EU calls for bold budget, reforms to boost investment

The European Union (EU) on Wednesday stressed the need for a sustainability-driven budget aligned with business reform goals to address the ongoing challenges and attract investment.

Bangladesh is entering a new phase of its economic journey, with the challenge of creating decent jobs, developing a skilled workforce, and attracting high-quality investment to move up value chains.

The country needs to diversify its economy, ensure a clean energy transition, and effectively prepare for graduation from its current country status while transparency, regulatory predictability, and adherence to best practices, supported by the rule of law and an independent judiciary, will set the stage for success.

Michael Miller, Ambassador and Head of the Delegation of the European Union to Bangladesh, made the remarks while speaking at the inauguration of the two-day 'Bangladesh Denim Expo' at the International Convention City Bashundhara (ICCB) in Dhaka.

Right incentives and policies are needed to remove distortions, raise revenue, accelerate investment and diversification, and increase the equality of public expenditure and consumer interest, he noted.

Underscoring the European Union's perspective on Bangladesh's evolving economic journey, he said, "We hope to see a bold, sustainability-driven vision in the budget - one that aligns with the European Union's expectations for the creation of a level playing field for our operators and takes decisive steps to improve the business environment."

Mr Miller also announced a significant diplomatic development, saying that he had conveyed an invitation from the European Commission President to Prime Minister Tarique Rahman to attend the next Global Gateway Summit in Brussels.

He further noted that the EU is currently assessing Bangladesh's request for a free trade agreement, building on the recently initiated Partnership and Cooperation Agreement, reaffirming the EU's commitment to a reinforced economic partnership with Bangladesh.

The European Union is diversifying supplies and reducing single country dependencies at a time of geopolitical uncertainty, he said, adding that Bangladesh has the opportunity to position itself as a reliable and strategic partner.

Terming the EU Bangladesh's largest market, largest source of foreign direct investment, and largest provider of grant aid, he said the EU is not raising tariffs unpredictably.

He further stressed the importance for safeguarding labour rights, protecting the environment, mitigating climate change, and ensuring the health of its citizens, as consumers increasingly focus on ethical production and sustainable practices.

Speaking at the event, BGMEA President Mahmud Hasan Khan highlighted Bangladesh's remarkable position in global denim trade while sounding a clear note of caution regarding the country's impending LDC graduation.

"Bangladesh is now the largest exporter of denim to both the EU and the United States, ahead of China," he said.

Talking over approaching LDC graduation, he said, "The preferences we currently enjoy will change after graduation. If we are not prepared, the industry will feel the impact. The RMG sector is currently the biggest beneficiary of preferential market access. In the post-LDC era, without the appropriate trade arrangements in place, the apparel industry risks becoming the biggest loser."

The challenges ahead - LDC graduation, value addition, sustainability, innovation - cannot be solved by one side of the table, he said, adding they require brands and buyers to work jointly, not merely auditing, while development partners to invest, not merely advising and government to stand, not merely regulating.

Javier Santonja Olcina, Inditex Regional Head for Bangladesh and Pakistan, underscored the need for increasing Bangladesh's speed to market, saying the country still lags behind its competitors, by improving infrastructures, developing modern airport cargo facilities and faster customs clearance.

munni_fe@yahoo.com