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Published : 28 Feb 2025, 01:36 AM
Political “uncertainty” in Bangladesh has impacted foreign investment and trade, South Korean Ambassador to Bangladesh Park Young-sik has said.
“Bangladesh is currently under an interim government. Whenever I talk with businessmen, the problem is that they are trying to hold investment,” he said at a “Meet the OCAB” event organised by the Overseas Correspondents Association, Bangladesh, or OCAB, in Dhaka on Thursday.
“They are now in a the wait-and-see-state.”
The envoy continued, “If you look at the data, you’ll see that the increase in private investment and consumption has slowed down.
"The shrinking of private investment and consumption will lead to slower economic growth in Bangladesh.
“Political instability and uncertainty are causing problems for both countries. We need to clear the political matters.”
The ambassador compared Bangladesh’s situation with South Korea’s, which also faced political instability, such as the impeachment of its president.
He added that the outcome of the impeachment is still pending and awaits a court decision.
Park, however, believes that South Korea will not face significant problems due to "adequate internal arrangements, foreign trade, and investments”.
The envoy also advised Bangladesh to focus on attracting foreign investment in the long term, as the country’s dependency on a single export item has led to limited export growth and fewer foreign jobs.
The South Korean ambassador said there is no need to focus too much on the notion that foreigners give "lip service" to the idea that Bangladesh will attract investment due to its location on the coast of the Bay of Bengal and its status as the ninth-largest consumer market.
He stressed that the country needs to focus on attracting investments from China and the Middle East, as they are less integrated into the international financial market.
"The companies from Western countries, Japan, and Korea do not have that much capital. They themselves take loans from banks."
On Bangladesh's debt situation, Park reminded that the country is in a weak position in terms of borrowing.
He highlighted that since 1973, 111 South Korean companies have built 240 infrastructure projects in Bangladesh. Between 2016 and 2022, projects worth $5.4 billion were completed.
“South Korea offers infrastructure loans at 0.01 percent interest for 40 years. Japan’s loan rate is 1.3-1.7 percent, while China’s is 2 percent, and the ADB/World Bank’s is 5-6 percent.”
Park also discussed the challenge of attracting skilled workers, pointing out that Bangladeshis are at a disadvantage in South Korea due to a lack of language skills and failure to adhere to work contracts.
