South Korean companies to find more opportunities in Bangladesh: Envoy

Highlights: 

• Over 200 South Korean companies have so far invested in Bangladesh
• South Korea's collective investment in Bangladesh amounts to about $1.2 billion
• It is 5th largest foreign investor in Bangladesh
• The country is providing duty, quota free access for 95% of Bangladeshi products
• South Korea will continue supporting Bangladesh on Rohingya issue

Bangladesh is an attractive investment destination for South Korean companies, which will find more opportunities here as the Bangladesh government has been making strenuous efforts to improve the business environment by removing obstacles, said the South Korean Ambassador to Bangladesh Lee Jang-Keun.

"Korea has been the leading foreign investor in Bangladesh's RMG (readymade garments) sector since the early 1980s. Slowly but steadily, more and more Korean companies started investing in different potential areas like electronics, automobiles, and ICTs," the envoy said in a webinar on "Exploring Korea-Bangladesh Relations in the Last Five Decades and Beyond" on Thursday.

Lee Jang-Keun was the guest speaker at the webinar organised by the Bangladesh Institute of International and Strategic Studies (BIISS). 

Over 200 Korean companies have so far invested in Bangladesh, according to the Embassy of the Republic of Korea (South Korea). 

South Korea's collective investment in Bangladesh amounts to about $1.2 billion and it ranks 5th among all other investor countries. 

In terms of official development assistance (ODA), Bangladesh is South Korea's priority partner country and the third largest recipient of ODA with a total volume of $790 million received between 1987 and 2019.

Lee Jang-Keun said South Korea will continue to hold its position as a major foreign investor in Bangladesh.

He said the amount of export from South Korea to Bangladesh is lower than that of at least 10 other countries, but still South Korea is providing duty and quota free access for 95% of Bangladeshi products. 

Amid the Covid-19 pandemic, South Korea's export to Bangladesh decreased by 19.4% last year to $1.03 billion from $1.28 billion in the previous year. Bangladesh exports to Korea decreased by 2.9% to $393 million in 2020 from $405 million in 2019. 

While garments, textile, and leather are major export items of Bangladesh, steel and machinery are the main export items of Korea.  

During the past five decades, the relationship between the two countries has expanded and developed in every field of cooperation such as infrastructure, RMG, electronics, education, and culture, said the South Korean ambassador.  

He further said the future of Bangladesh-South Korea relations "looks very bright and it will get brighter" with diversified success stories.  

Regarding a question on the Rohingya issue, the envoy said South Korea will continue giving financial support for the Rohingya people taking refuge in Bangladesh. 

They will also work with Myanmar so that the Rohingyas can return to their country.  

South Korea can open up newer avenues in manufacturing

At the webinar, Major General Md Emdadul Bari, director general of Bangladesh Institute of International and Strategic Studies (BIISS), said Bangladesh needs to diversify its export basket from the RMG to other sectors like IT, shipbuilding, electronics manufacturing, pharmaceuticals. 

He said South Korea can be the catalyst for Bangladesh in breaking into these newer avenues of manufacturing. 

"The Bangladesh-Korea cooperation in infrastructural development through PPP (private-public partnership) and technology transfer will be imperative in order to attain industrial diversification for Bangladesh," he added.

South Korea was the first country to set up an exclusive foreign export processing zone – KEPZ – in Bangladesh and is still one of the top sources of foreign direct investment, especially in the textile and garment sector. 

Around 80% of Korean investment is in the manufacturing sector, most of which belongs to the RMG sector. South Korean companies are nowadays taking more interest in tapping into Bangladesh's fast-growing domestic market, said BIISS Chairman Ambassador M Fazlul Karim, who chaired yesterday's session. 

"Currently, the two countries are working with a view to diversifying their mutual relations through various undertakings in other potential areas besides the existing ones, " he added.  

South Korea was the pioneer of garment industries in independent Bangladesh when the Youngone Corporation established their business here around four decades ago. 

It is increasingly engaging itself in infrastructure development, energy, and medical equipment sectors.   

They are also entering promising manufacturing sectors including electronics, automobiles, and ICT. 

Industry giants like Samsung Electronics and Hyundai Motors have recently partnered with local companies to set up assembly plants for mobile phones, home appliances, and automobiles.