How Did Bangladesh and the US Maintain Their Bilateral Relationship in 2023?

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Since the United States recognition to Bangladesh’s independence in April 1972, the two countries have maintained cordial ties. The rapport between the two countries has been progressively strengthening, culminating in the 2022 celebration of the diplomatic ties’ golden jubilee. Bangladesh now identifies the United States as the biggest partner in its energy sector, the biggest supplier of foreign direct investment (FDI), and the biggest market destination for its ready-made garments (RMG).

The United States Agency for International Development (USAID) is working in Bangladesh working in the food security arena and is also running the largest program of its kind in Asia. Furthermore, it is actively involved in supervising a “hefty humanitarian aid portfolio in Bangladesh triggered by the Rohingya issue.” The United States has long had widespread support from the people of Bangladesh which saw an increase during the pandemic when the country received over 100 million doses of vaccine from the United States, which was crucial to the country’s nationwide inoculation effort.

While ties between the two countries have always been cordial since 1971, the news of US sanctions on the Rapid Action Battalion—a specialized security unit—in December 2021 and the US visa restrictions regarding political individuals caught everyone by surprise and quickly became the dominant story in Dhaka in 2023, particularly before the 12th national elections of Bangladesh. Nevertheless, what mattered was that Dhaka’s officials reacted by strengthening diplomatic rapport with Washington. South and Central Asian Affairs Assistant Secretary Donald Lu commended Bangladesh on its “tremendous progress” in this area.

However, when it comes to liberal values, climate change, the repatriation of Rohingya people, and the fight against terrorism, both nations have common ground. Furthermore, when it comes to the ethnic expulsion of the Rohingya, the US and Bangladeshi authorities exhibit similar views. In regards to Ukraine, Bangladesh also stays politically neutral and follows US values of liberal internationalism.

Several conversations and cooperative training initiatives have taken place throughout the last two years, clearly indicating an increase in collaboration among countries. Following a hiatus caused by the pandemic, the Partnership Dialogue and Security Dialogue between the United States and Bangladesh resumed in 2022 and 2023. Since 2012, the nations have made it a yearly tradition to conduct these conversations. During the International Fleet Review in Bangladesh in December 2022, the United States Navy was also present. Along with the 9th Security Dialogue between Dhaka and Washington held in September 2023, there were significant aspects such as the growing aid from the USAID and the collaboration in the education sector that bolstered the bilateral rapport. Despite the notable developments, some divergences increased making the further push for cooperation very necessary.

Collaboration in Defense and Security Sectors

The Ninth U.S.-Bangladesh Bilateral Security Dialogue took place in early September in Dhaka, with Bangladesh Director General (North America) of the Ministry of Foreign Affairs, Khandker Masudul Alam, and Deputy Assistant Secretary of State for Political-Military Affairs, Mira Resnick serving as chairs. According to the U.S. Department of State, the discussion, which was initiated in 2012, demonstrates an increasing security partnership with Bangladesh and a mutual commitment to stability and growth in the South Asian region. Among the many subjects discussed at the Security Dialogue were the 12th national elections in Bangladesh, security aid, defense trade and cooperation, the Indo-Pacific strategy of the United States, and the future of Bangladesh in the region.

Along with more conventional security concerns, the parties also spoke about transnational crimes, energy independence, and climate change. Reiterating its “zero-tolerance” stance against terrorism, Bangladesh stressed the need for ongoing collaboration in the fight against violent extremism and terrorist acts. In this regard, a representative for the US foreign ministry said that the US commended Bangladesh for housing over one million Rohingyas and pledged to continue standing with Bangladesh in providing humanitarian aid. However, the purpose of the 9th Security Dialogue was to assess the current status of defense ties, identify problem areas, and plan for future collaboration. From that perspective, by talking to each other, both Bangladesh and the U.S. would be able to jointly respond to regional and global challenges more effectively in the future.

Rohingya Issue

In January 2023, the U.S. through the Agency for International Development (USAID) allocated $75 million in emergency funding to support vulnerable Rohingya refugees in Cox’s Bazar and the host community. This assistance aimed to address the escalating expenses of food and fuel and meet their needs. In a similar vein, an additional $23.8 million in humanitarian aid from the US was sent to Bangladesh by USAID in order to meet the immediate nutritional needs of Rohingya refugees. Similarly, in September, the U.S. committed to sending a total of $116 million in extra emergency aid to Burma, Bangladesh, and neighboring nations to help the Rohingya people. This also includes $74 million to help Rohingya refugees and the communities that are hosting them.

Furthermore, in December, USAID declared an extra $87 million to help the Rohingya refugees and the host communities, particularly in the districts of Bhasan Char and Cox’s Bazar. With these grants, since August 2017, when more than 740,000 Rohingya fled from Rakhine State in Burma for safety in Bangladesh, the U.S. has granted a total of over $2.4 billion in assistance to Bangladesh, Burma, and the region. Of this total, roughly $1.9 billion has gone toward helping Rohingya refugees and host communities in Bangladesh. Along with supporting mitigation of disaster risks initiatives in partnership with the UN World Food Program (WFP), the funds are also expected to go toward much-needed food and nutrition aid, infrastructure repair for refugee camps, and more.

Collaboration in the Education Sector

The population of Bangladeshi students pursuing education in the United States has grown by over 300 percent in the last ten years. According to the Open Doors Report on International Educational Exchange 2023, the number of students in the 2011-2012 school year was only 3,314, while in the 2022-2023 academic year, the number has increased to 13,563. In addition, Open Doors reported that “the current number of Bangladeshi students enrolled in US educational institutions has reached a record level”.

Figure 1: Open Doors Data- 2023 about Bangladeshi students in the USA. Source: Open Doors. The design is borrowed from the Daily Star.

Also, the Open Doors Report stated that the current (2023) Bangladeshi students in the US have increased by 28 percent compared to the prior academic year (2021-2022), making it one of the greatest growth rates in an academic year globally. Moreover, in the 2023 academic year, the enrollment of Bangladeshi undergraduate pupils saw a surge of over 50 percent, reaching a total of 2,500 students. Bangladesh ranks sixth globally in terms of the number of its graduate students enrolled at American universities, with about 10,000 students currently pursuing their degrees there.

Trade and Economic Relations

With regard to the economy, Bangladesh and the US have a mutually dependent relationship that is quite intricate. The growth of bilateral trade has been remarkable, with a staggering increase to US$13 billion in 2022. Bangladesh received FDI worth USD 3.48 billion in fiscal year 2022, while exports to the US reached $10.42 billion, making up 17.57% of total export earnings. With the rapid growth of trade, the US has now become Bangladesh’s third-biggest trading partner, following China and India. The US remained the primary destination for the country’s RMG exports, with a total worth of $46.6 billion in 2022. As the biggest investor in Bangladesh’s energy industry, third-largest trade partner, and market for Bangladesh’s RMG, the United States is an essential ally for the country’s economic and infrastructure growth. However, it is also worth noting that the United States holds a significant position as one of the notable investors in Bangladesh’s energy sector, as well as being the primary source of overall FDI.

In late 2022, by celebrating 50 years of bilateral rapport, the President of the United States, Joe Biden, acknowledged the enduring partnership between the United States and Dhaka, and praised Bangladesh’s remarkable economic achievements over the previous five decades as an “amazing narrative.” Biden said, “I express my desire for our nations to continue addressing pressing matters such as climate change, refugees, and maritime security.” “We prioritize your accomplishments and advocate for the unrestricted participation and contribution of all individuals towards the development of their country,” he added.

Similarly, with the same spirit Bangladesh-US bilateral economic relations in 2023 also experienced some citable progress. During October 2023, the United States exported goods for a total of $168M and received $655M from Bangladesh. During the period from October 2022 to October 2023, there has been an important boost in the exports of the United States, with a rise of $1.41M (0.85%) from $166M to $168M. Conversely, imports have experienced a significant decrease of $-385M (-37%) from $1.04B to $655M.

In September, the US and Bangladesh had their seventh TICFA (Trade and Investment Cooperation Forum Agreement) Council meeting. The purpose of the meeting was to discuss trade and investment cooperation between the two countries. Brendan Lynch and Tapan Kanti Ghosh, the respective secretaries of the United States Trade Representative’s office for South and Central Asia and the Bangladesh Ministry of Commerce, co-chaired the meeting. Various government representatives from the areas of commerce, labor, IP, and others were present in both delegations.

The US and Bangladesh covered a lot of ground at the TICFA Council meeting, touching on reforms to labor laws, investment climate regulations, digital trade laws, intellectual property implementation and protection, and agricultural collaboration between the two countries. Through the meeting, the US acknowledged that Bangladesh has made some steps to remove barriers that employees encounter when registering labor organizations, but it has emphasized the need for a fair and simplified trade union registration procedure that permits applications to be filed within the stipulated time limit. The US also asked Bangladesh to increase funding for inspections of labor and implementation.

Challenges: Election, Sanctions, and Visa Restrictions

In addition to the sound advancements in 2023, the bilateral rapport has undergone some challenges as well. In May, U.S. Secretary of State Antony Blinken unveiled a policy under Section 212(a)(3)(C) that granted the authority to refuse visas to political individuals in Bangladesh who were found to be engaged in activities that impede the conduct of fair and open elections and compromise the democratic process. In this respect, Uzra Zeya, the US Under Secretary for Civilian Security, Democracy, and Human Rights, said that the United States aimed to assist Prime Minister Sheikh Hasina’s public demands for elections that would be free and fair and conducted in a peaceful way.

In September 2023, the United States initiated visa bans on Bangladeshi officials who were identified as having undermined the democratic election procedures in Bangladesh. Although the sanctions covered a wide range of individuals, including opposition members, law enforcement agencies, the judiciary, and security forces, the ruling party perceived itself as the primary focus. In a critical move, the Biden administration excluded Bangladesh from the “Summit for Democracy” events in 2023. Intriguingly, Pakistan, which ranks lower than Bangladesh on several democracy indexes such as the Freedom in the World Index of the Freedom House and the Democracy Index of the Economist Intelligence Unit, was extended an invitation that might be gauged critically.

Notwithstanding, during the ongoing discussion on visa limitations pertaining to the elections, data provided by the Department of State indicated a substantial rise in the issuance of visas by the United States for individuals from Bangladesh. According to statistics from the State Department’s Bureau of Consular Affairs, the number has exceeded 59,000 in the 2022-23 period and was projected to reach 60,000 by the end of the year 2023.

Contrary to the speculation of many analysts within the country, Bangladesh was not included in the list of US sanctions enforced during Human Rights Day, following the December edition of 2023. In a move that reflects a state of the US assertion of competency through soft power, the Departments of State and the Treasury have taken decisive action by imposing restrictions on visas and sanctions on 37 political individuals across 13 countries. On December 10, the United States observed Human Rights Day and commemorated the 75th anniversary of the adoption of the Universal Declaration of Human Rights by implementing measures to ensure accountability for abuses and misconduct of human rights across the globe. Therefore, in the list, the US notably included political individuals from South Sudan, the Taliban, Iran, and China.

Future Directions

Notwithstanding these distinctions, the United States continues to play a pivotal role in Bangladesh’s economy and development. This is especially true given the country’s ambitious goal of moving up the Least Developed Country rankings to upper middle income by 2026. Also, since the Bangladeshi market is so welcoming to American businesses, more and more American companies, allies, and collaborators are looking to invest there. The US regards Bangladesh as the “centerpiece of its Indo-Pacific Strategy” because of the country’s rising economic power and strategic location on the Bay of Bengal, which is an essential component of the Indo-Pacific region.

It is quite probable that bilateral trade and investment would expand in the next years due to Bangladesh’s ‘tiger economy’ and favorable investment atmosphere. The information and communications technology sector is Bangladesh’s ‘thrust’ industry, and the country is seeking investment from the United States to help it grow. Undoubtedly, this will broaden the scope of American investment in Bangladesh.

Taken together, the small scale of the sanctions indicates that the conflicts of late are not long-lasting and will not have a significant influence. Aside from the disagreements, the two countries share common goals, which will further deepen as their political and economic spheres of influence merge. In this regard, diplomatic involvement and the strengthening of ties might be useful. The relationship has been transformed because of the constructive reciprocal diplomatic visits that have taken place over the last two years. This needs to keep going with a sound spirit from both sides.

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

Contributor
Kawsar Uddin Mahmud is a Research Intern at the KRF Center for Bangladesh and Global Affairs (CBGA).

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