Bangladesh must reorient toward emerging Asian power centres: Rehman Sobhan

Economist Rehman Sobhan has urged Bangladesh to fundamentally rethink its global economic orientation as the balance of global power shifts rapidly toward the Asian region, warning that continued dependence on Western markets and outdated assumptions could expose the country to new vulnerabilities.

Speaking about the changing global order at the 'Bay of Bengal Conversation' today (22 November), organised by the Centre for Governance Studies (CGS) in Dhaka, Sobhan said, "The world of 2025 is 'a much more changed world', where economic power is relocating to the Global South, with its epicenter in South, Southeast and East Asia."

He noted that China is already the world's largest economy in purchasing power terms, India is rising fast, and by 2050, China, India, and Indonesia are projected to become three of the top four global economies.

Sobhan highlighted three forces driving this transformation: global trade realignments, shifts in capital flows, and technological change.

China is now the world's largest exporter and the principal trading partner of countries across Asia, Africa, and Latin America, displacing the decades-long dominance of the United States, he noted.

He pointed out that China has also become the largest supplier of capital in the global system, distributing $2.1 trillion in aid and loans between 2000 and 2024, more than the US. "China, Japan, and other Asian economies now dominate global reserves and sovereign wealth funds, a reality Bangladesh cannot ignore," he added.

Bangladesh must reposition now Sobhan emphasised that Bangladesh's historical orientation toward Western economies is no longer aligned with global realities. "When Bangladesh emerged, Western development partners underwrote 12% of its GDP. Today, aid reliance has fallen to around 2%, and $50 billion in committed assistance remains unused," he said.

He further noted that the main sources now of capital investment and financing are coming from countries within the Asian region. "China alone has around $40 billion invested in Bangladesh through loans and various financing instruments. Despite this shift, Bangladesh remains preoccupied with retaining US and Western markets, especially for ready-made garments, and clinging to LDC advantages," he said.

Sobhan warned that such dependence is risky, particularly under the unpredictable and "transactional" trade policies of the US. He argued that Bangladesh has failed to take advantage of duty-free access to India since 2010 and has not integrated itself into the supply chains of China and India, despite their scale and growth potential.

Smarter policymakers, bolder private sector needed To align with the new global economic landscape, Sobhan said Bangladesh must adopt much smarter and more dynamic policymakers and cultivate a much more adventurous and creative private sector.

He urged businesses and policymakers to move beyond the "LDC cocoon" and reposition Bangladesh within the emerging Asian-led global value chains, where future markets, capital, and technological opportunities are expanding.

"This is a world in which we are emerging into a new order," he concluded. "We will need more creative policy-making and more adventurous private enterprise."