Stronger bilateral trade with Russia needed

Russia expressed its interest to boost bilateral trade with Bangladesh. Bangladesh too has long been desperately trying to find a way of alternative payment because of SWIFT, an international trading system operated from Belgium, ban on Russia due to its invasion of Ukraine. Russia proposed to export food products, fuel and fertilizers through the Government-to-Government system.

It is good news for the country as Bangladesh taking this advantage can diversify its products. If this trade tie between the two countries, can be further bolstered Bangladesh can draw immense benefit out of the relationship. As Russia has one of the largest markets in the world Bangladesh can make the best use of it to strengthen its economy from exports.

At the same time, Bangladesh can have also access to the Russian market with its garment products as the Bangladesh apparel products have high demand in the Russian market. Russia is going to supply mainly food products like yellow peas, chickpeas, red lentils, green lentils and sunflower oil etc to Bangladesh. But what is more important we can meet our demand for Liquefied Natural Gas (LNG) as Russia is a gas-rich country in the world.

Russia has already proposed to supply gas to Bangladesh to meet its long-term energy need. At present, Bangladesh is importing LNG from Qatar and Oman. Even after importing LNG from those two countries, Bangladesh can’t meet the full demand for LNG for the country. Now, if LNG can be imported from Russia then the gas crisis can easily be solved at least for the time being.

What is more advantageous, if the trade can be expanded, is Russia will not only supply LNG it has also offered to export gas pipeline and other equipment to Bangladesh apart from investing for modernization of Ghorashal Unit-1 and Unit-2, the oldest power plants built during the Pakistan era. But all those can’t be materialized easily as there are some obstacles in the way of doing trade with Russia. The first obstacle is currency exchange as Russia can’t pay in dollar by using SWIFT system because of ban on the Russian banks. The ban was imposed on Russian banks after it had invaded Ukraine creating some complications in sending products directly from Bangladesh to Russia.

Instead of SWIFT as per the Russian proposal, how much currency swap will work, is a matter of concern. If the major obstacles can be overcome other can’t stand in the way of trades between the two countries. Again, the strong trade bond between the two countries can immensely help Bangladesh in its plan to establish 100 economic zones across the country. Russia in joint venture with Bangladesh can hugely invest in the fertilizer factories, fuel refineries, and leather processing factories, pharmaceuticals, tourism and LNG projects.

If LNG projects can be taken up in those economic zones in joint venture with Russia, Bangladesh in future doesn’t have to think about importing LNG from Qatar, Oman or Russia. The country can meet up its LNG demand from within the country. But if hyperinflation and economic volatility continue the bilateral trade may delay. Again, if the sanctions imposed upon the banks of Russia continue, it may also adversely affect what we are expecting from the trade tie.

Trades between the two countries will also suffer if SWIFT payment system can’t be reinstituted soon. If international market turmoil is over and if the sanctions on Russia are withdrawn, we can hope a better and stronger tie with Russia that will finally help both the countries in their trades and investments.