A trading delegation from Bangladesh headed by Foreign Secretary Mohamed Mijarul Quayes visited Jamaica earlier this month in order to form a closer trading relationship with Jamaica. They also met representatives from JAMPRO as well as Minister of State of Industry, Investment and Commerce Michael Stern.

Speaking with Caribbean Business Report from the Jamaica Observer’s headquarters on Beechwood Avenue, Kingston, Bangladesh’s Foreign Secretary Mohamed Mijarul Quayes said: ” We live in an age where today it is not so much about the merchandise but the merchandising of goods and services.This mission is very important because we want this visit to cover the full spectrum of potential. Bangladesh and Jamaica are both members of the Commonwealth. Both in the UN and with the multi lateral agencies we note that we face similar challenges and encounter similar issues and negotiate on a common platform.

A bilateral approach

“We should now be looking to create a more distinct bilateral approach with our trading arrangements where there are capacities that can translate into efficiencies for all our economies and societies. We have not being able to do so primarily because of the distance between us but also because of the external environment within which we operate which is governed by the nature of the global economy. There is also the pace at which developing countries can move forward and look beyond immediate priorities and that has been rather slow.

” There are some encouraging signs among developing economies. We see increasing leadership coming from the private sector, the diversification of exports, a move to integrate into the global political and economic system. All these things are helping but there is also the realisation that a north/south relationship can no longer inure to our benefit. We now have consider partnershipsthat are south/south in nature.”

To support his point, the Foreign Secretary of Bangladesh pointed to the agreement of 1981 that saw developed countries committing ODA in the scale of 1.5 to 2 per cent of their GNR to the less developed countries. Thirty years later, that has not materialised. In fact the highest is 0.13 per cent from Europe.

The way he sees it there is a need for funding the financing of things like climate change research, terrorism issues and the securitisation of development. He bemoans the lack of financing to supplement the meagre resources that already exist for these endeavours and is therefore calling on more collaboration between south/south countries.

This can be done incrementally which can effectively add value to a developing economy. On the issue of trade, he added that gone are the days where it was done on the basis of price and tariff where efficiencies and competitive edge was sought on how you price goods and what the tariff structure prevailed.

“You can’t fight the movement of products by putting in tariff or non-tarriff barriers so what you need to do is look at the possibility of creatively enhancing your trading potential. So how is that done? By creating synergies and strategising with partners,” said Mohamed Mijarul Quayes.

The Bangladeshi economy

Bangladesh is certainly an economy to watch in the South Asia region. With a population of 136 million, it’s economy has grown 5-6 per cent per year since 1996 and according to the IMF it has a GDP of US$105 billion. It’s per capita income in 2010 was US$1,700 (adjusted by purchasing power parity) and during that year it was ranked as the 47th largest economy in the world in Purchasing Power Parity terms.

Three-fifths of Bangladeshis are employed in the agriculture sector and three quarters of export revenues come from the garment industry. In 2010, the country attracted US$913 million in foreign direct investment, exported goods worth US$23 billion and received remittances worth US$13 billion (25 per cent growth in 9 months) in the financial year 2010-11. The unemployment rate is a little over 5 per cent with 40 per cent of the population below the poverty line. The budget sees revenues of US$12 billion with expenditures of US$16.4 billion. The public debt as of 2010 stood at 39.3 per cent of GDP. According to the CIA World Factbook, last year Bangladesh imported US$21.34 billion worth of goods and services. Inflation is registering a steep increase coming from just over 2 per cent in July 2009 and reported at 10.2 per cent in June of 2011.

In short things appear to be looking up for the South Asian economy. The Central bank of Bangladesh is predicting more than 7 per cent GDP growth for the country in the 2011-12 fiscal year.

Bank of Bangladesh Governor Atiur Rahman is reported to have said: “The country’s GDP will be more than 7.0 per cent in the next 2011-12 fiscal year (July 2011-June 2012) if its current growing trend remains unfaltered. Monetary policies will be maintained on a growth supportive stance to help promote faster inclusive economic growth, with due vigil against inflationary pressure.”

In terms of volume Bangladesh is the largest producer of ready-made garments globally. Looking at value it is the second largest. It is the fourth largest exporter of garments to the United States and in fact in this regard has overtaken Europe.

It is also strong in pharmaceuticals exporting to 74 countries.The country possesses world class facilities manufacturing a broad range of products from pain killers , cancer drugs to antihistamine. Bangladesh has carved out a market for itself in tableware . It hasn’t just focused on fine china but has made a name for itself with bone China.

Jute

Bangladesh produces the strongest and highest quality jute in the world. Jute is a long, soft shiny vegetable fibre that can be spun into coarse strong threads. It is one of the most affordable natural fibres and is second only to cotton in amount produced and variety of uses of vegetable fibres. Jute is a rain-fed crop with little need for fertiliser or pesticides and it is used chiefly to make cloth for wrapping bales of raw cotton and to make sacks and coarse cloth. The fibres are also woven into curtains, chair coverings, carpets and rugs and backing for linoleum.

Bangladesh’s Foreign Secretary sees opportunities to do business with Jamaica with jute particularly using jute as wrapping for coffee products.

On this matter he said: “Jute used to be a cash crop for us but it suffered a setback with the market being flooded with polythene bags. Now that people are more environmentally conscious there is an opportunity for our jute industry. People are now looking for biodegradable natural fibres and this means that jute can come back so we are positioning ourselves. Both cocoa and coffee need natural fibre bagging. You can have jute bagging shipped across Bangladesh for the Jamaican coffee industry. It provides a value-added proposition for both of us. We could send down jute product whereby your idle boys stitch them into bagging for a fee, thus creating employment. We are looking at ways in which we can make trade work.

” We also think that Jamaica can be a trading platform given its regional positioning and so could be a gateway to a third market. The United States tends to put a tariff on goods of between 16 and 32 per cent so if Bangladesh is exporting US$100 worth of goods it in effect comes to US$132. But from Jamaica you can have duty free access so if we can establish a production base that goes around this then we can ship to the United States as Jamaican products as much as Bangladesh products. So together we can look at this huge American market from our manufacturing base with the value addition from Jamaica. It really is a case of how best to twist the rules of origin criteria and have it sent to the United States as a Jamaican product. We can save 16 to 32 per cent then evenly distribute this sum between Jamaica and Bangladesh. That is the level of engagement I think is going to work. We are here in Jamaica to say let us work together because there is capacity building potential.” Rice production

Bangladesh is the fourth largest rice producer in the world and Mohamed Mijarul Quayes believes it could become a major supplier to Jamaica. According to him the country produces 34 million tons a year and has in capacity for Research and Development. It has developed drought resistant varieties. The minister said that his country may well be willing to establish a rice production pilot project in Jamaica which is not dependent on rain. This may well be very timely as last year Jamaica experienced problems with rice supplies with the then Minister of Trade Industry and Commerce, Karl Samuda having to intervene bearing in mind that rice is a staple of the Jamaican diet.

“We can put in place a pilot project that sees our experts working with Jamaican farmers. We could do it in such a way that in a few years there is a transfer of skill and familiarity that sees Jamaican farmers eventually doing it themselves. Food security is very important to Jamaica and if there is a surplus then we could buy the remainder. So you see, we are looking at engagements in the economy which will give us returns at both ends. For example what percentage of Jamaica’s mango crop goes to waste? Probably about 15 per cent. Why let that go to waste? Better to process that which gives you a value added proposition.

“This is all new territory for us, joining hands and looking out for investment in developing countries. This is possible and that ‘s why we want to explore these opportunities.”