Financial and diplomatic relationship between Bangladesh and Russia

Since its independence in 1971, Bangladesh has fostered a robust diplomatic relationship with Russia, a nation that has been a steadfast ally all through its historical past. From supporting Bangladesh throughout its liberation struggle to aiding in post-war reconstruction, Russia has performed a pivotal position within the nation’s improvement. At present, the financial ties between the 2 nations proceed to develop, reflecting a partnership that has stood the take a look at of time and geopolitics.

The diplomatic relations between Bangladesh and Russia date again to the times of the Soviet Union. The Union of Soviet Socialist Republics (USSR)’s help was essential throughout Bangladesh’s liberation struggle, offering not solely ethical backing but additionally substantial materials support. This historic bond laid the inspiration for a relationship that has solely deepened over the many years. Following the dissolution of the Soviet Union in 1991 and the emergence of the Russian Federation, Bangladesh and Russia continued to strengthen their diplomatic and financial ties.

The financial relationship between Bangladesh and Russia has seen important development, significantly lately. In 2022, Russia was excluded from the worldwide fee system SWIFT following the outbreak of struggle with Ukraine, accompanied by in depth financial sanctions from Western nations. This geopolitical shift opened new avenues for Bangladesh to boost its enterprise potential with Russia and different former Soviet states.

One of many key areas of cooperation has been within the agricultural sector. Final yr, Bangladesh imported 2.7 million tons of wheat from Russia, reflecting the significance of Russian agricultural merchandise in assembly Bangladesh’s meals safety wants. Moreover, to boost agricultural productiveness, Bangladesh has elevated its imports of fertilizer from Russia. This collaboration is crucial for Bangladesh’s efforts to modernize its agricultural sector and guarantee meals safety for its rising inhabitants.

Power cooperation is one other cornerstone of the Bangladesh-Russia relationship. Bangladesh has began importing oil from Russia, diversifying its power sources and decreasing dependency on conventional suppliers. Furthermore, Gazprom, the Russian power large, has been concerned in fuel exploration actions in Bangladesh for a number of years. This collaboration not solely boosts Bangladesh’s power safety but additionally strengthens its power infrastructure with Russian experience.

The Rooppur Nuclear Energy Plant (RNPP) stands as a landmark challenge in Bangladesh-Russia relations. Supported by Russian monetary and technical help, the development of this nuclear energy plant is nearing completion. Roughly 90% of the work has been completed, and the primary unit is predicted to be linked to Bangladesh’s nationwide grid inside the yr. Russia is offering a mortgage of $11.38 billion for the challenge, showcasing its dedication to serving to Bangladesh meet its rising power calls for sustainably.

Whereas Bangladesh has historically imported numerous merchandise from Russia, the present geopolitical local weather presents new alternatives for Bangladesh to extend its exports to Russia. The exclusion of Russia from the worldwide fee system SWIFT and the imposition of in depth financial sanctions by Western nations have opened avenues for Bangladesh to boost its commerce with Russia.

Russia has proven a eager curiosity in importing a variety of Bangladeshi merchandise, together with ready-made clothes. With many worldwide manufacturers deciding to go away Russia following the sanctions, Bangladesh’s garment business stands to learn considerably. Russian buyers are involved in sourcing clothes from Bangladesh, which is the world’s second-largest exporter of ready-made clothes. This shift presents a major alternative for Bangladesh to develop its market share in Russia and fill the hole left by Western manufacturers.

Aside from clothes, Russia can also be involved in importing tobacco, frozen shrimp, agricultural merchandise, and processed meals from Bangladesh. The agricultural sector in Bangladesh has made important strides lately, with the nation now able to export agricultural and meals merchandise after assembly home demand. The curiosity from Russia in these merchandise highlights the potential for increasing bilateral commerce on this sector.

Jute, sometimes called the “golden fiber,” has traditionally been one in all Bangladesh’s major export merchandise. Russia’s curiosity in jute and jute merchandise presents a possibility for Bangladesh to revive this conventional business. With eco-friendly and sustainable merchandise gaining reputation globally, the demand for jute merchandise is predicted to rise, and Russia may develop into a major marketplace for Bangladesh’s jute exports.

The exclusion of Russia from the SWIFT system posed important challenges for bilateral commerce. Nevertheless, China has performed a vital position in mitigating these points by partaking Russia in its Cross-Border Interbank Cost System (CIPS). The inclusion of the Chinese language forex Yuan in Bangladesh’s fee system facilitates this course of, making it simpler for Bangladesh to hitch CIPS and conduct commerce with Russia.

Alexey Zakharov, a analysis fellow on the Institute of Oriental Research on the Russian Academy of Sciences, famous that with out China’s involvement, it might have been unimaginable for Russia to take care of its monetary actions with South Asia. The elevated use of China’s monetary infrastructure has develop into very important for Russian financial tasks, making certain the continuity of commerce in agriculture and power sectors.

On Might 27, a assembly between the Federation of Bangladesh Chambers of Commerce and Business (FBCCI) and a Russian enterprise delegation underscored the mutual curiosity in strengthening business and enterprise relations. The delegation, led by Russian Commerce Commissioner Dr. Alexander Rybas, mentioned the potential for elevated cooperation. FBCCI President Mahbubul Alam emphasised the long-standing pleasant relationship between the 2 nations and highlighted the Rooppur Nuclear Energy Venture as a testomony to their mutual cooperation.

FBCCI President additionally identified the huge business potential in sectors comparable to prescription drugs, mild engineering, plastics, processed meals, and extra. He urged Russian buyers to discover alternatives in Bangladesh’s Particular Financial Zones, emphasizing the nation’s standing because the world’s second-largest exporter of ready-made clothes and its rising popularity in renewable power and eco-friendly applied sciences.

To keep away from the geopolitical scrutiny of the Western world, Bangladesh ought to think about the Russian market as a substitute commerce route. Strengthening diplomatic relations with Russia is essential, and Prime Minister Sheikh Hasina has a pivotal position to play on this regard. Whereas her latest go to to China has fortified Bangladesh-China relations, an identical initiative to go to Russia may improve Bangladesh’s business potential and diplomatic standing.

The enduring friendship between Bangladesh and Russia is a testomony to the facility of historic alliances and mutual financial pursuits. As each nations navigate the complexities of the present geopolitical panorama, their strengthened financial and diplomatic ties promise a way forward for shared prosperity and development. By leveraging alternatives in commerce, power, and know-how, Bangladesh and Russia can proceed to construct a sturdy partnership that advantages each nations and contributes to regional stability and improvement. The connection between Bangladesh and Russia is not only a relic of the previous however a dynamic and evolving partnership that holds immense potential for the longer term.

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