to Reach New Heights with Shinzo Abe’s Visit

The visit, which was the first by any Japanese Premier in 14 years, followed on from the earlier tour of Bangladesh Prime Minister Sheikh Hasina to Japan in May 2014 during which the bilateral relationship between the two countries was elevated to a new level by the launch of"Comprehensive Partnership" based on shared values. This Special Report summarizes some of the key aspects and highlights of this recently concluded and very important bilateral visit:

Economic Cooperation

One of the key events attended by Mr. Abe during his visit was the "Bangladesh-Japan Business Forum"organized jointly by the Japan External Trade Organization (JETRO), the Board of Investment (BoI), Bangladesh and the Bangladesh Federation of Bangladesh Chamber of Commerce and Industry (FBCCI) on 06 September, 2014. 22 CEOs of Japanese companies and 65 other high officials attended the event from Japanese companies. They accompanied Japanese Prime Minister Shinzo Abe during his two-day visit to explore investment opportunities in Bangladesh. Bangladesh pointed out potentials for Japanese investors in sectors such as textiles, leather, petrochemicals, pharmaceuticals, shipbuilding, agro-based industries, light engineering and electronics, telecommunications and IT and automobiles.

The visiting Japanese business leaders asked for more policy support and easing of investment rules as they look to divert funds to Bangladesh from China due to rising production costs and worker shortage there. The Prime Minister assured the Japanese delegation of all out support as Bangladesh is placing utmost significance on further investments from Japan. It should be noted that Japan has turned into a major export destination for Bangladeshi products, thanks to an increased demand for apparel and leather items at competitive prices. Exports from Bangladesh to Japan increased 14.90% year-on-year to $862.08 million in the 2013-14 fiscal year. Bangladeshi RMG products worth $572.27 million were shipped to Japan in last fiscal year, up almost 20% from the previous fiscal.

In order to incentivize Japanese investment in Bangladesh, the two countries have already launched the Joint Japan-Bangladesh Public-Private Economic Dialogue with the aim of boosting bilateral trade, investment and economic cooperation between the two countries, the first meeting of which was held on 21st August 2014. Bangladesh also plans to establish an Exclusive Economic Zone (EEZ) solely for Japanese investors looking to invest in various manufacturing sectors in Bangladesh. Prime Minister shinzoAbe emphasized on its location, competitive incentives, improvement of infrastructure and smooth labor supply. On the other hand, Japan assured to relax its rules of origin provisions for importing knitwear products from Bangladesh.

Bay of BengalIndustrial Growth Belt (BIG-B) Initiative
The two Prime Ministers reiterated their commitment to pursue economic cooperation under the initiative of the Bay of Bengal Industrial Growth Belt (BIG-B) Initiative and the need for strengthening collaboration and cooperation in project formulation and implementation through policy dialogue. Prime Minister Shinzo Abe described the BIG-B initiative as the ‘centerpiece’ of Japan-Bangladesh economic cooperation. While noting the three pillars of the BIG-B initiative, namely 1) developing economic infrastructure, 2) improving investment environment, and 3) fostering connectivity, the two Prime Ministers also shared expectation that BIG-B initiative, with maximum use of Japan's advanced technologies, such as high efficient coal-fired power generation, would contribute to mutual benefits and prosperity of both countries.The Japanese Prime Minister specially mentioned the need for improvement of transportation and infrastructure, stable supply of power and energy, urban development including special economic zone improvement, and also public sector development including improved market access to the financial market.

Cooperation in Energy

In their summit level meeting at the Bangladesh Prime Minister’s office, the two prime ministers of Japan and Bangladesh showed their interest to hold the first expert level meeting on peaceful and safe use of nuclear energy by this year.They also shared their intention to hold ‘Japan-Bangladesh Expert Dialogue on Peaceful and Safe Uses of Nuclear Energy’ on regular basis with
the aim of strengthening bilateral cooperation in the area of peaceful and safe uses of nuclear energy and human resources capacity building. The two leaders reaffirmed the importance of strengthening energy cooperation between the two countries including in the area of peaceful uses of nuclear energy keeping in mind that stable energy supply is the key to economic development. It should be noted that Japan is providing financial assistance for building a US$ 4.5 billion, 1200 mega-watts (mw) coal based power project at Matabari Island, Cox’s Bazar, Bangladesh’s largest power project so far.

Cooperation in Disaster Management

The two Prime Ministers agreed to share information for research on, and management of natural disasters. Both sides also decided to cooperate in the sector of disaster risk reduction (DRR), particularly mitigating earthquake disaster, through technology transfer and to work out a framework of cooperation in this regard soon. The two Prime Ministers emphasized the need for adopting the succeeding framework of the Hyogo Framework for Action 2005-2015. The two sides reaffirmed the importance of maintaining close cooperation to implement Bilateral Offset Credit Mechanism (BOCM) in order to promote investment in low carbon technologies, particularly adaptive to the changing needs of, and challenges in, Bangladesh. They also agreed that it is important to make an effort to utilize highly efficient coal-fired power generation technology for energy security and the reduction of greenhouse gas emissions and to share such a view in international forum.

Joint Statement

The two Prime Ministers, following their summit level meeting, signed a joint statement where they reiterated their resolve to widen bilateral relationship under comprehensive partnership framework. The 10-page joint statement outlined the modalities of future engagement under five categories: 1) bilateral political relations; 2) economic cooperation; 3) cooperation on peace and security issues; 4) cooperation on cultural issues and enhanced people-to-people contact; and 5) cooperation on the issues of mutual interests at regional and international forums.The statement provides that the two sides expressed their satisfaction at the launching of the Foreign Secretary level dialogue between the two countries and hoped that the first meet would be held early next year in Dhaka.

The two prime ministers also appreciated that Japan Mint had produced and delivered 500 million pieces of Tk 2 Bangladesh coin by April, which was the first occasion for Japan Mint to produce circulating coin for any foreign government since the Second World War.They also recognized the importance of establishing food value chain from farmers to consumers by making beneficial investments in Bangladesh, including through Public-Private Partnership.They emphasized having stronger agricultural cooperation between the two countries, which would promote the improvement of food productivity, crop diversification and the development of the agricultural infrastructure.

The full text of the statement can be read here.

Looking Ahead

The visit by the Japanese Premier highlights the level of friendship, which exists between the two countries. It also signifies the importance that Japan places on Bangladesh as a dependable and time-tested ally in the international and regional scene. Conversely, since its independence in 1971, Japan has been one of Bangladesh’s closest partners in the international scene, with assistance being forwarded in a number of sectors often with no strings attached. With this visit, cooperation in all sectors can only be elevated to even higher planes. Hence, many are terming this visit as one not only of economic and political significance, but of historical significance too.