The diplomatic relationship between Saudi Arabia (KSA) and Bangladesh spans five decades, characterized by strong economic and development ties. As Bangladesh aims to transition from Least Developed Country (LDC) status by 2026 and achieve developed economy status by 2041, Saudi Arabia emerges as a key market for trade and investment. A recent visit by KSA’s Minister of Investment underscores a commitment to strengthen ties, particularly in sectors like food, energy, logistics, and manufacturing.
To fully leverage this opportunity, Bangladesh seeks Saudi investments in infrastructure, energy, and manufacturing. The double taxation agreement is viewed positively, encouraging Saudi investors to explore economic zones and hi-tech parks. Collaboration in technology, renewable energy, and healthcare is emphasized for mutual innovation and competitiveness.
Beyond trade and investment, strengthening cooperation in education, culture, and tourism is seen as vital for expanding the long-term economic partnership. Efficient communication between chambers of commerce and frequent business delegations are proposed to pave the way for new opportunities. The impending LDC graduation of Bangladesh marks a new chapter, with Saudi Arabia viewed as a strategic partner capable of facilitating the economic transformation of Bangladesh.
Financial Support and Investment Commitment
In 2023, Bangladesh witnessed a substantial boost in Saudi Arabia’s investment interest, signifying a pivotal advancement in their bilateral relations. The Saudi Fund for Development played a crucial role, extending a loan assistance of $533.23 million and a grant assistance of $106.38 million for Bangladesh’s infrastructure development. This financial support underscores Saudi Arabia’s dedication to fostering economic progress in Bangladesh.
Bangladesh and KSA Key Developments 2023
|Aspect of Relations
|Diplomatic Relationship & Economic Ties
|– The diplomatic relationship spanning five decades remains robust, with a focus on strong economic and development ties.
|– Saudi Arabia recognized as a key market for trade and investment as Bangladesh aims to transition from LDC status by 2026.
|– The visit by KSA’s Minister of Investment underscores a commitment to strengthen ties, particularly in sectors like food, energy, logistics, and manufacturing.
|Economic Transformation and Cooperation
|– Bangladesh’s ambition to transition from LDC to a developed economy by 2041 positions Saudi Arabia as a crucial partner.
|– Saudi investments sought in infrastructure, energy, and manufacturing.
|– Positive view of the double taxation agreement to encourage Saudi investors in economic zones and hi-tech parks.
|– Collaboration emphasized in technology, renewable energy, and healthcare for mutual innovation and competitiveness.
|Diversification Beyond Trade & Investment
|– Strengthening cooperation in education, culture, and tourism viewed as vital for expanding the long-term economic partnership.
|– Efficient communication between chambers of commerce and frequent business delegations proposed for paving the way for new opportunities.
|Financial Support and Investment Commitment
|– Significant boost in Saudi Arabia’s investment interest in 2023 with a loan assistance of $533.23 million and a grant assistance of $106.38 million for infrastructure development.
|– Saudi Arabia’s dedication to fostering economic progress in Bangladesh highlighted through the financial support.
|Elevating Economic Collaboration
|– Prime Minister Sheikh Hasina’s vision for economic uplift emphasized during a concession agreement signing ceremony.
|– Noteworthy projects like the 1,000 MW Solar Photovoltaic Energy initiative and the joint partnership project in Rampal underscored the commitment to economic collaboration.
|Expanding Cooperation Across Sectors
|– Milestone in cooperation marked by Saudi Commerce Minister Majid bin Abdullah Al-Qasabi’s visit to Dhaka.
|– Potential $3 billion energy deal discussed, indicating Saudi Arabia’s keen interest in investing in Bangladesh’s power, agriculture, and logistics sectors.
|Collaborative Projects and Global Issues
|– ACWA Power actively engaged in developing a 300 MW Solar Electric Unit in Rampal and a 200 MW project in Payra port.
|– Global issues addressed, with discussions on the humanitarian crisis in Gaza and the ongoing Palestine issue.
|– Bangladesh’s assistance to Palestine acknowledged, reflecting diplomatic cooperation.
|Diplomatic Engagement and Visa Intensification
|– Diplomatic engagement strengthened with expedited visa processing, issuing approximately 5,000 visas daily from Dhaka by the Saudi Embassy in 2023.
|– Saudi Arabia’s crucial role as the largest destination for Bangladeshi migrant workers highlighted, contributing significantly through remittance transfer.
|Robust Economic Collaboration
|– Flourishing economic collaboration evidenced by significant projects and bilateral trade reaching approximately USD 2 billion in FY2022.
Elevating Economic Collaboration: Bangladesh-Saudi Arabia Relations on the Rise
Sky’s the Limit – Strengthening Ties
In a testament to the boundless potential of Bangladesh-Saudi relations, Dr Tawfiq bin Fawzan Al-Rabiah, the Saudi Minister of Hajj and Umrah, exuded optimism. He highlighted the robust foundation and abundant opportunities for both nations to explore, actively collaborating in various areas, including investments. An upcoming visit by a Saudi Investment Minister is anticipated to further fortify economic ties.
Prime Minister’s Vision for Economic Uplift
Prime Minister Sheikh Hasina, during a concession agreement signing ceremony with Saudi Investment Minister Khalid A Al-Falih, underscored the substantial progress in bilateral relations. The agreement, involving the operation of the Patenga container terminal, symbolizes a beacon of hope for Bangladesh’s economic growth. Expressing gratitude for Saudi Arabia’s trust and cooperation, the Prime Minister appreciated the appointment of the Red Sea Gateway Terminal to manage the terminal for the next 22 years. This strategic move is poised to significantly reduce import-export expenses, aligning seamlessly with Bangladesh’s economic goals.
Positive Momentum in High-Level Meetings
During a 2023 meeting, Prime Minister Sheikh Hasina and Saudi Investment Minister Khalid A. Al-Falih expressed contentment with the state of bilateral relations. Lauding Bangladesh’s remarkable development, especially in women’s empowerment under Prime Minister Sheikh Hasina’s dynamic leadership, the Saudi minister emphasized investment prospects. Specific projects, such as the 1,000 MW Solar Photovoltaic Energy initiative and the joint partnership project in Rampal, underscore the commitment to economic collaboration. ACWA Power’s Memorandum of Understanding for a 1,000 MW solar energy project and the operationalization of the Patenga container terminal by the Red Sea Gateway Terminal are noteworthy milestones. Additionally, plans by the Saudi oil giant Aramco to invest in Bangladesh’s refinery sector signify the expanding horizon of economic cooperation. The visit of a business delegation, led by DCCI President Barrister Sameer Sattar, aims to further strengthen economic ties, with a visionary goal of augmenting bilateral trade to $6 billion.
Expanding Cooperation across Sectors
Saudi Commerce Minister Majid bin Abdullah Al-Qasabi’s visit to Dhaka marked a milestone in cooperation between the two nations. Cooperation agreements and the establishment of a joint business council signified a commitment to enhancing bilateral business ties. Discussions included a potential $3 billion energy deal, demonstrating Saudi Arabia’s keen interest in investing in Bangladesh’s power, agriculture, and logistics sectors.
Collaborative Projects and Global Issues
In 2023, ACWA Power, in partnership with the Power Division, actively engaged in the development of a 300 MW Solar Electric Unit in Rampal, and a 200 MW project in Payra port is underway. Leaders also discussed global issues, addressing the humanitarian crisis in Gaza and the ongoing Palestine issue. Bangladesh’s provision of assistance to Palestine was acknowledged. The diplomatic exchange included conveying regards from King Salman bin Abdulaziz Al Saud and Crown Prince Mohammed bin Salman to Prime Minister Sheikh Hasina.
Diplomatic Engagement and Visa Intensification
Saudi Arabia plays a crucial role as the largest destination for Bangladeshi migrant workers, contributing significantly through remittance transfer. There’s a call for the Saudi government to recruit more skilled professionals from Bangladesh, contributing to Saudi Arabia’s development and boosting foreign currency inflow. The Saudi Embassy in Bangladesh expedited visa processing in 2023, issuing approximately 5,000 visas daily from Dhaka. This acceleration aligns with the growing interest of Saudi companies to invest in various sectors in Bangladesh, fostering economic collaboration. Furthermore, the expanding overseas employment cooperation, with 2.8 million Bangladeshi workers in Saudi Arabia, and the signing of a crucial agreement on the Workers’ Recruitment and Skill Verification Programme, signify a mutual commitment to fostering collaboration and prosperity. These developments set the stage for continued growth in the strategic partnership between Bangladesh and Saudi Arabia.
Bangladesh and Saudi Arabia Unveil Thriving Economic Partnership in 2023
Bangladesh and Saudi Arabia have scripted a compelling narrative of economic collaboration, marking a triumph in their enduring diplomatic relationship. The economic ties between these two nations have soared to unprecedented levels, with bilateral trade surging past the USD 2 billion mark in the fiscal year 2022.
One of the standout features of 2023 has been Saudi Arabia’s robust increase in imports from Bangladesh, showcasing a growing appetite for Bangladeshi goods in the Saudi market. Monthly data reveals a consistent upward trajectory from January to October, underscoring the quality and competitiveness of Bangladesh’s exports and the resilience of their economic partnership.
KSA Import from Bangladesh 2023
|Import (USD Million)
The economic collaboration extends beyond trade transactions, embracing a diverse range of sectors such as investment, energy security, agriculture, culture, and education. This comprehensive approach reflects the depth and breadth of their engagement, steering the relationship towards a more holistic and mutually beneficial partnership.
In conclusion, the recent strides in the Bangladesh-Saudi Arabia partnership signify a transformative shift, ushering in a new era in their longstanding diplomatic relationship. The dynamic and evolving nature of this collaboration, unfolding over five decades, underscores a commitment to mutual growth and prosperity. The deepening of ties observed in 2023 goes beyond traditional diplomatic and economic boundaries, painting a portrait of trusted friends and bilateral partners. Both nations find common ground in global positions and economic interests, leading to engagements across diverse sectors such as economy, trade, investment, energy security, agriculture, culture, and education.
Delwar Hossain, PhD is Professor of International Relations, University of Dhaka, Bangladesh.
S. M. Saifee Islam is a Research Associate at the KRF Center for Bangladesh and Global Affairs (CBGA).