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Navigating Bangladesh-UAE bilateral ties

Philip Sarker
19 Apr 2022 00:00:00 | Update: 19 Apr 2022 01:42:46
Navigating Bangladesh-UAE bilateral ties

Bangladesh and the United Arab Emirates (UAE), the twins of the 1980s, have recently celebrated the golden jubilee of their nationhood and independence. Since the inception of diplomatic ties in 1974, both countries have elevated their relations to new heights by reaping benefits from the decades-long bilateral ties. Now, both the states are opting to enhance their relationship towards a “Comprehensive Economic Partnership” to reap the untapped economic potential. And create a “win-win situation” based on mutual respect and shared interests. 

Glorious past

The foundation of the relations is historic as it was laid by the founding fathers of both states, Sheikh Zayed bin Sultan al Nahiyan of UAE and Bangabandhu Sheikh Mujibur Rahman of Bangladesh, in 1974. Both the leaders also shared a brotherly relationship and played a proactive role in the Non-Aligned Movement. They also shared many humorous events. One such event amid their historic visit is that, according to a media reports, 

“Sheikh Zayed bin Sultan al Nahiyan was happy to discover that he and Mujib were both Sheikhs. Bangabandhu grinned and told him that, “Yes, but there is a difference. You see, I am a very poor Sheikh.” Both men burst into laughter.” 

High-level visits are frequent, starting with the founding fathers. Bangabandhu visited UAE in 1974. Sheikh al Nahiyan again visited Bangladesh in 1984. The two nations signed bilateral agreements at different times. These include Cultural Co-operation Treaty in 1978, General Trade Agreement in 1984, avoiding double taxation and Protection Agreement in 2011 and Air Service Agreement in 2017. 

Impressive present

With about 88.52 per cent of the population made up of expatriates and immigrants, UAE holds the world’s highest net migration rate. According to the UAE Population Statistics 2022, about 7.5 lakh Bengalis in the UAE constitutes 7.4 per cent of the total population and are the third biggest resident community, following the Indians and Pakistanis. Notably, after the Kingdom of Saudi Arabia, UAE is the second-largest labour export destination for Bangladesh. After decades of people-to-people connection and cultural exchange between the societies, there is a robust Bengali diaspora community in the UAE. They are mostly SME businessmen, blue-collar jobholders, and skilled labourers. Bangladeshis are going to UAE as nigrant workers and sending back a handsome amount of remittance. 

On the other hand, the bilateral trade between the states’ currently stands at $1.5 billion, which is projected to reach $2 billion by 2024 and is expected to reach $10 Billion by 2030. However, apart from bilateral trade, UAE stands out as the fifth largest foreign investor in Bangladesh, which amounts to more than $2.5 billion. In addition, UAE is one of the largest project loan providers for Bangladesh. Apart from Trade and Investment, the UAE also actively assists in Bangladesh’s Rohingya crisis and supports Bangladesh’s stance.

The tipping point

The recent visit of Bangladesh Prime Minister Sheikh Hasina marks Hasina’s fourth visit to the Gulf country. And this indicates the robust affirmation to deepen the bilateral ties is well underway from both sides. During the March visit, Bangladesh and the UAE had inked four Memoranda of Understanding (MoUs), following a one-on-one meeting between the two heads of the states at Dubai Exhibition Centre, in a bid to intensify cooperation in the field of higher education, scientific research, diplomatic training, trade, and other sectors. 

Both leaders agreed to increase the frequency of Emirates flights to facilitate the seamless and uninterrupted connectivity and movement of goods and passengers between the countries. The most significant outcome of Sheikh Hasina’s visit was the push for investment and collaboration in agriculture and food security, renewable energy, innovation, and technology, focusing on IT and ITES to elevate the relationship to a comprehensive partnership. Another MoU to inaugurate the Joint Business Council was also signed between the business communities of UAE (Dubai International Chamber) and Bangladesh (FBCCI). In compliance with the agreement, Bangladesh Business Council (BBC)-Dubai will help establish an FBCCI trade center in Dubai. The concerned ministers also discussed protection of labor rights and controls and mechanisms of labor recruitment. 

Outlook for the future

The UAE owns the world’s third-largest sovereign fund, namely Dubai Investment Authority. Bangladesh is a ‘Frontier Five’ economy with a facilitative policy regime that is friendly to foreign investment, prioritizes investment security, and promises high profitability. Moreover, Bangladesh has various schemes and sectors to invest in, including connectivity projects, infrastructure, Special Economic Zone (SEZ), Export Processing Zone (EPZ), High Tech Parks, and Tech hubs. Hence, Bangladesh has the potential to become the ‘Investment Hub’ in South Asia. Meanwhile, UAE is already in talks with Bangladesh to invest in an SEZ, which is projected to start in 2023. Stating the potentiality of the nearly 170 million huge customer base in Bangladesh, Prime Minister Sheikh Hasina Hasina stated, “We are ready with both policy and infrastructure support to ensure that investors choosing to make Bangladesh their home shall find only the best in the world.”

For the mounting demand for fuel in power generation, industrial production, and the associated infrastructure development plans, the financial cost for imported LNG was about 6500 crore taka in FY21. Amid the changing global and domestic scenario perspective, Bangladesh is set to become a significant LNG importer in Asia in the coming days. Reciprocally, UAE is OPEC’s third-biggest oil producer, and it exports a substantial amount of natural gas, which is about 40 per cent of its total export, in the form of LNG. UAE and Bangladesh should explore to accomplish the existing demand-supply gap under a term deal instead of a spot market deal.

Shifting from oil-reliant to a more diversified, preferably tourism and knowledge-based economy, the UAE has enacted dynamic liberal policies. The country has attracted human resources and industries, preferring technology and novelty, to propel the economic momentum. As enjoying the demographic dividend era, Bangladesh is currently focused on transforming itself into a manufacturing-based economy. Being the world’s second-largest source of freelancers, according to Oxford Internet Institute and top-most RMG manufacturer, Bangladesh could be befitted with UAE’s future demands and yearnings.

In conclusion, the twins of 1980s — Bangladesh and the UAE — has made significant strides to expand their diplomatic ties by renovating the bilateral relations, development opportunities and shared future based on reciprocity and mutual interest and vowed to reboot their collaboration into new contours to serve the development goals of both nations in the coming days.

 

The writer is an independent researcher.

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