Bangladesh and Korea have always cultivated good bilateral relations since Korea’s recognition of Bangladesh back in 1972. Next year will mark the 50th anniversary of the bilateral relations. Till now, there is hardly any matter of dispute among them. Since independence, with the course of time, Bangladesh became a fertile ground for foreign investment. And Korea is also utilizing this opportunity.
As a result, after 49 year of recognition, Korea has emerged as one of the top investors to Bangladesh with ties in many aspects such as investment, development assistance and people to people exchange. Over the past few years, these ties have increased drastically as both governments are emphasizing on strengthening their bilateral relations.
As a result, in one hand, various Korean businesses and projects have been established or are underway and on the other hand, increasing numbers of Bangladeshi national are finding their employment and ‘second’ home in Korea. In this context, the various aspects of Bangladesh-Korea such as the economic, development assistance, challenges and opportunities need to be explored.
Korea recognized newly independent Bangladesh back in 1972 and set up its diplomatic mission in Dhaka in December, 1973. Bangladesh set up in its counterpart 14 years later, in 1987 in Seoul. Over the year, Korea gradually invested a lot in Bangladesh. Many Korean companies are also running their businesses here.
Starting with Youngone four decades ago, at present more than 200 companies are operating in Bangladesh directly. The main sector for Korean investment is the cheap RMG sector of Bangladesh. As a token of friendship and investment, there is a Korean EPZ also in Bangladesh, popularly known as KEPZ.
Apart from RMG sector, Korea is also keen on investing in ICT and Energy sector and is already investing in them. The Bangladeshi counterpart are also finding and fulfilling their interests utilizing the ties with Korea. Bangladesh has export relations and businesses in Korean Market. Moreover, Bangladeshi nationals are going to Korea and sending back remittances.
As a result, there is Bangladeshi Diaspora community in Korea at present. However, apart from remittance, Bangladesh is also reaping benefits from Korean development assistance projects. Korean organizations such as KOICA are immensely providing assistance in various sectors in Bangladesh including education, ICT, Human Resource and Health sector. At present, the bilateral trade has reached the height of $1.6 Billion.
Korea is a good destination for Bangladesh to export its labor. Over the year, under Employment Permit System (EPS), Bangladeshi workers are going to Korea and sending back a handsome amount of remittance.
At present, Bangladesh is receiving inward flow of $1 billion remittance from Korea per annum. Right now, approximately 20000 Bangladeshi is living in Korea including workers, and their families and roughly 1500 students.
The number of Bangladeshi nationals in Korea is rising drastically as over the last three or four years, the number is increasing at a rate of almost 20% resulting in visible Bangladeshi Diaspora community established in Korea. At present, Korea is the 12th largest remittance destination for Bangladesh.
Apart from economic exchange, there are cultural exchanges taking place also. Universities are establishing exchange system and students are also going to Korea or coming from Korea to study.
Gradually, the Korean prejudices against ‘foreign’ Bangladeshi nationals are being mitigated. Bangladeshi nationals and their life in Korea is finding place in Korean culture. The famous movie titled ‘Bandhobi’ is the prime example of it. ‘Bandhobi’ is a Korean written, produced and directed film released in 2009.
This film with a Bangladeshi in lead role depicted the life of Bangladeshi worker in Korean society. Surely, it helped in mitigating prejudices. However, Korean nationals are also falling in love with Bangladesh and are promoting Bangladeshi culture to Korean Societies also.
Popular YouTuber Joseph Kim, goes by ‘Korean Bhai’ is prime example of it who has fallen love with Bangladesh and is promoting Bangladeshi culture to Korea. Through Korean Bhai and Korean ventures, Bangladeshis are also experiencing a glimpse of Korean culture also.
Korea is one the oldest investor to Bangladesh. It is the first and the largest FDI provider to RMG sector in Bangladesh. Till now, RMG is the main sector for Koreans to invest and run business here.
Korean investment also resulted in KEPZ, an EPZ for Korean Companies led by Youngone, the oldest Korean venture in Bangladesh. However, apart from RMG sector, from the last decade, there is an effort to diversify investment especially in ICT and Energy sector.
Samsung has opened a R&D division in Bangladesh that is ensuring employment for 500 Bangladeshi engineers. Apart from Samsung, Korean companies especially ICT and appliance companies are also running their production division in Bangladesh with partnership with local ventures.
Korean engineering is also involved in many infrastructural projects in Bangladesh. Moreover, Korea is also building power plants in Bangladesh under joint venture with the government under Public-Private Partnership (PPP). At present, KEPCO is building power plant in Chittagong. It is also worth mentioning that; single largest rooftop solar panel of Bangladesh is also installed in KEPZ.
Apart from financial investment, Bangladesh is also reaping benefits from Korean development assistances. From 1987 to 2019, Bangladesh has received $790 million from Korea as ODA assistance.
Apart from that, various Korean organizations and projects are actively working in Bangladesh. KOICA is facilitating and providing ICT trainings in higher secondary schools. Apart from KOICA’s assistance projects all over the country, there are also three vocational training institutes run by the Koreans to uphold country’s human resources.
Korea has also established entrepreneur training programs with collaboration with University of Dhaka. Beside training programs, to support startups, Korea also facilitates incubation for 10 outstanding Bangladeshi startups every year under MoU signed in 2019. Through these ‘know-how’ exchanges, Korea is assisting Bangladesh’s development. Moreover, during pandemic, Korea has also provided aid to Bangladesh.
Korea has directly provided testing kits and antigen kits worth of $800000 to Bangladesh and has handed over 1800 packs of food, 3000 units of PPEs and emergency medical equipments to Bangladesh through KOICA.
Apart from commodity aid, in 2020, Korea has also sanctioned a soft loan of $50 million with 0.01% interest rate for 40 years with a 15-year grace period to Bangladesh upon the request of Government. This loan will be used to manage the pandemic situation in Bangladesh.
Over the time, Bangladesh has emerged as a frontier state with huge economic potentials. Hence, strengthening economic ties with Bangladesh is desirable for investors like Korea. Strong economic ties will help both the countries in the long run. However, there are some challenges and opportunities at the same time.
The growing geopolitical importance of South Asia and the confronting aspects of BRI and Quad will add new dimensions for both of the states. Apart from geopolitics, as Bangladesh is currently graduating from LDC to Developing country, in the coming days; new bilateral frameworks and understandings will be needed and those will be crucial for bilateral relations.
Apart from these, sadly, till now there is no direct flight from Dhaka to Seoul which is a must to improve connectivity and cultural exchange. And last but not the least, during the pandemic, Bangladeshi nationals working or living in Korea is facing some bureaucratic hassle from Korean side as recurring events such as travel bans and strict quarantine etc. over and over again. A smooth policy for their travel should be adopted ensuring all necessary protocols and safety measurements.
On the other hand, though the challenges are trifling and easily solvable, the opportunities are vast. As Bangladesh is currently emphasizing on an IT revolution, there are plans of massive projects including High-tech parks and ICT hubs where Korea can step in to invest.
It will also help diversifying Korean investment beyond RMG sector as they have desire to do so. Moreover, there are scope for increasing people-to-people (P2P) and cultural exchange. Increasing P2P and cultural exchange will result in meeting demand of labor for Korea and increased remittance for Bangladesh. Cultural projects will also help in reducing existing prejudices in both societies.
And lastly, Bangladesh is also currently working on promoting Blue economy, where Korean investment and development assistance can help Bangladesh and reap benefit for Korea also.
It is known to all that, Bangladesh’s development model is inspired by East Asian development model. So, naturally, it is accommodative to East Asian economic mindsets. So, there is hardly any dispute rather it is facilitative for an East Asian country like Korea.
A strong bilateral economic tie will benefit both the party in the long term as it will contribute to Bangladesh’s development and will also contribute to Korea’s internationalization by increasing market for their financial ventures.
During last two of three years, delegates from both the countries have expressed their eagerness to strengthen economic ties in various events through various platforms. Hence, in order to create a strong economic tie, both countries should explore the available opportunities and address the challenges and setbacks.