|
Further boost to Dutch-Bangla economic relations on the cards
4/30/2004
The Dutch economy has a per capita income that ranked it in 15th place in the world in 2002. Above all the Dutch economy is characterised by its international orientation. The evidence can be found in the exports and imports of goods and services, each equal to more than 60% of GDP. The openness of the Dutch economy may also be seen from the Netherlands' success in recent years in attracting direct foreign investment (FDI). For many years now the Netherlands is considered by various organisations (such as the Economist Intelligence Unit and the International Institute for Management Development) as one of the most attractive destinations for FDI. Apart from being a major recipient of FDI, the Netherlands itself invests heavily in other countries.
With a share of 14.6% of the total added value generated in the Netherlands, the role of the industrial sector is modest in comparison with that in many other western countries. The limited scale of the domestic market means that industry is of necessity export-oriented. On top of that, the lack of raw materials leaves industry heavily dependent on imports. Among the leading segments of the industrial sectors are food, tobacco and beverages, the chemical industry and the metal industry.
The Netherlands is a big trading nation. In 2002 it accounted for 3.8% (USD 243.4 billion) of world goods export and 3.3% (USD 217.7 billion) of world goods import, making it one of the ten most important merchandise exporting and importing countries in the world. In the league table of exporting and importing countries of commercial services the Netherlands ranked in eight and seventh place respectively in 2002, with shares of 3.6% (USD 54.7 billion of exports) and 3.7% (USD 55.9 billion of imports)
Four-fifths of Dutch exports consist of merchandise. Dutch firms mainly export capital goods (especially machinery and transport equipment) and chemical and agricultural products. Last year capital goods amounted to roughly a third of the export package. Recent years have seen a fall in the share of agricultural products in the export package.
Trade, Investment and Development
For too long, development cooperation has ignored the fact that sustainable poverty reduction works best against the background of an expanding private sector that is strong, stable and productive. Productive local industries need to be encouraged, preferably in such a way that the poorest groups can benefit sustainably from them. Developing countries must also be given more opportunity to sell their products on the world market. International trade agreements must take more account of this. Equally important is the need for companies exporting from developing countries to be able to make more use of the opportunities available to them on international markets. From 2004 onwards, Dutch bilateral policy will include specific activities to improve the business climate in developing countries.
At this moment the Netherlands Embassy in Bangladesh is already involved in projects that create an enabling environment for doing business. In the field of infrastructure we have committed an amount of euro 40 million to rural electrification. The main goal is to improve the socio-economic situation in rural areas by providing affordable electricity. Recent studies show that rural electrification has a positive impact on business development and poverty alleviation.
The Netherlands Minister for Development Co-operation has committed herself to increase support to the Bangladeshi business community. The Development Related Export Transaction (ORET) programme with new modalities will be re-introduced for a number of developing countries, including Bangladesh. The new programme no longer will be tied to Dutch companies. Instead, in line with the newly adopted Bangladeshi procurement guidelines, the selection of the companies for implementing projects under ORET will now be done on the basis of international competitive bidding.
Later this year, funds of the Programme for Co-operation with Emerging Markets (PSOM) will be available in Bangladesh. PSOM is meant to expedite investments of the private sector in emerging markets. PSOM projects are pilot-projects which will test new production methods or services in a developing country for commercial exploitation.
As per the latest annual data available, in 2002 the export from the Netherlands was 77 Million Euro, while the export from Bangladesh was about 244 Million Euro. To further improve the trade relation the Netherlands Embassy in Dhaka organised a catalogue show in Dhaka on March 20-21, 2004. This show was meant to disseminate information to the local business community on the range of products the Netherlands has for a type of market that exists in Bangladesh. This is the first of a series of catalogue shows to be held in the cities of Chittagong, Khulna and Sylhet.
The first show was declared opened by Mr. Amir Khosru M. Chowdhury, the former Commerce Minister, Government of Bangladesh. More than 100 persons were invited for the opening. Members of the Dutch-Bangla Chamber of Commerce & Industry (DBCCI), presidents of different chambers and business associations and members of the visiting Netherlands Management Co-operation Programme delegation were among the invitees. Presidents of Federation of Bangladesh Chambers of Commerce & Industry, the apex body of business associations and DBCCI were invited as special guests.
Around 600 persons visited the show. Visitors ranged from prospective customers to onlookers. The product for which the Embassy received most response was the agro- processing plant along with a list of prospective joint venture partners. Considering the uncertainty over the phasing out of Multi Fibre Arrangement, a number of entrepreneurs would like to diversify their businesses and their preferred area is the agriculture sector. There were also demands for poultry related items, chemicals and pharmaceutical raw materials.
The year 2004 will be an exciting year for business relations between Bangladesh and the Netherlands. There will be three more catalogue shows organised in Chittagong, Khulna and Sylhet. This provides the local business community with a great opportunity to get acquainted with some of the export products of The Netherlands. The possibility of funds from the PSOM and the new ORET programme will give new opportunities to strengthen the private sector in Bangladesh and thus enhance trade and investment between the two countries.
|