by Ozair Islam
From July 1–3, Bangladeshi FM Hasan Mahmud is in Riyadh on an official visit to cement the official diplomacy between Bangladesh and the KSA. There are two main reasons why this visit is really important.
First, following the first-ever political consultations between Saudi Arabia and Bangladesh, which took place in Dhaka on March 16, 2022, the two countries recently held their second political consultations in Riyadh on July 1. During this meeting, topics including trade, investment, the Rohingya crisis, Bangladeshi migrants, and other matters of mutual interests such as bilateral, economic, manpower, and energy partnerships, as well as regional and global development, education, health, investment issues, environment and climate change, ICT, and tourism were discussed.
The delegations from Saudi Arabia and Bangladesh were led by Foreign Minister Prince Faisal bin Farhan Al Saud and Foreign Minister Hasan Mahmud, respectively, during the high-level meeting held at the Saudi Ministry of Foreign Affairs. During the meeting, the leaders of the two friendly nations reaffirmed their friendship and long-standing relationship, and they expressed pleasure with the current level of bilateral cooperation.
Second, the visit offers a rare chance to assess the whole range of collaborations between the Kingdom of Saudi Arabia and Bangladesh, map out the direction of future bilateral relations, and open the door for high-level meetings. It is noteworthy that later this year, Saudi Crown Prince Mohammed bin Salman bin Abdulaziz Al-Saud, who also serves as the Kingdom of Saudi Arabia’s prime minister, is probably going to make an official visit to Bangladesh. In the history of Bangladesh-Saudi Arabia bilateral relations, this would be a significant development that would strengthen ties, particularly in the areas of investment, trade and commerce, and economic cooperation. After Saudi Crown Prince Abdullah bin Abdulaziz’s 1985 visit to Dhaka, this would be the first crown prince visit to Bangladesh. During the Saudi leader’s visit, a number of bilateral documents, including agreements and memoranda of understanding, may be signed. Both parties anticipate that this will further boost the bilateral connections between their nations.
The FM of Bangladesh and his delegation paid a visit to Riyadh, which bolstered the already strong brotherly ties between Saudi Arabia and Bangladesh. For political, religious, and economic reasons, Bangladesh’s foreign policy heavily relies on the Kingdom of Saudi Arabia (KSA). KSA has been essential for much-needed economic help, mainly as grants, commerce and investment, energy supply, jobs, and remittances, since the beginning of diplomatic ties in 1975.
The second-ever high-level political dialogue between Dhaka and Riyadh after two years shows the revitalization of the existing political coalition and demonstrates a symbolic gesture to Saudi Arabia’s reprioritization of Asia in its foreign policy. This comes amid the growing geopolitical irritants in the Middle East, particularly the Gaza-Israel war in Middle East and the Russia-Ukraine crisis in Eurasia. The possibility of developing a connection towards a comprehensive partnership with a targeted roadmap is diminished in such a political environment. During the discussion, the foreign minister of Bangladesh suggested using the unrealized potential and establishing a win-win scenario. It’s also important to note that Bangladesh and KSA have similar opinions about the Gaza-Israel conflict. Both want a two-state solution and an immediate cessation of hostilities. However, Bangladesh has always valued the KSA’s continued assistance for the Rohingya community.
Both Bangladesh and the Kingdom of Saudi Arabia might align with each other’s ambitious goals of “Vision 2041” and “Vision 2023” as both can steer both nations towards mutually beneficial growth. Prince Faisal praised Bangladesh’s remarkable economic growth. He conveyed Riyadh’s openness to explore new forms of economic collaboration. In the meanwhile, the prime minister of Bangladesh has already asked Saudi Arabia to increase its investment, especially in the country’s special economic zones. “Bangladesh is prepared to offer assistance to investors from Saudi Arabia, including providing them with exclusive land in the special economic zones,” the spokesperson said.
Five decades have passed since Saudi Arabia (KSA) and Bangladesh established diplomatic relations, which are marked by close development and commercial connections. 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 Riyadh focuses on the East, the more probable it is that Saudi Arabia’s relationship with Asian nations—including Bangladesh—should expand.
About the writer:
Ozair Islam, a strategic affairs and foreign policy analyst, is currently working as a consultant to a Bangladeshi NGO. He can be reached at ozairislam80@gmail.com