mahmud’s Riyadh visit : An impetus in KSA-Bangladesh diplomacy

Ozair Islam
Contd from previous issue
Saudi Arabia becomes an important market for trade and investment as Bangladesh strives to become a developed economy by 2041 and move out of the Least Developed Country (LDC) category by 2026. A free trade agreement and KSA’s duty-free access to Bangladeshi goods should be advantageous to Bangladesh. Hasan Mahmud’s current visit demonstrates a dedication to fortifying relations, especially in areas such as industry, logistics, energy, and food. Furthermore, the visit ought to be vital in order to reduce the difficulties associated with obtaining a visa for Haj performers, attract more Saudi investments, boost trade volumes with Riyadh, and facilitate the migration and training of human resources.
Bangladesh is looking for Saudi investments in industry, energy, and infrastructure to take full advantage of this potential. Positive perceptions of the investment arrangement should encourage Saudi investors to investigate economic zones and high-tech parks. Cooperation is prioritized for mutual innovation and competitiveness in technology, renewable energy, and healthcare.
Enhancing collaboration in the areas of education, culture, and tourism is seen essential for extending the enduring economic alliance, in addition to commerce and investment. To open up new possibilities, regular business delegations and effective contact with chambers of commerce are suggested. Bangladesh will soon graduate from LDC status, ushering in a new era. Saudi Arabia is seen as a crucial partner who can help Bangladesh achieve its economic goals.
Saudi Arabia’s interest in investing in Bangladesh increased significantly in 2023, which was a significant development in their bilateral ties. With a gift of $106.38 million and a loan of $533.23 million, the Saudi Fund for Development was instrumental in helping Bangladesh expand its infrastructure. This financial assistance demonstrates Saudi Arabia’s commitment to promoting Bangladesh’s economic development. However, this appears inconsequential in light of its investments in India and Pakistan. But Saudi investment in Bangladesh is still needed. Economists predict that high-quality investments from Saudi Arabia and other countries will help Bangladesh achieve sustained economic development, create employment, and lower poverty rates.
Bangladesh’s top Middle Eastern commercial partner continues to be Saudi Arabia. But in 2022, bilateral commerce will only amount to $2 billion. Saudi Arabia’s sharp rise in imports from Bangladesh in 2023 has been one of the most notable aspects of the country, indicating a rising demand for Bangladeshi products in the Saudi market. The monthly data indicates a steady ascent from January to October, highlighting the caliber and competitiveness of Bangladesh’s exports as well as the tenacity of their economic alliance. Over 2.8 million Bangladeshi laborers are engaged in Saudi Arabia at the moment. Thus, in 2023–2024, Bangladesh received remittances of almost $2.16 billion. We are worried about the declining trend in Saudi Arabian remittances coming into Bangladesh throughout the last three years. Data from Bangladesh Bank indicates that Saudi Arabia earned $5.7 billion in remittances in 2020–21. In 2021–2022 and 2022–2023 it fell to $4.5 billion and $3.7 billion, respectively. To boost the remittance flow, Riyadh and Dhaka must cooperate.
Bangladesh’s economy continues to expand at one of the quickest rates among emerging nations. It has one of the most investor-friendly regulatory environments in South Asia, with cheap labor costs, long tax vacations, duty-free machinery imports, relief from double taxation, 100% foreign ownership in the majority of sectors, complete capital and dividend repatriation, and more. In conclusion, it is evident from the resolute promises given by the biggest-ever Saudi business delegation that Dhaka-Riyadh ties are progressing to new heights. The more severely Riyad focuses on the East, the more probable it is that Saudi Arabia’s relationship with Asian nations—including Bangladesh—should expand.
Ozair Islam is a freelance writer and columnist, and has a Master’s from the Department of Development Studies, University of Dhaka