Economic diplomacy between Bangladesh and East Asia

18 May 2012, 18:00 PM

Meherun Nesa Shikha

Photo: AFP

The role of economic diplomacy has been transformed in the post cold war era. Trade, market and investment have been promoted through using foreign policy instruments. Now a day, there is a growing realisation that economic relationships have strong impacts on political relationships and these will not be effective until or unless a robust economic diplomacy is pursued by the stake holders. Against this backdrop, Bangladesh foreign policy also has to count on economic diplomacy to have increased access to global markets. Notwithstanding the commitment of the Bangladesh Government to use economic diplomacy as the central strategy to all the diplomatic initiative (Budget Speech, 2009-10, section 261) the performance of Bangladesh in this sector is not so satisfactory. An enhanced economic diplomacy should be pursued to attract investment, utilize and obtain technology along with better management of external economic assistance. Regional trading partnership is the most common and effective form of economic diplomacy. In this regard, Bangladesh has been maintaining good relationship with the East Asian countries. It has adopted 'Look East Policy' but yet to realize it fully. A detailed and professional economic diplomacy is needed for Bangladesh which can help reap the potential benefits of Bangladesh-East Asia cooperative relations. In terms of political, economic and cultural relations Bangladesh has been maintaining good ties with the countries of East Asia from the very beginning. Bangladesh-Japan bilateral relation was established in February, 1972 and Japan has been increasingly and consistently upholding its status as the 'single largest donor' in Bangladesh for four decades. Japan's impact is clearly visible in almost all aspects of Bangladesh's economic development and social transformation. Although Bangladesh is an LDC and small in size, it has enough potential to gain from Bangladesh-Japan cooperative relation if the country pursues an improved economic diplomacy. Our weakness in economic diplomacy in dealing with Japan has been exposed by the issue of Padma Bridge financing. Japan expects a breakthrough in consultation with the World Bank and the ADB as Japan alone cannot finance such a big project. However, the Japan has agreed to consider the Metro Rail Project actively under the 33rd loan package of $700 million. In case of Bangladesh-China relations, we can see that although China did not recognise Bangladesh initially, China and Bangladesh established diplomatic relations in 1975, and once ties were established both nations have come closer over the years. Now, Bangladesh has become one of the largest trade partners of China in South Asia. Bangladesh maintains a very close relationship with China for its economic and military needs and over the years, the two sides have signed a number of bilateral agreements that range from economic engagements, soft loans, social contracts, cultural exchanges, academic interactions, infrastructure development and military procurement. China-Bangladesh cooperation could work better if Chinese investment for establishing backward linkage industries in the field of textile and clothing could be attracted through a proactive economic diplomacy. Bangladesh has also good bilateral relations with South Korea which is now considered one of the economic tigers of Asia. The growing relationship between the private sectors of these two countries is the most encouraging development in these bilateral relations the two. South Korea's investment and business opportunities in Bangladesh are on the increase and South Korea has been a significant development partner in Bangladesh. Many joint ventures in Bangladesh's Export Processing Zones (EPZ) have been set up by Korean investors and South Korea is reportedly the largest foreign investor in the EPZs. But the matter of regret is that there are more than 1, 30,000 Bangladeshi foreign workers in the country among whom significant numbers are illegal immigrants. The two governments should talk on this issue and resolve the problem of illegal migrants otherwise this can create impediments in the bilateral relations. Each of the governments of the East Asian countries has played a decisive role in development by engineering economic miracle, and Bangladesh can learn a lot from them for our development. Especially, it can emulate the Korean model to grasp its economic potential as the economic situation and also the level of development of Korea in the 1960s were at par with Bangladesh. A more developed relation with this region can lead Bangladesh to have a rapid economic growth and industrialization. However, Bangladesh already has an excellent relation with East Asia therefore the cooperative relations between Bangladesh and East Asia will develop more if the economic diplomacy could be practiced properly by Bangladesh and by doing so, these evolving relations between Bangladesh and East Asia could be materialized into an instrument to achieve the foreign policy objectives of Bangladesh. The writer is a Research Associate, CPD.