Category: GARMENTS
Country: Bangladesh
Region: Asia
Interview by BTT
29th October 29, 2023 4:04 PM
Bangladesh is a good and long-standing partner of Russia in South Asia. Diplomatic relations between the USSR and Bangladesh were established on January 25, 1972, and have continued with Russia being the successor state to the Soviet Union. A few months back Russia approved a list of more than 30 friendly and neutral countries which includes Bangladesh as the country’s banks and brokers will be allowed to trade on the Russian currency as well as derivatives markets.
In FY23, Bangladesh’s exports to the promising market of Russia experienced a significant decline of 27.87 percent compared to the previous year, primarily due to the ongoing Russia-Ukraine war. However, both nations are putting a lot of effort into improving the trade situation. Recently Textile Today has taken an exclusive interview with Aleksandr Mantytsky, Russian Ambassador to Bangladesh to discuss the prospects for the development of bilateral relations as well as some other important issues.
Textile Today: Since Bangladesh's independence, Russia has been a close partner and ally and is now increasing investments here. How can both countries grow this bond further for a prosperous future?
Aleksandr Mantytsky: The steady development of Russian-Bangladeshi relations is the result of historical legacy and convergent approaches towards many burning issues in the current volatile geopolitical scenario. Economic cooperation is an important pillar in our bilateral ties with Bangladesh being Russia’s second largest trade partner in South Asia after India. The Bilateral Intergovernmental Commission on Trade, Economic, Scientific and Technical Cooperation is a useful platform for stakeholders from both sides to exchange views on broadening and diversifying the scope of our engagements. Next year there will be the Commission’s 5th meeting.
We have all the prerequisites for the successful development of our ties in a variety of spheres, namely smooth political cooperation in the absence of any unsettled disputes and contradictions. Our economic and trade relationship is growing day by day, showing a positive trend that gives us further confidence in its consolidation.
Textile Today: How do you see the economic growth of Bangladesh and how do you evaluate the contribution of the textile and apparel industry to Bangladesh's economy?
Aleksandr Mantytsky: Over the recent years, the world has been witnessing rapid progress made by Bangladesh in various spheres seeking to become a developing nation by 2026 and eventually a developed one by 2041.
Needless to say, the textile and apparel industry has always been playing a pivotal role in the economic growth of Bangladesh. Its clothing and RMG, globally recognized for high quality, durability and affordable prices, are the principal overseas trade items, making up more than 80% of the country’s total exports which has established Bangladesh as the second largest apparel exporter by now. Besides being the key source of foreign currency earnings (last year RMG trade recorded almost 47 billion USD with a 10.27 growth rate despite COVID-19-related uncertainties), the textile industry has been contributing to job creation and attracting investments from abroad as well.
That is why it would not be an exaggeration to say that this vibrant sphere, which accounted for almost 10% of the GDP last fiscal year, is the key driving force behind the impressive performance of the overall Bangladeshi economy. With the efforts being made by the government and business community to promote deshi garments overseas, the target to grab a 10% share of the global apparel market by 2025 announced by BGMEA President Faruque Hassan sounds rather realistic.
As for the exploration of such opportunities in the Russian market, I would like to attract attention to a number of specialized international exhibitions and fairs held in our country, including the Russian Week of Textile Industry, International Trade Fair 'Fashion Industry', Child and Junior Fashion Salon, etc. I believe that the participation of interested Bangladeshi exporters in the said events will be instrumental in boosting bilateral trade interaction.
Textile Today: Kindly shed light on how the import and export scenario of both countries can accelerate.
Aleksandr Mantytsky: As it was mentioned, Russia and Bangladesh have been traditionally enjoying mutually beneficial trade and economic relations. The relevant statistics speak for themselves: since 2019, the annual volume of the bilateral trade has remained above 2 billion USD and almost reached an all-time high of 3 billion in 2021. A slight decrease to 2.35 billion in 2022 was caused by global economic hindrances emanating from illegal sanctions imposed on Russia by the collective West. According to the latest Russian statistics, the turnover for January- July 2023 was approximately 1.4 billion.
In any case, we should be optimistic, because the meaningful political dialogue between our leadership based on constructive approaches to the issues of bilateral and multilateral trade cooperation for the sake of our people leaves no doubt that the existing temporary hurdles will be overcome. To this end, competent agencies from both sides are in a discussion to find a proper solution to this problem.
As for the export and import structure, the key items of the Russian export to Bangladesh are machinery, equipment, vehicles, metals and agricultural products (wheat, fertilizers, legumes, mustard, etc.), while your country provides our market primarily with textile products that, for sure, needs to be diversified. Both sides have huge untapped potentiality of bilateral trade and economic cooperation in this regard.
Textile Today: Bangladesh's textile and apparel industry is the second largest in the world. What opportunities do you see for the Russian governments or companies to invest in Bangladesh?
Aleksandr Mantytsky: The full potential of investment cooperation is yet to be realized. The production of textiles and RMG is a global trend. Today, a large percentage of clothes sold even in the most high-end stores is labeled “Made in Bangladesh”. But it used to reach the Russian market in rather small quantities. Now the situation is changing: since 2022, many international brands decided to leave Russia.
So, Russian businessmen are reorienting towards new suppliers, including those from Bangladesh. Investments, both state and private, can amount to billions of dollars. Creating joint ventures with Bangladeshi manufacturers can leverage the strengths of both countries in terms of technology, expertise and market access. Production of pharmaceuticals in Bangladesh, which could be supplied to Russia is another important area of cooperation. The same goes for the ICT and software industry.
The government of Bangladesh has done a lot to improve the investment climate. The initiative to establish 100 economic zones by 2030 is very instrumental in this regard. Every year we witness the commissioning of new infrastructure projects – Padma Bridge, HSIA Terminal 3, Karnaphuli Tunnel, Dhaka Elevated Expressway. Legal base and market entry rules are being made more business-friendly. With such rapid improvements, the increase in FDI is just a matter of time.
Textile Today: What are the challenges in bilateral trade with Bangladesh? How these could be removed?
Aleksandr Mantytsky: The illegal unilateral sanctions imposed on Russia by the US and its allies caused a breach of the earlier existing production and supply chains. A number of Russian banks (though, naturally, not all of them) came under financial restrictions that hindered transactions in US dollars and euros, including the disconnection from SWIFT. The transit trade through the EU countries remains on hold. This, of course, created some problems for our trade with foreign partners, in particular, with Bangladesh.
At the same time, both the governments and companies of the two countries are adjusting to the new reality. The competent agencies are elaborating on secure payment modalities evading the “toxic” currencies. Some progress has already been made in this regard. The exploration of new transportation routes (for instance, through the far eastern territories of Russia) is underway as well. Probably, the time has come to increase the frequency of cargo flights, among other possible incentives for bilateral trade.
Textile Today: The first nuclear power plant in Bangladesh is going to be functional shortly through Russian support. Could you please update on the matter? What will be the impact/growth on our economy from this kind of investment?
Aleksandr Mantytsky: The construction work at the Rooppur NPP site is going on at a pace to be envied. The first unit of the power plant is going to start pilot operation within the next year, as the construction works are almost over. The work on the second unit is in full swing too – concrete works on the inner containment dome are finished, and the main circular pipeline has been welded ahead of schedule.
Apart from that, more than 1000 Bangladeshi specialists are fully educated and ready to begin the operation on the NPP – all with the help of the Russian Side. As President Vladimir Putin noted during his speech at the Graduation Ceremony on October 5, Russia is not merely building an NPP, we are supporting Bangladesh in establishing a brand new sector of the economy.
Rooppur NPP helps to create thousands of workplaces for the local people, and dozens of Bangladeshi companies provide their services and materials for the construction works – and we are not even speaking about the electricity itself. According to the Minister of Science and Technology, Rooppur NPP will serve as an impetus for the growth of the Northern regions increasing GDP by 2%. I suppose this is an outstanding impact.
Textile Today: What is the status of skills and resource exchange programs between both countries? How Russia and Bangladesh can create more of such programs?
Aleksandr Mantytsky: The Russian Government provides a number of scholarships to Bangladeshi students every year and conducts all kinds of support programs, including through the Russian House in Dhaka. This practice was established back in 1972, right after Bangladesh gained independence.
In the last academic year, the number of scholarships allocated to Bangladeshi students amounted to 110, for the next academic year it has been increased to 124. In total, more than 500 Bangladeshis are studying in Russia now. Among the most popular education programs are economics, medicine and ICT.
It is worth mentioning that after graduation Bangladeshi students choose to return to their home country. They hold important positions across many sectors in Bangladesh and contribute to national social and economic development. They work as teachers, academics, businessmen, doctors and civil servants. At present, there are more than 5,000 Bangladeshis with Russian degrees around the world.
Courtesy: Textiletoday.com.bd
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