The project showcases Bangladesh's ability to partner with private sector for large-scale ventures

Bangladesh has always viewed Thailand as a reliable and credible friend. Since our independence, both countries have enjoyed an amicable relationship. That friendship has been further exemplified by Thailand's support in building the Dhaka Elevated Expressway, the first part of which is set to be inaugurated today. 

Diplomatic relationships between Bangladesh and Thailand were established on 5 October 1972. Both the countries are going to celebrate the 51^st anniversary of their diplomatic ties this year. 

In an interview with The Business Standard at the Royal Thai Embassy, Dhaka, Ambassador Makawadee Sumitmor discusses key changes in Bangladesh since independence, collaborative efforts across sectors, investments, infrastructure projects and more. 

What key changes have you seen in Bangladesh since independence?

It must have been a decisive and proud moment for Bangladesh to declare independence in 1971 and start to set the country's own future. Within 50 years, Bangladesh has managed to be one of the few countries who could maintain continued economic growth even during the Covid-19 pandemic. That is something very difficult to achieve, even for advanced economies, making it a rising star in South Asia. 

Its infrastructure development is also phenomenal and will greatly uplift the economic potential of the country through projects such as the Padma Bridge, the new terminal of Hazrat Shahjalal International Airport, and of course, the Dhaka Elevated Expressway. 

How are Bangladesh and Thailand helping each other across various sectors?

Thailand recognised Bangladesh on 16 February 1972, before establishing diplomatic relations in October of the same year. Since then, we have had cooperation in diverse sectors, such as security, economic and technical. I have met several Bangladeshis who graduated from universities in Thailand, such as Chulalongkorn University, Thammasat University, Asian Institute of Technology and Assumption University and are now working in senior positions. 

We provide scholarships for postgraduate studies and training through the Thailand International Cooperation Agency or TICA. Thai investors came to Bangladesh more than two decades ago, particularly in the agro-industry, which created hundreds of jobs and transfer of know-how. I think CP is the first Thai company to expand its business here, and its products are well-known in the market.

Thailand and Bangladesh also have cooperation in regional frameworks like BIMSTEC and ACD to create stability and prosperity, such as by enhancing the connectivity network and facilitating trade. 

Bangladesh is building 100 special economic zones for foreign investors. Is there any chance of Thai investment in these zones?

According to BIDA, there are more than 100 Thai investment projects in Bangladesh. Ninety-five projects are registered with BIDA with a total value of $1.1 billion.  

In terms of RMG, Thai suppliers of upstream materials like fabric and yarn might have the possibility to invest in Bangladesh. I have learnt from some RMG companies that once Bangladesh becomes a developing country, it will remain eligible to get GSP from some western markets only if a higher proportion of materials are sourced domestically. This will make it necessary to set up new factories for specific kinds of fabric and yarn, including the ones made from recycled materials.

Bangladesh has continuously addressed the problems of foreign investors. A few crucial points remain, such as energy supply and complicated regulations on Advance Income Tax and repatriation of profits. I believe the Bangladeshi authorities are trying to fix them and create a more business-friendly environment. 

BEPZA and BEZA might consider doing a roadshow in Thailand to let investors know the potential and incentives of Bangladesh. 

What are the prospects of the Bangladesh-Thailand FTA and its impact on manufacturing opportunities?

Bangladesh and Thailand are in the process of establishing a Free Trade Agreement (FTA) with the goal of doubling bilateral trade to $2 billion by 2021. While the pandemic affected this target, bilateral trade was valued at $1.25 billion in 2022. The FTA is progressing, with Thailand completing its feasibility study and Bangladesh working on its own version. 

Once realised, the FTA can benefit Bangladesh's seafood and prawn exports. To diversify from RMG, Bangladesh could explore manufacturing automobile parts or electric vehicles for Thailand's robust automotive industry, promoting regional supply chain integration.

How do you think the direct coastal shipping service between Chattogram and Ranong will accelerate the economy and benefit both nations?

Currently, Bangladeshi goods to Thailand go through transhipment ports, taking 12-15 days. A direct coastal shipping route between Chattogram and Ranong could reduce travel time to three days, lowering shipping costs by around 30%. This route could boost inter-regional trade, with Chattogram serving as a distribution point for Bangladesh, Northeast India, Nepal, and Bhutan, and Ranong acting as a gateway to Southeast Asia. 

Thailand's land bridge project linking Ranong and Chumphon ports further enhances connectivity. In the long term, this could offer a cost-effective export route to the Pacific Ocean, complementing the Malacca Strait. Additionally, connecting Bangladesh and Thailand via the Trilateral Highway Project could reduce logistics costs between the two countries.

What do you think of public-private and international investments for a growing country like Bangladesh?

I think foreign investments and public-private partnerships (PPP) are good alternatives for governments with mega-projects in the pipeline but do not want to increase public debt. This solution allows foreign and local companies to work with governments throughout the whole process, from securing loans to maintenance. PPP and foreign investments could build up capital, create employment, enhance local labour skills through a transfer of technology and managerial know-how, and help integrate the domestic economy with the global economy.

The Dhaka Elevated Expressway is the first PPP mega project in Bangladesh and it is an honour that Italian-Thai Development Public Company Limited was selected to implement the project. I hope the success of this expressway will contribute to the economic advancement of Bangladesh and lead to several more PPP projects in the country.

How do you view the Dhaka Elevated Expressway (DEE) project and its significance in Bangladesh's context?

The DEE project is a crucial ongoing mega project in Bangladesh, particularly given the densely populated nature of Dhaka city. The partial opening of the DEE, stretching 11 km from Hazrat Shahjalal International Airport to Farmgate, marks a significant moment. 

It showcases Bangladesh's ability to partner with the private sector for large-scale projects, generating numerous jobs during construction. The completion of the full 20 km project by 2024 is anticipated. The DEE will alleviate traffic congestion, acting as a bypass and enhancing travel in and around Dhaka. This benefits the economy by promoting equitable resource distribution and balanced growth, contributing to Dhaka's development.

ITD is a major investor in the DEE Project. Should more Thai companies invest in Bangladesh?

ITD, Thailand's largest construction company, demonstrates confidence in Bangladesh's economic growth through its investments in the DEE Project. Bangladesh's economic resilience, steady GDP growth, and strategic trade position make it an attractive investment destination. The streamlined processes and government support for projects like DEE are appreciated. ITD's success story could inspire other Thai companies to invest in Bangladesh. With upcoming infrastructure projects like Dhaka MRT lines, opportunities abound. ITD's participation in such projects, like MRT Line 6, could pave the way for involvement in Line 5 and Line 1.

How do you compare infrastructure development between Bangladesh and Thailand in terms of time, quality, and complexity?

Both Bangladesh and Thailand share similar paths of infrastructure development, heavily investing to spur economic growth. Although requiring substantial budgets, such investments lead to tangible long-term benefits. Thailand's advanced transportation network, a driver of its regional economic status, took decades to develop. 

Bangladesh, on a similar trajectory, showcases remarkable progress with projects like Padma Bridge, Cox's Bazar railway extension, Matarbari Deep Sea Port, and Rooppur Power Plant. Bangladesh's advantage lies in its compact size and flat terrain, enabling cost-effective connectivity. Even challenges like the Padma River were overcome with successes. Developing a nationwide public transportation system could further enhance connectivity and economic stability for Bangladesh.

What advantages and disadvantages do you see in the economic development of Bangladesh, and what advantages do you see in the future?

Bangladesh's economy has grown rapidly, with an annual GDP growth rate consistently above seven per cent, placing it among the fastest-growing economies in the world. However, this impressive performance is still overly dependent on the ready-made garment (RMG) industry, which accounts for roughly 80 per cent of export earnings. I think Bangladesh will be more resilient if major sources of export could be diversified. New products and new markets will be essential.

Economic development brings progress and higher income. While it is not easy to disperse the fruits of development equally, we should try to reduce the gap as much as possible. A farmer in a rural area should be entitled to enjoy the benefits of economic growth equally to urban entrepreneurs.