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6 years ago

Taking trade relations with Austria to new height

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The recent holding of Bangladesh-Austria Economic and Trade Forum can be deemed as one of the new commencements of bilateral relations between these countries. Austria as an European Union (EU) country has been contributing to Bangladesh's economy since its liberation, but the bilateral trade and business relations didn't pick up to a mentionable extent. As per Statistik Austria in 2016, the country's export to Bangladesh was ?€120 million against the import figure of ?€634 million.

Interestingly, the difference between export and import data from Bangladesh end and Austria end is huge. As per the Bangladesh trade statistics, import value from Austria is higher than export to the country. But as per Austria trade statistics, the scenario is completely the opposite. The reason is, we in Bangladesh calculate country-wise export - not the re-export data.

Germany and Austria are two neighbouring countries. Bangladesh exports to Germany and those goods are re-exported to Austria from neighbouring Germany. As Austria is an EU member, sometimes export to Austria is treated as export to the EU. As per Advance Austria data, trade volume amounts to about €750 million or BDT 78,230 million between Austria and Bangladesh.

Austria is an export-oriented country as more than 50 per cent of the gross domestic product (GDP) is contributed by exports. This high rate of exports could not have been achieved had the Austrian companies not been the world-class partners as they are today. This is why, they termed their companies surprisingly ingeneous.

Private companies in Austria are naturally large and they do fund for running Chambers. For example, Advantage Austria is the organisational name of the Commercial Section at the Austrian Embassy. Organisationally, Advantage Austria is part of the Austrian Federal Economic Chamber (AFEC), which is in charge of setting up the commercial sections for the Austrian Embassies worldwide. Therefore, Advantage Austria has direct connection to businesses in Austria as the AFEC has around 500,000 member companies. Thus, the  nature and type of Chambers in Austria are different and not hundred per cent private.

The Austrian company representatives who visited Bangladesh are from various fields like railways, health, education, energy, banking and machine building. A good number of B2B (business-to-business) and B2G (business-to-government) meetings were arranged during the visit. The Austrian delegation also had meetings with  several  ministers including Finance, Health, Education, ICT and Commerce. The delegation also met with ADB, World Bank, Bangladesh Bank and others. A memorandum of understanding (MoU) was signed between the Federation of Bangladesh Chamber of Commerce & Industry (FBCCI) and the AFEC to pave the way for playing a vital role in connecting companies from both countries with each other and organising bilateral visits.

During the discussion, it was viewed that Bangladesh could take support for skills development, technology transfer and innovation as education in Austria is mostly oriented to heavy machineries and innovation - where Bangladesh apparently lags behind in terms of capacity. As we know, Bangladesh is now at the stage of take-off to be a middle income country (MIC) and needs to generate more income from capital-intensive production base, which is now labour-intensive only.

Imports from Bangladesh comprise of mainly garment and apparel items while Austrian exports to Bangladesh is driven by machinery and equipment for various industries. Major export items from Bangladesh to Austria in addition to RMG include fish, textile, footwear, painting material, basketwork, molluscs, carpets etc while major import items from Austria to Bangladesh include boilers, textile articles, electrical machinery, equipments, organic chemicals, animal foods, cereal, base metals, articles of base matels, zinc, fruit and vegetable juice etc.

It is encouraging to see that bilateral trade has been growing for the last few years, especially Bangladeshi imports to Austria, which clearly depicts Austria's open approach towards trade. In order to build a good bilateral relation with Austria, we need to have these type of meeting frequently to know each other in a much more detailed manner.

BUILD (Business Initiative Leading Development) has been the institutional partner of Advantage Austria for almost a year. The organisation supported Advantage Austria in organising the First Bangladesh-Austria Trade and Economic Forum recently in Bangladesh. As Austria does not have any embassy in Bangladesh, it covers Bangladesh from  their Indian offices.

Their offices in New Delhi, Mumbai, Chennai and Bangalore are part of a network of more than 110 offices in over 70 countries, which provide a broad range of intelligence and business development services for the Austrian companies. They  organise numerous events every year to bring business contacts together. Other services provided by their office range from introductions to Austrian companies looking for importers, distributors or agents to providing in-depth information about Austria as a business location and assistance in entering the Austrian market.

The friendship between Bangladesh and Austria exists for a long time. The nation of Austria extended their support to Bangladesh during the Liberation War in 1971. The engagement of the then Federal Austrian Chancellor Bruno Kreisky, who was later awarded the "Friends of Bangladesh" citation in 2012 is cherished with honour in Bangladesh. Diplomatic and trade ties between these two countries are gradually improving since Bangladesh's liberation.

Bangladesh, to give a new dimension to this relationship, opened its embassy in Vienna in 2014. The first ever bilateral talks between the two countries took place in October 2016 in Vienna to boost trade and investment between the two countries. Prime Minister Sheikh Hasina's visit to Austria in May 2017 led to the signing of a MoU between Bangladesh and Austria on Foreign Office Consultations (FOC) paving the way for cementing bilateral collaboration between these countries.

Although Austrian companies are active in Bangladesh and business interaction between the two countries are at a significant level, no official business delegation was sent to Bangladesh from Austrian end in the past. In this context, the first Bangladesh-Austria Economic and Trade Forum was held in Dhaka from February 25-28 this year during which the first-ever Austrian business delegation officially visited Bangladesh. The Economic and Trade Forum was arranged by Advantage Austria in collaboration with BUILD, which is the first ever public-private dialogue platform in Bangladesh.

Chaired by Prime Minister's Economic Affairs Adviser, the forum was attended by Commerce Secretary, Executive Chairman of BIDA, Austrian Ambassador to Bangladesh, CCCI President & BUILD Chairman, Former MCCI President, representatives from 13 Austrian companies and private sector stakeholders of Bangladesh.

Some core issues were also raised during the dialogue. As Bangladesh has qualified to become a MIC by 2024, it needs to concentrate more on research, development and innovation. Austria, on the other hand, needs L/C (letter of credit) confirmation for generating business from Bangladesh. Besides, there is no visa services available from Bangladesh as of now. A number of students are interested to visit Austria, but they fail to do so in most of the cases in absence of visa support.

A number of people at the Forum raised question as to why there are four offices in India, but not a single one in Bangladesh. Business entrepreneurs, willing to visit Austria, wanted direct visa facility from Bangladesh. Regarding the visa issue, it was discussed that some basic investigation can be done initially from here as was done in other cases through agent(s). It was also agreed to some extent that Austria's VFS Global centres can be engaged for pre-screening and bio-metric activities so that at least some problems can be resolved instantly.

The Ambassador designate of Austria, who was also the delegation leader, termed the event a historic one. She also endorsed the event as a perfect starting point to deepen business between the two countries and expressed willingness to spread the message to Austria raising awareness about Bangladesh, branding it as a very promising country for doing business. The participating Austrian companies were highly satisfied with the outcomes of their first official business mission here. They also had expression of interest to invest in Bangladesh.

Keeping the spirit in tact and maintaining the momentum is needed now so that Bangladesh can remain a genuine friend to Austria, address the language and visa barriers and can see a good flow of goods and services from Bangladesh to Austria and vice versa.

Ferdaus Ara Begum is CEO of BUILD.

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