In 2024, the bilateral relationship between Bangladesh and South Korea reached new heights, marked by increased cooperation in key areas such as trade, investment, infrastructure development, and cultural exchange. Both nations demonstrated a shared commitment to strengthening economic ties, with South Korea emerging as a crucial partner in Bangladesh’s development journey. From enhanced trade volumes and technological collaborations to growing people-to-people connections, the partnership has showcased significant achievements and promising trends. This overview delves into the milestones of their engagement, highlighting the progress made and the potential for further deepening ties in the years ahead.
Achievements in 2024
Trade and Economic Partnership
Bilateral trade between Bangladesh and South Korea achieved remarkable growth in 2024, surpassing the $3 billion mark. This milestone highlighted the strength of their economic relationship, with South Korea maintaining a trade surplus. Bangladeshi exports to South Korea primarily consisted of ready-made garments (RMG), footwear, and knitwear, underscoring the country’s competitive edge in labor-intensive industries. On the other hand, South Korea’s exports to Bangladesh included machinery, electronics, and refined petroleum products, reflecting its technological and industrial strength. This mutually beneficial trade pattern reinforced the interdependence of the two economies.
A pivotal development in their economic relationship was the progress made on an Economic Partnership Agreement (EPA). This proposed agreement is expected to address existing trade imbalances while fostering the expansion of bilateral trade. Through the EPA, South Korea aims to provide preferential market access for Bangladeshi products, a critical initiative as Bangladesh transitions from its Least Developed Country (LDC) status in 2026. The agreement signifies South Korea’s long-term commitment to supporting Bangladesh’s economic transformation by ensuring that the loss of LDC-related trade benefits does not hinder its export growth.
Additionally, the EPA reflects broader strategic goals for both countries. For Bangladesh, it provides a pathway to diversify its export base and enhance its competitiveness in global markets. For South Korea, it offers opportunities to deepen its economic footprint in South Asia and strengthen supply chain linkages. The potential benefits of this partnership extend beyond trade, with the EPA poised to create a foundation for increased investment and joint ventures in key sectors such as manufacturing, energy, and technology. This development underscores a shared vision of sustainable economic growth and deeper bilateral cooperation.
Infrastructure Development
In 2024, South Korea reaffirmed its commitment to supporting Bangladesh’s infrastructure development by pledging a substantial $6 billion in financing through the Economic Development Cooperation Fund (EDCF). This funding, allocated for the period 2023 to 2027, aims to facilitate transformative infrastructure projects that will significantly enhance Bangladesh’s connectivity and economic potential. Among the key projects are the Rail-cum-Road Bridge at Kalurghat in Chattogram and the ambitious Meghna Bridge project, both of which are expected to improve regional transportation networks and boost trade efficiency. These initiatives highlight South Korea’s role as a vital development partner in addressing Bangladesh’s critical infrastructure needs.
Additionally, the collaboration between the two countries extended into Public-Private Partnership (PPP) initiatives, reflecting a growing emphasis on inclusive and sustainable development. The 5th Joint PPP Platform meeting served as a crucial forum for identifying and advancing key projects. One such project is the Bangabandhu Sheikh Mujib Shilpa Nagar (BSMSN) water supply system, a critical infrastructure endeavor aimed at supporting the industrial growth of the country’s largest economic zone. The project underscores the importance of integrating private sector expertise and investment with public sector goals, ensuring that infrastructure development meets the demands of both industrial and urban growth.
The focus on PPP models not only facilitates resource mobilization but also encourages innovation and efficiency in project execution. South Korea’s active participation in these initiatives aligns with its broader strategy of fostering sustainable and inclusive growth in partner countries. By leveraging its technical expertise and financial resources, South Korea is helping Bangladesh develop resilient infrastructure that will drive long-term economic progress and enhance its regional connectivity. This partnership is a testament to the deepening ties between the two nations and their shared vision of a prosperous and interconnected future.
Development Cooperation
In 2024, South Korea demonstrated its unwavering commitment to Bangladesh’s socio-economic development by providing a $100 million soft loan under the “Second Strengthening Social Resilience Program.” This initiative is designed to reinforce Bangladesh’s social protection systems and enhance the country’s capacity to address socio-economic challenges. The funding targets critical areas such as poverty alleviation, social welfare, and economic inclusion, aiming to improve the quality of life for vulnerable populations. By strengthening these systems, the program ensures that Bangladesh can better withstand economic shocks and foster sustainable growth.
In parallel, the Korea International Cooperation Agency (KOICA) took significant steps in advancing skill development through a Tk117 crore agreement. This initiative is focused on creating a skilled workforce tailored for overseas employment, addressing the growing demand for Bangladeshi workers in various sectors abroad. By equipping citizens with specialized skills and technical training, the program enhances their employability and boosts Bangladesh’s remittance-driven economy.
The emphasis on skill development aligns with Bangladesh’s broader goals of diversifying its economic base and expanding its global labor market footprint. Through this partnership, South Korea not only contributes to the immediate socio-economic welfare of Bangladesh but also supports its long-term vision of creating a resilient and skilled workforce. These initiatives highlight the deepening cooperation between the two nations in fostering human capital development and promoting sustainable socio-economic progress.
Investment Growth
In 2024, South Korea reinforced its position as the fifth-largest foreign investor in Bangladesh, with a strong presence in the ready-made garments (RMG) sector. Over 200 Korean companies operated actively within the country, collectively employing more than 150,000 workers. This extensive economic collaboration highlights South Korea’s significant role in driving Bangladesh’s industrial growth and generating employment opportunities. Korean investments have not only bolstered the RMG sector but also contributed to Bangladesh’s export competitiveness in global markets.
To further diversify its investment portfolio, South Korea explored opportunities in emerging sectors such as information and communication technology (ICT), pharmaceuticals, shipbuilding, light engineering, and agriculture. These discussions indicate a broadening of the bilateral investment landscape, moving beyond traditional industries to embrace high-potential, innovative sectors. Such diversification reflects the shared ambition of both nations to foster sustainable economic growth and strengthen their economic partnership.
Cultural and Educational Exchange
The cultural and educational ties between Bangladesh and South Korea deepened in 2024, marked by an increase in scholarship opportunities for Bangladeshi students pursuing higher education in South Korea. These initiatives provided young Bangladeshis with access to world-class education, fostering a new generation of skilled professionals equipped to contribute to both countries’ development.
Additionally, the continuation of the Employment Permit System (EPS) facilitated the employment of Bangladeshi workers in South Korea, particularly in sectors such as agriculture and fisheries. This program not only offered economic opportunities to Bangladeshi workers but also strengthened people-to-people connections between the two nations. These cultural and educational exchanges play a crucial role in fostering mutual understanding, promoting cultural diversity, and enhancing the bilateral relationship on a grassroots level. Through these efforts, the partnership between Bangladesh and South Korea continues to evolve, driven by both economic and human connections.
Trends in 2024
Transition from Aid to Strategic Partnership
As Bangladesh approaches its anticipated graduation from Least Developed Country (LDC) status in 2026, the bilateral relationship with South Korea has entered a transformative phase. South Korea is shifting its role from being a traditional aid donor to becoming a strategic investor and cooperative partner. This transition underscores a shared vision for long-term, sustainable development. The ongoing Economic Partnership Agreement (EPA) negotiations exemplify this evolving dynamic, aiming to foster deeper economic ties and ensure preferential access for Bangladeshi products even after the LDC graduation. This trend reflects both nations’ commitment to establishing a more equitable and mutually beneficial relationship, emphasizing strategic collaboration over traditional development assistance.
Focus on Infrastructure
Infrastructure development has emerged as a cornerstone of the Bangladesh-South Korea partnership in 2024. South Korean companies have been instrumental in the timely execution of major infrastructure projects, including the Kalurghat Rail-cum-Road Bridge and the Meghna Bridge. These initiatives are pivotal in enhancing Bangladesh’s connectivity and fostering economic growth. Additionally, both countries have explored new ventures through Public-Private Partnership (PPP) arrangements, such as the development of the Bangabandhu Sheikh Mujib Shilpa Nagar (BSMSN) water supply system. The focus on infrastructure not only supports Bangladesh’s development goals but also solidifies South Korea’s position as a key player in the nation’s economic transformation.
Export Diversification
Export diversification has been a strategic priority for Bangladesh in its efforts to reduce dependency on the ready-made garments (RMG) sector. In 2024, both Bangladesh and South Korea worked to broaden the range of traded goods, with Bangladesh actively exploring opportunities to export pharmaceuticals, leather goods, and agricultural products. This diversification strategy aligns with Bangladesh’s broader economic goals of enhancing export resilience and tapping into South Korea’s demand for high-quality, cost-effective products. These efforts highlight the progressive economic planning of both nations, aiming to create a more balanced and diverse trade relationship.
Addressing Trade Imbalance
While bilateral trade between Bangladesh and South Korea has shown robust growth, addressing the persistent trade imbalance remains a key focus. By November 2024, Bangladesh’s exports to South Korea had surged by 45.9% year-on-year, a testament to the concerted efforts in boosting Bangladeshi export volumes. These gains have been driven by a combination of government incentives, private sector initiatives, and South Korea’s commitment to providing greater market access. The steady reduction of the trade deficit not only strengthens economic ties but also fosters confidence in achieving a more balanced trade partnership, benefiting both countries in the long run.
Future Prospects
Strengthening Trade Relations
The successful conclusion of the Economic Partnership Agreement (EPA) is anticipated to be a game-changer for Bangladesh-South Korea trade relations. By providing enhanced market access for Bangladeshi goods, particularly in the post-LDC graduation era, the EPA will help reduce trade imbalances and foster a more equitable trading framework. Furthermore, it is expected to encourage significant South Korean investments in high-value sectors such as information and communication technology (ICT), green energy, and advanced manufacturing. This strategic alignment in trade and investment will position both nations for sustained economic growth, with a focus on innovation and value addition.
Expanding Infrastructure Collaboration
South Korea’s involvement in Bangladesh’s infrastructure development is poised to grow further, especially through projects financed under the Economic Development Cooperation Fund (EDCF). Upcoming initiatives such as the construction of new bridges, highways, and urban development projects will reinforce Bangladesh’s connectivity and economic integration within South and Southeast Asia. These collaborations will not only enhance the country’s physical infrastructure but also create opportunities for employment and skill development, driving Bangladesh’s urbanization and industrialization efforts.
Technology Transfer and Skill Development
South Korea’s advanced technological expertise is set to complement Bangladesh’s growing industrial base and youthful workforce. Targeted initiatives in technology transfer and skill development will empower Bangladeshi workers to excel in high-demand sectors such as ICT, shipbuilding, and renewable energy. This collaboration aligns with Bangladesh’s broader development goals, helping to modernize its industrial capabilities and ensuring its workforce is well-equipped to meet the demands of a globalized economy.
Climate Change Cooperation
As both nations recognize the urgent need to address climate change, future partnerships will likely focus on joint efforts in renewable energy projects, carbon trading schemes, and sustainable urban planning. These initiatives will not only contribute to global climate goals but also enhance Bangladesh’s resilience to climate impacts such as rising sea levels and extreme weather events. By sharing technological innovations and expertise, South Korea and Bangladesh can jointly develop sustainable solutions, fostering a partnership that prioritizes environmental sustainability.
People-to-People Ties
Cultural and educational exchanges are expected to deepen, with South Korea expanding scholarship programs for Bangladeshi students and continuing its Employment Permit System (EPS), which facilitates labor migration. These initiatives strengthen people-to-people connections, fostering mutual understanding and cultural exchange. As more Bangladeshi workers and students engage with South Korea, the ties between the two nations will grow stronger, creating a solid foundation for enduring friendship and collaboration.
In conclusion, 2024 marked a transformative year for Bangladesh-South Korea relations, with notable progress in trade, infrastructure, and skill development initiatives. These achievements underscore the growing mutual trust and shared vision between the two nations. Moving forward, both countries are well-positioned to strengthen their partnership through key frameworks such as the Economic Partnership Agreement (EPA) and expanded cooperation in emerging sectors like ICT, renewable energy, and technology transfer. This strategic alignment reflects a mutual commitment to fostering sustainable economic growth and achieving long-term socio-economic development goals.
– S. M. Saifee Islam is a Research Associate at the KRF Center for Bangladesh and Global Affairs (CBGA).
