Tuesday, May 10,2022
As the United States and Bangladesh celebrate 50 years of diplomatic relations, I am excited for the future. And as I have said before, the United States is willing to go as fast as Bangladesh is to deepen and expand our bilateral relationship.
Tonight, I am especially pleased to welcome members of the U.S.-Bangladesh Business Council. They are, I am sure, also willing to go as fast as Bangladesh is to expand their trade and investment ties.
Indeed, of all of the areas of bilateral cooperation, I am convinced that we can go furthest fastest on economic issues.
This is not just talk. As a testament to the importance we place on growing our trade and investment relationship, the U.S. Embassy will welcome the first ever full-time attaché from the U.S. Department of Commerce this summer. This step—frankly long overdue—will provide a direct liaison between U.S. and Bangladeshi businesses.
In addition, we look forward to welcoming the Prime Minister’s private sector and investment advisor Salman F. Rahman and his delegation to the United States next month for the High-Level Economic Forum. There, the United States and Bangladesh will discuss trade and investment opportunities across a number of sectors.
In short, together we have the foundation on which to expand our economic relationship. But in order to take things to the next level, two things must happen. First, American companies and investors must become more aware of the opportunities Bangladesh presents. Second, Bangladesh must be ready to welcome American businesses who do come here.
I doubt this will come as a shock to any of you. But most heads of U.S. companies do not wake up in the morning thinking, “Hmmm – maybe I should do business in Bangladesh.” They usually have their hands full just keeping up with the U.S. market. And if they are operating globally, they are probably operating in well-understood markets. They simply aren’t aware of Bangladesh. But as the 50-some companies who have joined the U.S.-Bangladesh Business Council know, there are strong reasons to look at Bangladesh for market opportunities. And Bangladesh is worthy of their attention. Why?
First, Bangladesh has a great macroeconomic story. It has been among the fastest growing economies in the world over the past decade. Its GDP grew even during COVID-19 lockdowns, and the economy is estimated to grow by 6.9 percent this year and 7.3 percent next year. The country’s financial leaders have managed its debt well and set aside ample foreign current reserves to help it weather shocks.
Second, Bangladesh has a huge and increasingly middle-class population. From being one of the poorest nations on earth in 1971, it will graduate from the UN’s Least Developed Countries list in 2026. It now has a GDP per capita higher than that of India. And as the eighth most-populous country in the world with 165 million people, it has more than twice the population of the UK, four times that of Canada. Any company that can position itself in Bangladesh now has guaranteed returns for aa generation.
Third, an eager and willing workforce. Bangladesh is poised to take advantage of its demographic dividend. Its workforce is young and increasingly well-educated. Business Council members will have seen the least streets of Dhaka the past three days and know they are throbbing with economic activity. This buzz extends into the factory floors and office corridors. A company that is willing to invest in its workforce – to train them and reward them for their work – will have capable and enthusiastic workers beating a path to its door.
Fourth, Bangladesh is uncharted territory for many U.S. companies. This goes back to a lack of awareness of what Bangladesh has to offer. But it also means that companies that enter the market early and boldly will face significantly less competition than they would if they were entering a more mature investment destination.
The companies that form the U.S.-Bangladesh Business Council are clearly aware of what Bangladesh has to offer. The other question is: Is Bangladesh ready for them? In other words, is Bangladesh is a better place for them to devote their time and resources than other countries in the region or elsewhere around the globe? As Bangladesh graduates to middle-income status, it will find it has many competitors also hungry for U.S. business.
A company considering doing business overseas will certainly want to see a developed transportation system, access to power and water, and a well-trained workforce. Bangladesh has made great strides in filling these needs. But a company also wants certainty. A company wants a policy framework that is understood and laws that are consistently enforced. A company wants confidence its intellectual property will be protected. A company wants to know that if a dispute arises it has access to courts that can quickly and fairly settle it.
How does Bangladesh compare with their competitors when these are the questions asked?
Can Bangladesh honestly say it is competitive with other countries in the ease and time it takes to ship a container to market?
Can Bangladesh say it fully understands the impact on business of proposed regulations? For example, does the Bangladesh Telecommunications Regulatory Commission understand how its proposed rules governing data protection online content will force digital businesses to reconsider investing in Bangladesh?
Can Bangladesh assure investors that the process of setting up a business is quick and transparent?
Can Bangladesh say it has an adequate legal framework within which businesses can operate when it takes years to schedule a hearing?
These are the questions that American companies also ask themselves before deciding to do business in Bangladesh.
While low-cost labor is responsible for Bangladesh’s growth until now, concerns over working conditions and labor rights will become the crux of trade decisions as you transition to a middle-income country.
Concerns over labor rights and working conditions cost Bangladesh access to the U.S. Generalized System of Preferences trade benefit, or GSP, in 2013. The European Union has given notice that the same concerns will determine if its trade benefits for Bangladesh continue after it becomes a middle-income country.
These same concerns are also causing Bangladesh to miss out on a massive source of investment capital from the United States. The U.S. Development Finance Corporation, or DFC, was established by Congress with a $60 billion investment authorization. DFC partners with U.S. businesses to develop projects in sectors such as energy, healthcare, critical infrastructure, and technology. DFC would be an ideal financing source for projects in Bangladesh. Unfortunately, until Bangladesh qualifies for GSP it cannot qualify for DFC financing. We hope that Bangladesh will soon make progress on labor rights and workplace safety so it can qualify for DFC and attract more U.S. trade and investment.
As I said in the beginning, the United States is willing to go as fast as Bangladesh is to deepen our partnership. And I also truly believe we can go fastest together in building our trade and investment relationship. This U.S.-Bangladesh Business Delegation demonstrates just how ready the U.S. private sector is to invest their time and energy in Bangladesh.