Bangladesh and Latin America in 2023: Emphasizing the New Frontiers of Bilateral Cooperation

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The year 2023 was a significant year for Bangladesh as the country reached new heights in diplomatic development, particularly in forging strong bilateral ties with Latin America. Building robust relationships with countries in Latin America opens up new avenues for cooperation in various fields, such as trade, culture, education, and technology. These enhanced connections contribute to the diversification and expansion of Bangladesh’s diplomatic efforts on the global stage.

Background

Two major powers of the Latin American region, have set up embassies in Bangladesh recently to facilitate deeper diplomatic connections, with Mexico planning to open one soon. Also, increased visits from high-level government officials and representatives from Latin countries to Bangladesh signal attempts to forge deeper diplomatic connections.

A total of $14.11 million in investments have been made in Bangladesh over the past ten years by Uruguay, Bolivia, Chile, El Salvador, Mexico, Peru, and Panama. The Export Promotion Bureau reports that in the fiscal year 2022–2023, Bangladesh sent $621.27 million worth of products to nations in Latin America, an increase of 20.51 percent from the previous year. The amount received from exports in the first two months of the current fiscal year of 2023-2024 was $107.75 million. The statistics reflect the fact that the Latin American region is turning into a major export market for Bangladesh. Both Bangladesh and the Latin nations are looking for diverse markets for their products. Bangladesh and Latin American countries are mainly export-oriented and want to test new markets and observe any potential. Bangladesh and most Latin countries have a growing GDP and preparing for the changing trends of the global market.

Warm and effective relations with the Latin nations can make it easier for Bangladesh to get a more accessible entry to a large portion of the BRICS market, with Brazil being a BRICS member and Bangladesh also wants to join BRICS as it will open one additional source of financing and will attract more foreign investment into the country. Bangladesh is growing regionally stronger and will need to harness the positive outcomes from more bilateral ties with other countries and Latin America can be a great avenue for that. As the world is still reeling from the negative consequence of the COVID-19 pandemic and the Russia-Ukraine war, Bangladesh will need to get hold of the Latin market to protect its domestic one from the brunt of the present and future global conflicts and epidemics.

Bangladesh is now a popular destination for foreign trade and investment in this region. Latin American countries are also keen to extend an invitation to Bangladesh to their growing network of trade, which means the countries want to join in on the economic success Bangladesh has been enjoying for the last few years. The year 2023 was significant in shaping the future trajectory of the diplomatic and economic affiliations shared by Bangladesh and Latin America. For Bangladesh, forging cooperation with a regional bloc like Mercosur (a South American trade bloc) can lead to the diversification of export markets which is often seen as a prerequisite for economic development, and will be mutually beneficial.

This brief focuses on the trends observed during the year 2023 in the bilateral ties between Bangladesh and Latin America emphasizing the diplomatic and trade developments of Bangladesh with the Latin nations and prospects for future partnerships.

Argentina

Bangladesh and Argentina have long-standing diplomatic relations with a shared commitment to advancing regional and international collaboration with their national interests in mind. There was a diplomatic milestone for Bangladesh when Argentina officially reopened its embassy in Dhaka after a long 45-year pause, on the 27th of February 2023. The FIFA World Cup in Qatar shed light on the extraordinary support the Argentine football team enjoys in Bangladesh. This shared love for football heralds a promising start to bilateral ties with the embassy’s inauguration. The reopening of the embassy paves the way for further bilateral interactions in diplomatic, economic, and cultural dimensions. Argentina’s move to establish its embassy in Dhaka is another indication of how Bangladesh is being recognized for its strategic importance and a rising power in South Asia. On the day of opening the embassy, the two countries also inked agreements focusing on the area of diplomatic training, facilitating football training and cooperation, and exemption of visas for diplomatic and official passport holders.

The impactful trip by Santiago Andrés Cafiero, Argentina’s minister of foreign affairs, and international trade was the maiden visit by any South American Foreign Minister to Bangladesh. During his visit, Bangladesh and Argentina also signed a Memorandum of Understanding (MoU) to expand bilateral trade and cooperation in agriculture on 28 February 2023. The MoU opened doors for further bilateral relations in the future between the two countries. Mr. Cafiero also stressed that this agreement marks the beginning of a new era in international synergy. The MoU will create the opportunity to strengthen food security and bilateral trade. The minister emphasized the deep spiritual ties that exist between the two countries, and he predicted that this relationship would further strengthen the agricultural partnership. Mr. Cafiero emphasized the possibility of joint effort amongst different agricultural sectors, biotechnology, and tackling global issues like climate change. Potential areas of collaboration are also listed in the MoU and these include value chain development, post-harvest waste prevention, soil management, precision agriculture, irrigation management, climate-smart technologies, marketing of agricultural products, and good agricultural practices.

On 7 December 2023, another MoU was signed by the Agriculture Minister of Bangladesh and the and Argentina’s Minister of Economy. The agreement underlines that Bangladesh will receive technological assistance for smart agriculture, facilitating cost-effective imports.

Brazil

Bangladesh and Brazil have stepped up their involvement in global arenas, particularly in trade and investment since their bilateral trade has been growing more rapidly recently. Brazil wants to increase trade with Bangladesh because the country is on the verge of becoming a middle-income nation. Luiz Inácio Lula da Silva, the president of Brazil, has made the decision to fortify bilateral links, especially in commerce and investment with South Asian nations. To further develop bilateral trade with Bangladesh in May of 2023, a high-level trade delegation from Brazil traveled to Dhaka as part of that objective. On 25 May 2023, the Brazilian Embassy in Dhaka and the Brazilian Ministry of Foreign Affairs jointly organized the one-day Brazil-Bangladesh Trade Conference. During the event, Brazil shared interest in increasing its consumer market in Bangladesh.

In 2023, Bangladesh and Brazil agreed to cooperate to enhance their bilateral commercial relations. The two countries will also jointly work towards industry expansion through joint ventures. A MoU was signed in this regard, on February 1, 2023, by the Brazilian Trade and Investment Promotion Agency (ApexBrasil) and the Federation of Bangladesh Chambers of Commerce and Industry (FBCCI). In order to provide opportunities for boosting trade and expanding economic and industrial collaboration between the businesses and organizations of the two nations, the two trade associations will share information about the economic development of their respective nations. Such initiatives reflect the possibility for future synergy involving various sectors, including trade, investment, technology exchange, and industrial partnerships between both countries.

Bangladesh is stepping up efforts to improve agricultural cooperation between Bangladesh and Brazil as well as business association with Brazil and the three other Mercosur nations of Argentina, Paraguay, and Uruguay.  In an effort to get access to their market, the Bangladeshi government is also actively negotiating with the Mercosur nations, which may significantly increase Bangladesh’s total exports.

Mexico

Mexico, another South American country, considers Bangladesh as an important actor in South Asia and commends the country for its outstanding social and economic advancements over the years. Bangladesh also has reiterated its commitment to strengthening bilateral relations with Mexico and expressed excitement about the prospect of finding new avenues for partnership. Mexico has shown a strong interest in deepening its relationship with Bangladesh. There is presently a consulate of Mexico in Dhaka but no embassy as of yet. In 2023, Mexico was preparing to open an embassy in Dhaka because the Latin American country is keen to bolster diplomatic and trade ties given Bangladesh’s expanding economy and significance on the regional and international stages.

The Mexican ambassador to Bangladesh, Federico Salas, traveled to Dhaka and presented President Abdul Hamid with his credentials on 30 January 2023. He then discussed his thoughts and goals for the two countries’ bilateral relations and proclaimed that Mexico is making tangible choices to strengthen and expand the cooperation between the two nations. Mr. Salas also noted that fostering better connections requires both cultural and interpersonal interactions, and expressed his desire to bring Mexican cooks to Bangladesh to conduct week-long culinary experiences. Mexico is eager to expand trade with Bangladesh, namely in technology, agribusiness, and pharmaceuticals. Mexico is also committed to further strengthening links with Bangladesh, as demonstrated by the recognition and celebration of the close and developing friendship between the two countries.

Bangladesh and Latin American countries have traditionally maintained amicable interaction because of their shared historical experiences of decolonization as well as their cultural linkages and people-to-people connection, like the sheer passion Bangladeshi people show for the football teams of Argentina and Brazil during the World Cup.

With a per capita income of about USD 8,328 annually, Latin America has been gradually expanding its potential and is currently primarily an export center of sugar, bananas, coffee, linseed oil, copper, and iron ore. On the other hand, Bangladesh is renowned for being a hub for exporting ready-made clothing and apparel to the global market. Bangladesh is also currently a major center for the production of technology, finished leathers, textiles, medicines, and jute and jute products, a market lucrative for Latin American businesses. The nation’s economy was able to maintain a 7.5% GDP growth rate in the fiscal year 2022–2023 and Lain America would surely like to join in on the economic success Bangladesh has been showing.

In addition to Brazil, Argentina, and Mexico, other nations such as Venezuela, the Dominican Republic, Peru, Columbia, and some others have expressed interest in increasing collaboration in future projects bolstering economic ties. This could also lead to joint ventures in other domains. Mercosur is one of the biggest trading blocs in the world and currently has a combined GDP of over USD 2 trillion. Enhancing links with Mercosur could provide Bangladesh with access to a significant market in South America. This would contribute to the diversification of Bangladesh’s trade partners, reducing dependence on any single market. Bangladesh has traditionally been a major exporter of apparel, and the country has been working to diversify its export destinations beyond the conventional markets. Now, the country is successfully increasing its exports to Latin America, which suggests a positive outcome of the country’s efforts to tap into new markets.

Looking Ahead

Bangladesh’s efforts to diversify its markets and apparel shipments at competitive prices are leading the country toward becoming a significant export destination to Latin America. As some of the Latin American countries are opening embassies or are attempting to do so, this shows Bangladesh’s growing significance as an economic and political force.  This may encourage other Latin American countries to open embassies or consulates and forge both diplomatic and trade affiliations with Bangladesh. Despite some potential challenges such as regional distance, language barriers, national interests, and complexities in opening Letters of Credit (LC), Bangladesh’s continuous efforts to bolster bilateral ties would possibly further open new ways for collaboration. There are also opportunities to improve people-to-people bonding, advertise Bangladeshi products, and provide prospects for future investment through academic exchange in higher education between Bangladesh and Latin American nations.

In 2023, Bangladesh’s diplomatic ties with Latin American nations took on new dimensions. Given that every market in Latin America has a rising economy, Bangladesh has enormous potential there. Bangladesh has already been working to collaborate closely on several fronts, as reflected in its efforts in 2023. Both Bangladesh and Latin American countries are committed to working towards strengthening their national economies through mutual benefits and prosperity.

Series Editor
Delwar Hossain, PhD is Professor of International Relations, University of Dhaka, Bangladesh.

Contributor
Tahia Afra Jannati is a Research Intern at the KRF Center for Bangladesh and Global Affairs (CBGA).

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