MALAYSIAN PM VISITS DHAKA FRIDAY

TDS Desk:

Despite a longstanding friendship, Bangladesh has failed to fully capitalise on the Malaysian market’s potential mainly due to the lack of strategic actions and product diversification, resulting in a significant trade deficit.

However, with Malaysian Prime Minister Anwar Ibrahim set to visit Dhaka Friday, experts are optimistic about new opportunities for increased bilateral trade and economic cooperation.

Economists and traders said Bangladesh has a scope of boosting its annual exports to $5 billion from the current $370 million.

Apart from garment products, Bangladesh can export other items, including halal food like meat, fish, mango and litchi, and skilled manpower, to Malaysia. Both countries can explore new avenues for collaboration in sectors like textiles, ICT, technology and agriculture, which can lead to increased economic growth on both sides, they added.

The experts said there are some challenges in trade, including tariff barriers, where Bangladesh’s exports to Malaysia remain static, leading to a trade imbalance. Non-tariff barriers (NTBs) complicate compliance with international standards, making it hard for Bangladeshi products to make penetration in the Malaysian market.

HUGE TRADE GAP

According to the Bangladesh Bank and Export Promotion Bureau (EPB), Bangladesh exported products worth $371.86 million to Malaysia while imported goods worth $3.5 billion in the 2022-23 fiscal year (FY23).

The figures were $337.81 million and $3.48 billion in FY22, $306.57 million and $1.58 billion in FY21, $236.38 million and $1.68 billion in FY20 and $277.22 million and $1.49 billion in FY19 respectively.

Bangladesh mainly exports garment products like T-shirts, trousers breeches, pullovers and jerseys, flour and meals to Malaysia. On the other hand, it imports mineral products, edible fats, chemicals, machinery and mechanical appliances, beverages, prepared foodstuffs, textile articles, electrical equipment and medical instruments, the data also showed.

Talking to the Daily Sun, Senior Professor of Finance and Investment at King AbdulAziz University in Saudi Arabia Dr Mohd Ma’Sum Billah said it is great news that the Malaysian prime minister is going to visit Bangladesh. “The visit may open up new opportunities for both countries in terms of trade and investments through bilateral understanding.”

He said it is the right time for Bangladesh to apply for the ASEAN membership as Malaysia is going to be the next chair of the bloc. Bangladesh may be considered ASEAN plus one to observe without voting power in future and may get the opportunity to be a full member which is dependent on the policy.

“Other than political and bilateral relations, diplomacy will boost bilateral relationship between Bangladesh and Malaysia further. There’s a lot of business opportunities,” Dr Ma’Sum Billah said.

Referring to the huge trade deficit, Dr M Abu Eusuf, executive director of Research and Policy Integration for Development (RAPID), said discussion on a bilateral agreement should be made to reduce the trade deficit. Besides, negotiations should be on the labour market so that Bangladesh can export more skilled and semi-skilled workers to Malaysia at a low cost without any hassle.

Eusuf, also former chairman of the Department of Development Studies at Dhaka University, said, “We can ink an agreement on education, particularly medical education. Agreements on bilateral trade and services should be inked to strengthen the relationship.”

Bangladesh Garment Manufacturers and Exporters Association (BGMEA) Director Mohiuddin Rubel said, “The purchasing power of the Malaysian people is good. We have the scope of reducing the trade gap by exporting our products if we pay attention to the market.”

“We need to increase our consultancy. We can arrange trade fairs, seminars, visits, and road shows in Malaysia to promote our products. Our embassy can help us here. Diplomatic communications should be strengthened. Business-to-business and government-to-government connectivity is important to explore the untapped potential,” he said.

BANGLADESH CAN BE A HUB OF HALAL MARKET

As a Muslim country, Bangladesh can earn around $5 billion in a year exporting different products, including halal foods such as fish, meat and other food items, to Malaysia, which imports such items in plenty from Thailand, India and Australia.

Bangladesh can be a hub of the halal market in the Middle East and South Asia region. Bangladesh should promote its products in Malaysia through arranging trade fairs, Dr Ma’Sum Billah said.

FDI OPPORTUNITY

Bangladesh-Malaysia Chamber of Commerce and Industry (BMCCI) President Shabbir A Khan said Bangladesh must focus on investment prospects showcasing its economic stability and growth potential to attract more Malaysian investment.

“We’re actively promoting Foreign Direct Investment (FDI) from Malaysia, which currently ranks the 8th largest investing country in Bangladesh. BMCCI’s recent engagement with SME Corporation in Malaysia aims to foster knowledge exchange and capacity building, which can strengthen Bangladeshi SMEs and diversify the export basket. Additionally, promoting Bangladesh’s Special Economic Zones and High-Tech Parks can present attractive opportunities for Malaysian businesses,” he added.

Shabbir also said encouraging the relocation of Malaysian sunset industries to Bangladesh could also stimulate the economic growth of Bangladesh. By emphasising these sectors and leveraging Malaysia’s expertise, Bangladesh can create a more conducive environment for investment.

Dr Ma’Sum Billah told the Daily Sun that many Malaysian investors are eager to invest in Bangladesh, which is opening a lot of sectors like power plants, industries, agro, real estate and transportation sectors.

ISLAMIC FINANCE

Malaysia is the top country in the world in Islamic finance activities. Bangladesh may maximise the opportunity with good collaboration with Malaysia. Islamic finances and products, Sukuk (Islamic bond or Sharia-compliant bond) market, mortgage market, Islamic digital currency and Islamic financing industry can be boosted, Dr Ma’Sum Billah said.

“The Malaysian PM’s visit may bring a stronger opportunity for the labour market of Bangladesh. Obstacles can be resolved through discussion. Unauthorised agencies and brokers can be eliminated,” he said.

The senior profession said Bangladesh has huge young people in the IT sector. “Malaysia can engage them to contribute to Malaysia. Malaysia has a good education system. Bangladesh can improve research and development at a cheap cost with collaboration.”

The BMCCI president said government policy support is essential to strengthen the trade relationship between the two countries. The growing trade deficit, driven by static exports and increasing imports, underscores the need for strategic actions.

One key approach is the establishment of a bilateral Free Trade Agreement (FTA). Such an agreement could facilitate better market access to Bangladeshi products in Malaysia.