Former Senior Vice President, International Strategy and Global Initiatives and South Asia, U.S. Chamber of Commerce
Former Director, U.S.-Bangladesh Business Council, U.S. Chamber of Commerce
Former Director, Energy, Environment and Infrastructure, U.S.-India Business Council, U.S. Chamber of Commerce
May 07, 2022
On April 4, 1972, the US government's principal officer in Dhaka, Herbert Spivack, delivered a landmark message to Bangladesh’s Prime Minister Sheikh Mujibur Rahman that formally initiated diplomatic relations between the United States and Bangladesh—and with it, a consequential partnership defined by the shared pursuit for global security, a sustainable future, and human development.
Celebrating 50 years of diplomatic relations this month, the US-Bangladesh partnership is strong as ever.
This year, the US Under Secretary of State for Political Affairs Victoria Nuland and Assistant Secretary for South and Central Asian Affairs Ambassador Donald Lu visited Dhaka for the eighth edition of the bilateral partnership dialogue, and Foreign Minister Dr AK Abdul Momen met with US Secretary of State Antony Blinken in Washington, DC.
This summer, we expect to see the continuation of the High-Level Economic Consultation between Under Secretary for Economic Growth, Energy and the Environment Jose Fernandez and the Bangladesh Prime Minister’s Advisor for Private Investment Salman F Rahman.
The Biden Administration is also working with industry to forge a new Indo-Pacific Economic Framework (IPEF), allowing Bangladesh and the United States to collaboratively design an ambitious agenda to promote economic growth and access to the region’s immense economy.
Bangladesh’s economy has shown significant resilience, especially in the last two years, with various stimulus packages, a business-focused reform agenda that included progress towards digitization of tax payments and building the single-window system for investment.
In the Indo-Pacific, Bangladesh must leverage its geostrategic position as a trade hub to become the definitive connector of the economies of South and Southeast Asia.
Amid tremendous growth, Bangladesh has acted on efforts to make the economy an even more attractive investment destination, like digitizing administrative clearances, transparent procurement practices, and advancing a consultative policy environment adhering to international standards.
With this anniversary providing a renewed focus on the US-Bangladesh relationship, we have the opportunity to advance an ambitious economic agenda to enable greater strategic cooperation and develop partnership initiatives in digital trade, energy transition and sustainability, and financial inclusion.
Here are a few areas of initial engagement that can help set the right spirit and trajectory:
Establish a permanent foreign commercial service presence in Bangladesh
With over 70 offices across the world, the US Department of Commerce’s Foreign Commercial Service (FCS) connects US companies to global markets, provides market research, and helps firms navigate shipping, logistics, and commercial issues.
The Office of the US Trade Representative reported that total US exports to Bangladesh increased by 438% over the past decade, and US agriculture exports to Bangladesh reached $1 billion, a $135% increase since 2011.
To enable continued growth in the trade partnership across sectors, the International Trade Administration, which oversees FCS, should establish a presence at the US Embassy in Bangladesh, providing small and medium US businesses powerful tools to engage with one of the world’s fastest growing economies.
Promote industry consultation and collaboration
The Trade and Investment Cooperation Forum Agreement and the recently launched high-level economic consultation should institutionalize greater industry consultation, resolve any critical trade and investment challenges for incumbent and new investors, and identify new growth frontiers as Bangladesh transitions out of the United Nations Least Developed Countries list in 2026.
Losing certain global trade and development provisions, it will be ever more important to reduce trade barriers, create a strong framework to protect innovation, and design a concrete path forward on how US-Bangladesh trade can grow based on private sector input.
Elevate Digital Bangladesh 2.0 and the transition to cashless society
Boasting over 180 million mobile subscribers, the 5th largest internet user population in the Asia Pacific, and a robust national digital identity system, Bangladesh boasts a successful digital ecosystem that successfully delivered during the vaccine distribution program and can improve access to the global market.
By adopting strong and globally aligned regulatory frameworks in digital governance, Bangladesh can continue its technological leapfrog, rapidly expand digital trade and recognize free cross-border data flows that enable Digital Bangladesh 2.0, and promote the growth of industries like media and entertainment and digital education services.
Parallel to these efforts, US industry can support the initiative to transform Bangladesh into an inclusive cashless society.
We can and should launch a public-private campaign for a “Year of Digital Payments and Fintech for Growth” to promote the adoption of fintech and digital payments, increase access to digital infrastructure for small and medium businesses, and incorporate the disconnected into the formal financial ecosystem.
This would be well aligned with supporting a regulatory sandbox for fintech development in Bangladesh.
Comprehensive energy cooperation and sustainable energy transition
In March 2022, Bangladesh reached 100% electrification, a generational achievement that will power sustainable economic growth through the century.
In addition to investing in next generation clean energy technology, US industry can supply the transition fuels necessary for Bangladesh to continue its decarbonization objectives.
Bangladesh can meet its energy demand through long-term term planning on its use of liquified natural gas, which delivers lower environmental impact and carbon intensity.
Projections in Bangladesh’s 8th Five Year Plan estimate that Bangladesh’s demand for natural gas could reach as much as 8.35 billion cubic feet per day in 2040-41.
As international investors and industry players eagerly await Bangladesh’s revised master power plan, US and Bangladeshi energy companies can contribute to a robust bilateral energy discussion on best practices, energy planning workshops, and two-way trade missions on energy subsectors.
A private-sector led US-Bangladesh energy taskforce, launched by Prime Minister Sheikh Hasina in 2021, can help focus the recommendations to the two governments.
A promising path forward
As the United States crafts IPEF as a continuation of the White House’s Indo-Pacific strategy, it has a strong partner in Bangladesh. Celebrating 2022 as the 50th year of US-Bangladesh relations gives us the opportunity to revitalize the economic partnership between the two countries, deepen bilateral trade and a digital economic growth agenda, invest in a bold energy transition, and leverage industry and investment to power the future.
Nisha Biswal is president, US-Bangladesh Business Council, and SVP, South Asia, Global Initiatives and International Strategy, US Chamber of Commerce. Sidhanta Mehra is director at US-Bangladesh Business Council, and the US Chamber of Commerce
About the authors
Nisha Biswal is senior vice president for International Strategy and Global Initiatives and South Asia.
Sidhanta Mehra is the Director for the U.S. Chamber of Commerce’s U.S.-Bangladesh Business Council as well as the Director for U.S.-India Business Council’s Energy, Environment and Infrastructure vertical.