Bangladesh's time to look south again

Bengal’s connections with the wider South run deep. An early Islamic narration tells of a ruler of Hind sending ginger to Prophet Muhammad (PBUH), reflecting centuries-old exchanges between the subcontinent and Arabia. Local history recounts another intriguing connection: merchants from Saba, present-day Yemen, anchored their trading vessels on the shores of what is now Savar. Bengal’s muslin and textiles travelled through Persian Gulf and Red Sea networks into the markets of the Ottoman world. Tagore’s Kabuliwala portrayed an Afghan merchant bringing dry fruits and nuts from Kabul to Bengal. From Saba to Savar, and Arabia to Bengal, the region’s history reveals an economic geography stretching across the wider South, long before the term South-South Cooperation was coined.

Those historical links did not disappear but changed form. Today, one of Bangladesh’s deepest connections with the wider South is through its people. According to Bangladesh Bank, the six Gulf Cooperation Council (GCC) countries together consistently account for close to half of Bangladesh’s remittance inflows, almost one out of every two dollars sent home. Saudi Arabia and the UAE are the two largest Gulf sources, while Oman, Kuwait and Qatar also rank among Bangladesh’s leading remittance origins. The potential of this enormous relationship, however, remains largely untapped beyond labour migration and remittances. The Gulf’s importance as a source of remittances is still far greater than its role as a destination for Bangladeshi exports or a source of productive investment, highlighting the scope to broaden the relationship towards trade, investment, technology, logistics, skills and entrepreneurship.

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The contrast is even sharper closer to home. South Asia remains among the least economically integrated regions in the world. Trade among South Asian countries amounts to only about $23 billion annually, against an estimated potential of at least $67 billion. The striking point, therefore, is not simply that South Asia trades too little with itself. It is that the region did not begin economically disconnected; it became disconnected, and despite decades of regional cooperation initiatives, remains so. South-South Cooperation offers an opportunity to begin correcting it.

For Bangladesh, this matters at a particularly important moment. Ready-made garments still accounted for 80.6 percent of merchandise exports in FY2025-26, while the EU alone absorbed around 49 percent of RMG exports and the United States another 20 percent, with non-traditional markets accounting for only around 16 percent despite years of efforts to diversify. Bangladesh therefore faces two diversification challenges simultaneously: it must sell more kinds of products and services, and sell them to more places. This is where South-South Cooperation can move from diplomatic language to economic strategy. Looking South need not mean looking away from Europe or North America, which will remain indispensable markets; it means widening Bangladesh’s economic geography. Across the Global South, from the Gulf and South and Southeast Asia to East Asia and Africa, lie not only expanding markets, but also sources of capital, technology, skills, connectivity and development experience.

The Gulf offers perhaps the most immediate opportunity because the human infrastructure is already there. Bangladesh and the UAE are working towards a Comprehensive Economic Partnership Agreement (CEPA), opening an avenue to turn a mature migration relationship into deeper trade and investment ties. Saudi engagement is also taking a more productive form: Saudi Arabia’s Red Sea Gateway Terminal (RSGT) operates the Patenga Container Terminal at Chittagong Port, bringing Gulf participation directly into Bangladesh’s trade infrastructure. More recently, Dhaka has also signalled openness to the Mecca Joint Defence Agreement between Saudi Arabia, Türkiye and Pakistan, reflecting a relationship with the wider region that is expanding beyond its traditional economic dimensions. The broader opportunity is to translate this growing engagement from workers to professionals and entrepreneurs, from remittances to investment, and from migration corridors to trade and logistics corridors.

Centuries ago, traders and travellers connected Bengal with Arabia, Central Asia and the wider Indian Ocean; scholars and Sufis followed many of the same networks. Shah Jalal’s 14th-century journey to Sylhet remains one of the most enduring symbols of those movements of people and ideas into Bengal. Looking South means looking in every direction once more. South-South Cooperation offers Bangladesh an opportunity not to discover a new economic geography, but to reconnect with an old one, and thus reshape it for the 21st century.

Dr Iftekhar Ul Karim is assistant professor at BRAC Business School, BRAC University. He can be reached at  
iftekhar.karim@bracu.ac.bd.

Views expressed in this article are the author's own. 

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