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Bangladesh looking for better balance of trade with Indonesia

Bangladesh is hoping for more balanced trade with Indonesia, according to Bangladeshi Ambassador to Indonesia Azmal Kabir, who says his country now buys more from Indonesia than Indonesia buys from Bangladesh

Dian Septiari (The Jakarta Post)
Jakarta
Tue, April 10, 2018

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Bangladesh looking for better balance of trade with Indonesia

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angladesh is hoping for more balanced trade with Indonesia, according to Bangladeshi Ambassador to Indonesia Azmal Kabir, who says his country now buys more from Indonesia than Indonesia buys from Bangladesh.

“The Indonesian President has said that Indonesia should make business with non-traditional markets outside ASEAN. Bangladesh is one of them,” Kabir told reporters on Monday.

He said Bangladesh wants Indonesia to “extend [a] hand” in trade cooperation, as Bangladesh had received recognition from the United Nations Committee for Development Policy that it had met the criteria to graduate from being in the least developed country (LDC) category in March.

Bangladesh was first included in the list in 1975 together with 46 other countries. Only five countries have ever graduated from the list: Botswana, Cape Verde, the Maldives, Samoa and Equatorial Guinea. In order to graduate, the least developed countries have to show improvements over six years in two consecutive triennial reviews in three indicators: gross national income per capita, human asset index and economic vulnerability index.

Kabir said Bangladesh has made progress in reducing poverty and increasing living standards, as well as in promoting industrialization and information and communications technology.

Bangladesh’s economy had grown at an average rate of 6.2 percent in the last decade while its per capita income had almost tripled in the same period. Bangladesh was expecting to finally be recognized as a developing country in 2024, which would bring a whole new set of challenges, he said, such as an increased foreign debt burden and higher interest on loans from foreign lenders.

“We may lose [US]$2.7 billion in exports every year because of additional tariffs and loss of duty benefits,” he said. “In addition, Bangladeshi products will see increased competition abroad.”

However, bilateral trade agreements, including with Indonesia, would significantly help to buffer the bad effects of change, he said.

“Currently Bangladesh imports so many things from Indonesia. At the same time Bangladesh also has its own products to be promoted. Kadin [the Indonesian Chamber of Commerce and Industry] could take the initiative and visit Bangladesh to see our products so our trade balance could be improved,” he said.

During President Joko “Jokowi” Widodo’s visit to Dhaka in January this year, Indonesia and Bangladesh signed five agreements, including on the launch of negotiations for an Indonesia-Bangladesh Preferential Trade Agreement. “We expect that those are [to be] implemented and further [memoranda of understanding] that are still pending from a few years back, those are being negotiated,” Kabir said.

He also mentioned Indonesia’s importance as the leading country in ASEAN in the refugee crisis on the Bangladeshi border with Myanmar, saying Indonesia could play a more fruitful role. He said the refugees were putting pressure on the Bangladeshi economy as almost 1.1 million people are in Cox’s Bazar, which cannot accommodate them. “The refugees who live there are suffering [and] we are also suffering,” he said.

The UN Committee for Development Policy also found Myanmar and Laos might be eligible to graduate from the least developed country list this year. Myanmar’s ambassador to Indonesia, Daw Ei Ei Khin Aye, said graduating from the list would not be easy.

“The goal was to have half of the LDC countries graduate by 2020,” she said. “But since 1971 when the LDC category was first established we only got five.”

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