'Exports and remittances are the two largest areas where the US can play a vital role'

Dr Birupaksha Paul. Sketch: TBS

Since the formation of the interim government led by Chief Adviser Professor Dr Muhammad Yunus, the first US high-level delegation has just arrived in Dhaka. 

US Assistant Secretary of State for the Bureau of South and Central Asian Affairs, Donald Lu, will lead the delegation. The discussions will focus on how the United States can contribute to Bangladesh's economic growth, financial stability, and development priorities. 

The Business Standard spoke to Professor of Economics at State University of New York and former Chief Economist of Bangladesh Bank Dr Birupaksha Paul about Bangladesh's expectations regarding bilateral trade, investment, and ways through which the US can support Bangladesh's economic progress.  

Since 2022, Bangladesh has fallen into an acute shortage of foreign currency, particularly dollars, due to our balance of payment crisis. With our foreign reserve dwindling, the US can be the most important country to give us support in mitigating this shortage. The US can provide us with loans and grants, which will help us stabilise the economy. 

The US can be a big source of FDI for us. Some US investors are unsure about investing in our country, so Bangladesh can request them to reconsider and invest dollars into our projects. It will increase our foreign reserves.

Exports and remittances are the two largest sectors where the US can play a vital role. Bangladesh has to try to negotiate with the US delegates a more favourable export regime for the Bangladeshi exporters in the US market. Also, we can try to increase our remittances coming from the US through our non-resident Bangladeshis. 

For the upcoming fourth industrial revolution (4IR), we need to develop foresight and increase our capabilities. In the coming years, AI technologies and intellectual properties will become more and more valuable. We need to grab these sectors. 

We cannot go for the heavy industries yet; we will not survive direct competition against China in industries like automobiles. We cannot start chip manufacturing as we have no precedence in this sector. We need to look at India and see how they have used their comparative advantages to increase their share in the high-tech industries. 

And here, the US can play a vital role. They invest heavily in high-tech industries. We need to find sectors according to our comparative advantage and negotiate for investments accordingly. 

The US plays a vital role in knowledge development too. We need to ensure their cooperation in training and educating our Gen-Z generation, who are tech-savvy and can contribute to our advancement in the future. 

However, there is a worrying bit. Dr Yunus, albeit his popularity at home and abroad, has little legitimacy. His interim government is not perceived as a stable government by the foreign investors. Since FDI mostly comes from private foreign investors, unless there is a stable government, convincing the private investors will be tough. 

But Dr Yunus can pave the path for the next governments. I am hoping that he can restore the relationship with the US, which was maligned by Sheikh Hasina and the Awami League. Friendship matters, be it on the personal level or on the state level.