“We see few issues as investors. Firstly, the stability (of the country), businessmen see whether it is stable, the future of investment. The present and future of Bangladesh is very good, and that is why we’ve taken the decision to strengthen relations with Bangladesh.”
– KSA’s Minister of Investment and Minister of Economy and Planning
The recent proposal by Kingdom of Saudi Arabia (KSA) to invest significantly in diverse sectors of Bangladesh has initiated a fresh phase in the enduring association between the two nations. The aforementioned proposition arises in the context of Bangladesh’s ongoing noteworthy economic expansion and stability, which has been attributed to the guidance of Prime Minister Sheikh Hasina. During a meeting between Saudi Arabian Minister of Investment Khalid A. Al-Faliah, Minister of Economy and Planning Faisal Alibrahim, and Prime Minister Sheikh Hasina, both sides expressed their optimism about the future and emphasised the potential for collaboration in diverse fields.
The bilateral relations between Saudi Arabia and Bangladesh have been marked by reciprocal esteem, collaboration, and a robust basis of confidence and amicability throughout history. Bangladeshi migrant workers have been a prominent feature in Saudi Arabia for a considerable period, and their contributions to the socio-economic progress of the nation have been noteworthy. Migrant labourers have been instrumental in fulfilling critical functions across diverse industries such as construction, healthcare, and household assistance.
Apart from the phenomenon of labour migration, Saudi Arabia has consistently extended support to Bangladesh by offering monetary aid and humanitarian relief during periods of crisis. The provision of aid has played a pivotal role in mitigating a range of obstacles encountered by Bangladesh, including but not limited to ecological calamities and exigencies of a humanitarian nature. The provision of aid from Saudi Arabia has facilitated Bangladesh in surmounting these challenges and engendered a sentiment of camaraderie between the two countries. In addition, the remittances transmitted by Bangladeshi labourers to Saudi Arabia have exerted a noteworthy impact on the economy of Bangladesh. The financial transaction between Saudi Arabia and Bangladesh was significant in March 2023, with remittances amounting to 28,588.386 BDT million.
Furthermore, the commercial ties between Saudi Arabia and Bangladesh have exhibited a positive prospect in recent times. According to the latest available data, the Kingdom of Saudi Arabia exported commodities valued at approximately US$1.13 billion to Bangladesh in the year 2021. In contrast, the total worth of imports from Bangladesh into Saudi Arabia during the same period was approximately US$493.26 million. The mutually beneficial exchange of goods and services between the two nations has played a significant role in fostering economic development and reinforcing their economic relationship.
Equally, in light of the burgeoning trade and economic ties between Bangladesh and KSA, the recent remarks made by the Minister of KSA aptly indicate a promising future for the bilateral relations between the two nations. Furthermore, the worldwide economic recession has presented significant challenges for all economies across the globe. From this standpoint, it is of utmost significance for Bangladesh to achieve the status of a developed nation by the year 2041. Additionally, it is imperative for the Kingdom of Saudi Arabia to establish a collaborative partnership in order to realise the objectives outlined in the 2030 vision.
The meeting and outcomes
In recent years, Bangladesh has achieved noteworthy progress in its economic development, garnering acknowledgement as one of the swiftest expanding economies globally. The conducive environment for foreign investment has been created by the government’s dedication to political stability, infrastructure development, and economic reforms. Saudi Arabia has taken note of the advancements made by Bangladesh and considers it to be a favourable location for investment due to its strategic positioning at the intersection of South and Southeast Asia. Saudi Arabia intends to capitalise on the opportunity to position Bangladesh as a central hub in the region, with the goal of enhancing its footprint in the larger Asian market. Regarding this matter, the ministers of the Kingdom of Saudi Arabia stated.
“If we make it a hub, we can cover up Indonesia, Malaysia, and more.”
Furthermore, the aforementioned assertion connotes the KSA’s strategic outlook and shift towards the wider Indo-Pacific area. The economic and geopolitical significance of the region is expected to increase, with the Kingdom of Saudi Arabia’s energy supply playing a crucial role in shaping the developments and investments in the region’s economy. In the context of KSA, it is imperative to have a strategic and stable development partner in the region. Moreover, the rapidly growing economy of Bangladesh presents an opportune platform for KSA to establish a connection with a significant stakeholder.
Moreover, the ministers of Saudi Arabia have identified multiple sectors in which they intend to make substantial investments in Bangladesh. The aforementioned industries encompass petrochemicals, diesel, jet fuel, fertilisers, prominent distribution hubs, maritime transportation companies, and additional sectors. The present proposal is in accordance with the Vision 2030 of Saudi Arabia, which is a far-reaching strategy aimed at broadening the country’s economic base and decreasing its reliance on petroleum resources. Saudi Arabia aims to establish a mutually advantageous collaboration with Bangladesh by investing in various sectors, with the objectives of generating employment opportunities, facilitating technology transfer, and strengthening trade relations. However, the realisation of Bangladesh’s goal to attain developed country status by 2041 necessitates collaborative efforts and financial investments to materialise the vision. The alignment of interests between two nations has resulted in a high level of optimism from both parties regarding these emerging advancements.
On the other hand, the Prime Minister of Bangladesh, Sheikh Hasina, has proposed to Saudi Arabia the utilisation of Matarbari and Paira Sea ports, along with economic zones, for the purpose of mutual gains. The proposal showcases Bangladesh’s dedication to enabling Saudi Arabian investments by furnishing the essential infrastructure and fostering opportunities for cooperation. The head of government has instructed the appropriate governing bodies to resolve any impediments that could potentially impede the seamless execution of Saudi Arabian investments in Bangladesh. Through the utilisation of these resources, both nations have the potential to cultivate economic expansion and capitalise on their individual areas of expertise.
However, it is noteworthy that both factions place significant emphasis on fostering interpersonal relationships and enhancing policies pertaining to migrants. In addition to the matters pertaining to Hajj, the two ministers made a invitation for Bangladesh to allocate resources towards the construction of residential and medical facilities within the confines of Saudi Arabia. Through the implementation of these initiatives, Bangladesh has the potential to not only establish a new realm of investment opportunities in the Kingdom of Saudi Arabia, but also alleviate the issue of residency for Bangladeshi Hajjis in the foreseeable future. Furthermore, this investment is expected to generate novel employment prospects.
The global economy is undergoing significant transformations in contemporary times, as are the developing nations. These modifications additionally enhance the bilateral linkage between emerging and industrialised economies. The recent proposal of significant investment by Saudi Arabia in Bangladesh is indicative of the robust bilateral ties between the two nations. Bangladesh’s stable political regime, impressive economic expansion, and strategic geographical position exemplify recent international economic collaboration. Conversely, in the case of Bangladesh, the strategy implemented by KSA is not an abrupt occurrence; rather, it is a result of Bangladesh’s encouraging progress in recent years. Thus, it can be inferred that both actors possess the necessary credibility and capability to establish a viable collaborative alliance aimed at fostering future economic advancements.
– S. M. Saifee Islam is a Research Associate at the KRF Center for Bangladesh and Global Affairs (CBGA).
Read Full Briefs as a Pdf [Link]
