Economic Diplomacy a must to consolidate bilateral relations between Bangladesh and Sri Lanka: Dr. Islam

Eak Raj Bastola

March 9, 2021


Economic Diplomacy a must to consolidate  bilateral relations between Bangladesh and Sri Lanka: Dr. Islam

Dr. Mohammad Tarikul Islam is an Associate Professor of the Department of Government and Politics at Jahangirnagar University in Bangladesh. He has been a Visiting Scholar at the University of Oxford and the University of Cambridge, United Kingdom.

Before joining the university, Dr. Islam was serving the United Nations Development Program for a period of seven years.

The School of Oriental and African Studies (SOAS), University of London has recently appointed Professor Islam as a Visiting Fellow. Professor Islam took out some of his time to speak with Khabarhub on the recent trend of Bangladesh-Sri Lanka bilateral relations. Excerpts:

How do you see the bilateral relations between Bangladesh and Sri Lanka in a close to 50-year period?

The diplomatic ties between Bangladesh and Sri Lanka have grown from strength to strength over the period through impressive cooperation in political, economic, cultural, educational and defense grounds. Successive Governments in both countries have leveraged their persistent efforts for enhancing this relationship.

Apparently, over the decades both neighboring South Asian nations have undergone remarkable foreign policy changes and have immense scope to deepen this multifaceted close friendship to flourish.

The two South Asian nations have been historically in friendship since before the subcontinent’s colonization by the British. Indeed, Sri Lanka has had fruitful relations with Bangladesh since its creation in 1971.

Among the eight SAARC nations, Bangladesh is important for Sri Lanka as a bilateral partner while placing high emphasis on positive bilateral engagements.

The economic, political, and cultural partnerships between Sri Lanka and Bangladesh have strengthened their traditionally friendly relations in order to make them significant players in the South Asia region. Moreover, regular high-level visits in both directions serve to cement and expand bilateral relations that are mutually beneficial in all spheres.

Do you believe, can both countries figure out combined effort to contain the COVID pandemic impact for accelerating economic recovery?

Up to this point, Sri Lanka has had the option to a great extent contain the COVID-19 effect and is in a situation to zero in on financial recuperation, which can together be accomplished through more profound collaboration with Bangladesh.

As an economy with a positive development projection, Bangladesh offers huge market potential to Sri Lankan organizations. Certain territories can be engaged upon when hoping to encourage further participation.

For example, reciprocal exchange, which is at present restricted, can be supported through the formalization of a Free Trade Agreements (FTA).

As the 50-year commemoration of two-sided relations draws near, during a period described by major worldwide production network shifts welcomed on by the COVID-19 pandemic, there is a chance for Sri Lanka and Bangladesh to check out existing relations and review approaches to build up ties.

With the rise of Asia, the partnership between Sri Lanka and Bangladesh can be taken to a whole new level by being a model to be emulated by other South Asian countries for enhanced economic growth leading to economic development in the region.

How does the regional cooperation influence the bilateral relations between two countries in South Asia?

Sri Lanka and Bangladesh share membership of a few multilateral associations including the SAARC and BIMSTEC.

The two South Asian nations are also signatories to regional trade agreements namely the South Asian Free Trade Agreement (SAFTA) giving Bangladesh and Sri Lanka preferential market access to over 1.6 billion people.

In the recent past, we have looked at the creation of a SAARC crisis COVID-19 fund where Sri Lanka and Bangladesh had contributed USD 5 million and USD 1.5 million individually.

Building on the great traditional friendship the two nations are able to work closely through the Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC) to unleash closer cooperation.

As set in the Bangkok Declaration of 1997, the core objective of BIMSTEC is to create an enabling environment for rapid economic development through the identification and implementation of specific cooperation projects in trade, investment, industry, technology, human resource development, tourism, agriculture, energy, infrastructure and transportation.

Unfortunately, BIMSTEC is yet to overcome limitations of its nascent stage as the member countries have deliberately failed to strategize an institutional mechanism in expediting the procedure of cooperation over the last 24 years.

The seven-member countries of the BIMSTEC could not adopt a charter since its inception. The impulse of influential member country India to promote the BIMSTEC as an alternative to the SAARC could hinder the overall progress of this regional forum.

Nonetheless, lack of institutional mechanism, lack of power of the BIMSTEC secretariat, bilateral issues between Bangladesh and Myanmar particularly on the repatriation issue of Rohingya Refugees and the influence of China in the region in the context of rivalry between India and China are hampering the BIMSTEC process.

What steps Bangladesh and Sri Lanka need to follow while enhancing cooperation in the field of textile, garments and maritime?

We know the global garment industry is currently struggling to cope with challenges posed by the COVID-19 pandemic and subsequently global supply chains shift to reduce their reliance on China. Taking advantage of the global scenario, both countries should revisit their action plan to increase volume of exports.

In order to promote bilateral businesses and enhance cooperation in the field of production, trade, commerce and research related to the textile and garment industry, Sri Lanka’s Joint Apparel Association Forum (JAAF) and the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) had signed an MoU in January 2020.

Maritime connectivity between the countries is reflected in their higher liner shipping bilateral connectivity index (LSBCI). Sri Lanka ranks as the 7th most well connected country globally, and the most well connected within the South Asian region, to Bangladesh in terms of shipping.

Sri Lanka’s strategic location on major shipping routes in the Indian Ocean allows better access and connectivity to key markets than Bangladesh does.

Even, harbour and shipping fees in Sri Lanka are lower, resulting in lower overall transportation costs. Bangladesh should utilize Sri Lankan ports.

For example, container freight from Sri Lanka to Japan is approximately 40% cheaper than from Bangladesh to Japan. Sri Lankan ports are also closer to key western markets than Bangladesh’s Chittagong port and are two weeks ahead in lead time.

Hence, MoU between the Bangladesh Shipping Corporation and the Ceylon Shipping Corporation could be an important means in increasing the frequency of feeder services and providing priority berthing and tariff concession at the Chittagong and Colombo seaports.

How does the government of Bangladesh foster the concept of economic diplomacy?

You know, Bangladesh prioritizes economic diplomacy in its foreign policy formulations. At the Bangladeshi envoy’s conference, held in July 2019 in London, Prime Minister Sheikh Hasina had asked Bangladeshi envoys based in European countries to pursue economic diplomacy as a top most priority to sustain the ongoing development in Bangladesh.

Even, at the World Economic Forum Economic Summit in New Delhi in October 2019, Sheikh Hasina presented Bangladesh as the economic hub in the sub-region calling upon the global investors to invest in Bangladesh.  Currently, Bangladesh is setting up 100 special economic zones, with a one-stop service across the country to attract foreign direct investments.

Moreover, the agreements on economic cooperation between Bangladesh and different countries illustrate the importance Bangladesh is attaching to advocate for trade and investment through economic diplomacy.

As a scholar on Bangladesh’s foreign relations towards South Asia, what is your recommendation to take the momentum forward for consolidating the bilateral relations? 

Economic diplomacy, I find the most important means by which both governments could comprehend their national interests.

Bangladesh’s government has to focus on convincing people, even some of her neighbors, as well as the SAFTA framework of SAARC that it offers excellent investment opportunities and that the overall investment climate is conducive to foreign investment.

The economic diplomacy of Bangladesh should go beyond political relations and help pave a way for globalization.

The momentum gained from people to people contact between the two countries is to be consolidated in the coming years. Regional cooperation is of growing importance in economic diplomacy.

Opening of borders and markets become easier within a regional framework. The eventual easing of visa regulations on both sides will also facilitate travel between the two countries.

Bangladesh, at the beginning of the 21st century, is striving hard to attain her maximum economic benefit through the instigation of economic diplomacy which is evident from closer relations of its government with different global and regional economic forums. Bangladesh and Sri Lanka are a clear example of South-South cooperation which is essential for the developing world.

The Sri Lankan business community should not miss out on excellent investment opportunities there, which could multiply benefits.

Bangladesh is a good investment venue, with a variety of sectors to invest in, such as cement, ceramics, electronics, electrical items, pharmaceuticals, fertilizer, food processing and garments, among others. Export Processing Zones (EPZ) in Bangladesh are success stories.

The decision-makers must be pro-active rather than reactive in their actions. Despite having otherwise potential to grow, Bangladesh continues to lag behind its competitors for missing out on opportunities and because of its policy-makers’ indecisions.

The private sector should have a lead role in economic activities. Economic diplomacy is best carried out through public-private partnership forum.