Government takes steps to strengthen economic relations with Middle Eastern countries

Bangladesh's interim government is working to strengthen ties with Middle Eastern development partners, as relations had deteriorated during the previous Sheikh Hasina administration, officials revealed on Tuesday.

The government has made progress in fostering communication for economic collaboration with Gulf and Middle Eastern donors. Additionally, it is planning to host three Joint Economic Commission (JEC) meetings with key countries by June, according to officials from the Economic Relations Division (ERD).

The JEC meetings, which are set to take place with Saudi Arabia, Turkey, and the UAE, aim to enhance economic and business cooperation with these nations after a long hiatus in such interactions.

"We are focused on improving relations with Gulf and Middle Eastern donors. By June, we plan to hold three JEC meetings," said Mohammad Hasan Arif, additional secretary and wing chief (Middle East) at the ERD.

"Historically, Gulf and Middle Eastern development partners have been crucial to Bangladesh. Relations with the previous government were somewhat strained, but now we are working to improve them," he added.

Arif mentioned that the government had already reached out to Middle Eastern donors, including the Islamic Development Bank (IsDB), Saudi Arabia, Abu Dhabi Fund for Development (UAE), OPEC Fund for International Development (OFID), Kuwait, Qatar, and Turkey, seeking enhanced cooperation.

"Many of them have responded positively, and some have already discussed Bangladesh's potential needs with us," he said.

Preparations are underway for a JEC meeting with Turkey in March to explore investment opportunities and economic cooperation. Saudi Arabia and the UAE have also agreed to hold JEC meetings by June.

In December, the IsDB's financing arm, the International Islamic Trade Financing Corporation (ITFC), finalized a $2.75 billion loan agreement for Bangladesh, aimed at supporting the purchase of oil, LNG, and fertilizers for the fiscal year 2025-26.

Under the agreement, the ITFC will provide $1.65 billion to the Bangladesh Petroleum Corporation (BPC) for fuel oil purchases, $600 million to Petrobangla for LNG, and $500 million for fertilizer.

Additionally, the IDB has committed a $324 million loan for the construction of five bridges in northeastern Bangladesh.

In a virtual meeting with an OPEC Fund Director in January, the government requested $1 billion annually in financial support from development partners. The OFID is expected to sign a three-year economic cooperation agreement with Bangladesh, offering both financial and technical assistance.

In FY 2024, the IDB provided $34.21 million in loans, while OFID contributed $6.54 million, Kuwait $10.97 million, and Saudi Arabia $2.02 million.

To date, the IDB has provided $1.44 billion in support for Bangladesh's development projects, excluding the ITFC commercial loan, according to ERD data.