Bangladesh is an attractive destination for investment by foreign companies, the ambassador says
South Korea wants to take the current relations with Bangladesh to a higher level, tapping the enormous potential with focus on three strategies - elevation, diversification and generation.
"Tapping the enormous potential of cooperation and taking the current relations to a higher level are my goals and responsibility," Ambassador Lee Jang-keun said during an interview on Friday, noting that Bangladesh and South Korea have enjoyed solid and robust relations.
The ambassador, who steps into his second year of current tenure, said elevation, diversification and generation were the three keywords that he kept in mind.
"I would like to take the current level of relations to a higher level: elevation. I would like to see more diversified areas of cooperation: diversification. And I would like to place the young people, the new and future generation, at the heart of my endeavour: generation," Ambassador Lee explained.
He said South Korea had been a crucial partner and friend of Bangladesh during the latter country's successful economic development for the past decades.
It is well known that Korean companies have played a key role in making Bangladesh's RMG sector as it is today, the envoy said.
However, the level of cooperation between the two countries is still far below its potential. Surprisingly, Ambassador Lee said, bilateral trade volume has not increased at all for more than 10 years. The RMG sector still occupies the largest part in Korea's investment in Bangladesh.
Ties beyond the pandemic
The unprecedented Covid-19 pandemic is causing a lot of difficulties and challenges. The Korean envoy, however, said both South Korea and Bangladesh have handled the situation rather successfully, even though Bangladesh is currently tackling another surge of infections.
"As the saying goes, ‘A friend in need is a friend indeed.’ I am happy to say that Korea has been with Bangladesh in this difficult time," he said, adding that they had provided various assistance to the Bangladesh government to help successfully address the challenges, including $50 million as Economic Development Cooperation Fund (EDCF) soft loan at the end of the last year.
The envoy said the prolonged pandemic had been causing difficulties in his efforts to take the relations to a new height.
"In particular, we couldn't fully utilize the momentum of cooperation which we have successfully cultivated before the pandemic, such as the visit of the Korean prime minister in 2019," Ambassador Lee said.
He hoped to revive the stalled diplomatic exchanges and activities during the latter part of this year.
He said Covid-19 is offering them an opportunity to think hard about the value and future of our relationship. "For the past year, I had many opportunities to participate in events to discuss and share ideas on the future of our relationship, and I was very encouraged to find the willingness and enthusiasm for stronger future ties from both sides."
More FDI amid Covid-19 pandemic
The envoy said Korea was already one of the key foreign investors in Bangladesh. According to the Bangladesh Bank, he said, Korea ranks 4th in gross Foreign Direct Investment (FDI) inflows during 2019-20 fiscal year in Bangladesh, after the UK, Singapore and the US.
In terms of stock volume at the end of the 2019-20 fiscal year, Korea ranks 5th which is higher than other major countries, including Japan. In terms of annual net FDI inflows, Korean companies have invested annually over $100 million since 2011.
"Obviously, the Covid-19 situation appears to slow down Korean companies' investment in Bangladesh, in particular new investment," said the Ambassador.
He, however, said a new Korean company manufacturing camping items recently signed an agreement with Bepza for establishing a factory in Mongla EPZ, with an investment amount of $4.6 million.
There are also several Korean companies discussing investment possibilities with their local Bangladesh partners, Lee mentioned.
"In this regard, I would also like to note that many of the Korean companies in Bangladesh are expanding and reinvesting their capital every year. Youngone, the largest Korean investor, alone is reinvesting over $30 million annually," he said.
Korean companies are still seeing the competitive labour cost of Bangladesh as an important merit for investment.
Ambassador Lee said it may be the reason why the majority of Korean investment is in the RMG sector, which is a typical labour-intensive sector as well as the largest export industry.
But as the country is developing and changing speedily, he said, the expanding domestic market is becoming increasingly attractive to Korean investors.
Many Korean companies are already actively engaging in Bangladesh's infrastructure development projects and making investments, he said.
"Most notable is Samsung, which is now constructing the third terminal of Dhaka airport. The two governments launched a PPP platform in 2019 to encourage Korean companies' active involvement in Bangladesh's construction projects," said the ambassador.
"Also, I believe the bio and pharmaceutical industry is another area of potential interest. Recently under the initiative of the Bangladesh Embassy in Seoul, we had a very constructive webinar on Korea-Bangladesh trade and investment opportunities with focus on ICT and pharmaceutical sector," said Ambassador Lee.
Listening, addressing difficulties
The envoy said Bangladesh is an attractive destination for investment by foreign companies, in particular for its abundant, low-wage, competitive and quality labour force.
"There are many reasons why Bangladesh is attracting foreign companies: continuous strong economic performance, rapidly expanding middle class and domestic market, and ambitious young population," he said.
However, Ambassador Lee said, much remains to be done to make the investment environment more attractive. "Still many Korean companies find it difficult to manage and operate businesses in Bangladesh despite these merits."
In order to boost bilateral trade and investment and diversify the areas of collaboration, Ambassador Lee said, one of the important things to do might be making a more business-friendly environment.
To this end, he said, listening to and addressing the difficulties faced by companies that are already investing and doing business in the country will be the first step.
"The difficulties or complaints I hear often from the Korean business community are the complicated and high tax system, tariff and taxes on sample goods and even on official grant items, difficulties in sending home profits, bureaucracy which causes uncertainty in business and undercuts efficiency, and the reluctance to issue long-term visas for long-time investors and business people," Ambassador Lee mentioned.
Opportunities for young Bangladeshis
There are currently around 1,300 Bangladeshi students pursuing higher education in South Korea, with most of them in Masters or Doctorate programs with scholarships. There are many scholarship programs provided by the Korean government, governmental institutions such as KOICA, and universities.
"While trying to expand the government-sponsored program, in particular GKS (Global Korea Scholarship), we also try to provide more information on the opportunities for higher education in Korea to the Bangladeshi people," said Ambassador Lee.
In particular, he said, they plan to work with alumni student associations such as GKS alumni and KOICA alumni, to provide useful information and advice to aspiring Bangladeshi students.
"I also have in mind to organize a job fair, in cooperation with KOTRA and KBCCI, for those students who returned from Korea to help them find job opportunities in Bangladesh, in particular in Korean and Bangladeshi companies seeking potential employees with knowledge and experience of Korea," said the ambassador.
He said he understood the difficulties faced by some Bangladeshi students who could not go to South Korea under the temporary visa restrictions due to the Covid-19 situation. "But we do hope that the situation returns to normal soon and the restrictions are lifted. We are making efforts to this end."
Lee said he was going to make full use of the already existing programs for enhancing people-to-people contacts while exploring new programs.
The South Korean Embassy in Dhaka has been holding various cultural events regularly to engage with the Bangladeshi people, such as film festivals, K-pop festivals, Korean food festivals, Taekwondo competitions, music performances, exhibitions, and Korean speech contests.
"Unfortunately, due to the Covid-19 situation, we could not organize face-to-face programs, but we are trying to make the best use of online and virtual programs," he said.
The ambassador said they were currently in the middle of K-pop auditions to select talented Bangladeshi performers to recommend to the final competition to be held in Korea in October this year. "We also plan to celebrate our national day virtually this year again, which falls on the 3rd of October."
More importantly, he said, to celebrate the golden jubilee of the diplomatic ties between Bangladesh and South Korea in 2023, there will be a number of programs to be offered in the context of enhancing people-to-people exchanges.
"I've started discussions with the Bangladesh Foreign Ministry on potential programs that our countries could launch together on this occasion," said the envoy.