The People’s Republic of Bangladesh is located in South Asia and is mainly surrounded by India. It also borders on the Republic of the Union of Myanmar and the Bay of Bengal. The country is for a large part situated on the banks of large rivers originated in the Himalaya’s, which cause one third of the land to flood annually. The estimated population is 164 million people.

 

Dutch Relations

Bangladesh as a potential trade and investment destination

The vast population of Bangladesh, with a large consumer market (young with rising incomes), is positive for private consumption. A strategic geographic location in the vicinity of India and China, as well as low cost labor, makes it a potentially attractive destination for foreign direct investment. The Foreign Private Investment Act provides legal protection from nationalization and expropriation, and guarantees the repatriation of capital and dividends. To illustrate: Bangladesh’s ‘rule of law’ and ‘investor protection’ indicators score higher than India and Vietnam (rule of law scoring even higher than China).

Bangladesh is a founding member of the South Asian Association for Regional Cooperation (SAARC since 1985, along with among others India and Pakistan) as well as the South Asian free trade area (SAFTA), which aims to achieve zero tariffs in support of regional trade. Financial markets are very underdeveloped, and forecasts assume a steady increase in the size over the coming 10 years, with higher availability of credit, stronger capital markets and further extension of micro-financing schemes. Bangladesh’s business environment indicator is nearing that of India, and both infrastructure ratings are comparable. The Anti-Corruption Commission (ACC) has cracked down on protection of overall property rights. The current administration is clearly taking the side of businesses, calling for lending rates to head much lower.

Further reading

The following sources provide more information on Bangladesh as a trade and investment destination.

SAARC Trade Portal
SAFTA

Ministry of Commerce:
Regional and Bilateral Trade Agreements
Bangladesh and the WTO

Embassy of the Kingdom of the Netherlands:
Bangladesh Economy

Bangladesh and the Netherlands

Trade relations between the Netherlands and Bangladesh range from agricultural products and services (food and live animals) to industrial products and services (chemicals, machinery, manufactured, other miscellaneous). However, almost 85% of the exports to the Netherlands are garments in the textile and textile articles category. The second largest export products to the Netherlands other than garments were in the frozen food sector (specifically shrimp and prawn). This does not differ from the general trade patterns between Bangladesh and the EU (as well as the US). The Netherlands further continues to play a crucial role in distribution and logistics to the EU through the port of Rotterdam.

Annual growth in the value of imports and exports between the two countries has increased substantially with 14% over the past five years, and in 2011 the Netherlands was one of the top five investors in Bangladesh. However, considering the relative share of Bangladeshi products and services in Dutch total imports of 0.1% it is fair to conclude that there is room for growth in the trade relations.

Further reading

The following sources provide more information on bilateral trade and investment between Bangladesh and the Netherlands.

Embassy of the Kingdom of the Netherlands - Trade and Investment

Strategic aim of the Economic affairs: trade and investment section of the Embassy of the Kingdom of the Netherlands is to strengthen bilateral commercial ties in a responsible manner and support the improvement of the Bangladeshi business environment with a spill-over effect that improves the lives of the poor. Please find here further information on doing business with the Netherlands and on doing business in Bangladesh.

Holland Trade and the Netherlands Foreign Investment Agency (NFIA) provide specific information on all matters concerning Dutch trade and investment.

Netherlands-Bangladesh Bilateral Investment Treaty

Treaty to Avoid Double Taxation between Bangladesh and the Netherlands