US Ambassador to Bangladesh Peter Haas has said that free and fair elections simply cannot take place in an environment with political violence, noting that ensuring free and fair elections is everyone's responsibility.

"If any one of them fails to fulfil their responsibility or if any one of them prevents another from fulfilling their responsibility, free and fair elections would become nearly impossible," he said.

It is important for everyone - demonstrators, political parties, the government, and law enforcement - to respect the rule of law and to refrain from violence, harassment, and intimidation, Haas said, making it clear that the United States "does not favour" any particular political party.

The US envoy made the remarks at the "Meet the Ambassador" event organised by the Centre for Governance Studies (CGS) in collaboration with Friedrich-Ebert-Stiftung (FES) Bangladesh at a city hotel on September 29, 2022. Representatives of political parties, academics, former diplomats and business leaders were present.

CGS Chairman and Chairman of the National River Protection Commission Manjur A Chowdhury, Resident Representatives of FES Bangladesh Felix Kobiz also spoke while the conversation was moderated by CGS Executive Director of CGS Zillur Rahman.

Ambassador Haas said the Election Commission, government, media, law enforcement agencies, civil society and political parties - everyone has an important role to play.

Ambassador Haas said the recent violent clashes at political rallies and demonstrations here in Bangladesh remind them of this fact.

He said the promotion of democracy is particularly relevant as Bangladesh looks toward the upcoming parliamentary elections.

"What we want is a free and fair election conducted in accordance with international standards where the people of Bangladesh can freely choose their own government."

Talking further on the elections, he said: "I keep saying free, fair and transparent elections in accordance with international standards. I am happy to add inclusive on it."

Haas noted that the number of extrajudicial killings has significantly changed since the sanctions imposed in December last year which he sees as a very good signal.

He said the sanctions imposed by the US against RAB and seven of its former and current officials are not intended to punish but to change the behaviour and hold them accountable.

The US touched upon various aspects of Bangladesh-US relations including trade, labour rights, regional and global politics, and Indo-Pacific Strategy.

Bangladesh has made remarkable progress in terms of workplace safety in the export oriented industries, he said, adding that the US still has concerns in the area of labour rights.

Responding to a question, Ambassador Haas said there has been no change in their policy and sanctions are still in place.

And, he said, sanctions will remain in place until there has been accountability and reform.

"We are looking for accountability for the past incidents," said the US envoy.

Several journalists also asked about the US's views on India's decision to buy energy from Russia and Bangladesh's stance on the BRI and other issues.

The ambassador expressed that many have misconceptions about the US sanction on Russia where oil, gas, and agricultural products are not part of the sanction.

He added that the BRI issue is Bangladesh's decision to make and the US has no say in it.

Certainty and Security

Ambassador Haas has said a smart company considering doing business overseas will certainly want "certainty and security" as political violence and electoral instability "scare" them.

He said a smart company considering doing business overseas also wants to see certain things, including a developed transportation system, consistent access to power and water, and a well-trained workforce and Bangladesh has made great strides in filling these needs.

The US envoy said the international companies and investors must become more aware of the opportunities Bangladesh presents.

"Bangladesh must be ready to welcome American businesses," ambassador Haas said while speaking at a programme hosted by International Business Forum of Bangladesh (IBFB) at a city hotel on September 27, 2022 as the chief guest.

Founding President of IBFB Mahmudul Islam Chowdhury, Chairman of Policy Research Institute of Bnagladesh Dr Zaidi Sattar, Ambassador and Head of Delegation of the European Union Charles Whiteley, IBFB President Humayun Rashid and its Vice President MS Siddiqui also spoke.

Hailing Bangladesh's economic progress over the years, ambassador Whiteley said the country needs to work ensuring equal level playing field for both local and overseas investors.

He said the EU wants to work with Bangladesh for her smooth transition from the LDC. "EU wants to boost commercial ties further as the largest trading partner of Bangladesh."

Ambassador Haas said there are strong reasons to look at Bangladesh for market opportunities and Bangladesh is worthy of their attention.

"Even in these challenging times, Bangladesh has a great macroeconomic story to tell. It has been among the fastest growing economies in the world over the past decade," he added.

Its GDP grew even during COVID-19 lockdowns, and, according to the Asian Development Bank, the economy is estimated to grow by 6.6 per cent over the next year.

The country's financial leaders have so far managed its debt well and are taking important steps to deal with the inflationary pressures resulting from Russia's unprovoked invasion of Ukraine.

"Yes, times are tough. And as the World Bank recently pointed out, Bangladesh needs additional reforms in order to maintain its economic expansion going forward. But so far, the macroeconomic situation seems manageable," said the US envoy.

Haas said they at the Embassy are focused on key objectives - a peaceful and stable Bangladesh, a Bangladesh that is committed to democracy, transparency, pluralism, tolerance, good governance, and respect for human rights; a socially and environmentally resilient Bangladesh and supporting Bangladesh's efforts to host the Rohingya refugees and until a safe, voluntary, and dignified return to Myanmar is possible.

"Each of these first four goals underpins our fifth goal: supporting Bangladesh in its efforts to achieve sustainable and broadly shared prosperity, improve labor standards, expand and diversify Bangladesh's economy, and open it to greater regional and global trade and connectivity," he said.

Haas said many U.S. and international businesses want to expand in the region and they want to help Bangladesh create a business climate that is as welcoming as possible to foreign investment. "Clearly Bangladesh has a lot to offer international businesses."

The ambassador said the Bangladesh Investment Development Authority has recently signed a Memorandum of Understanding with U.S.-based Anchorless Bangladesh to tell Bangladesh's story to international investors.

"But the other question is: Is Bangladesh ready to welcome investors, facilitate their entry into the market, and make life as easy as possible for those who have already invested?"

As Bangladesh graduates to middle-income status, ambassador Haas said, it will find it has many competitors also hungry for international business. "It's one thing to build a special economic zone, but that alone is not enough to attract the best investors."

Prime Minister Sheikh Hasina addressed the U.S.-Bangladesh Business Council in New York last week.

In her speech, she noted that Bangladesh is continually working to improve its physical, legal, and financial structures in order to improve the investment climate here.

"The entire business community - both in Bangladesh and internationally - welcomes this commitment," said ambassador Haas, adding that the United States stands ready to assist these efforts in whatever way they can.

At the 16th Annual General Meeting (AGM) of the IBFB, participants laid emphasis on further improvement of business climate to create more jobs through attracting global investors.

They also called upon the policymakers to bring necessary changes and implement those with replicating successful RMG (readymade garment) model to other export-oriented sectors making them more competitive enough.

Terming export diversification key for sustainable growth of the economy, Chairman of Policy Research Institute (PRI) Dr Zaidi Sattar said Bangladesh needs to replicate the successful RMG model to other non-RMG sectors.

He also suggested rationalization of the tariff structure.

IBFB President Humayun Rashid said the private sector is considered as the engine of economic development in a developing economy.

Vice President (Finance) Lutfunnisa Saudia Khan and President, IBFB Chittagong Chapter SM Abu Tayyab were present.

Next big factor for Bangladesh's economic growth

Ambassador and Head of Delegation of the European Union (EU) to Bangladesh Charles Whiteley has said preparing for quick access to GSP Plus in the EU market is the next big factor for Bangladesh's future economic development.

The graduation from LDC status in 2026 would also mean graduation from the current Everything but Arms (EBA) unilateral trade preference given to Bangladesh by the EU, which is Bangladesh's largest export destination.

"The graduation would imply a substantial trade loss and serious shock to the country's GDP, which could be mitigated through inclusion in the GSP+ arrangement," said the EU envoy.

Attracting foreign direct investment and technological know-hows would be key to reduce dependency on single basket RMG exports and move towards industrial diversification, said ambassador Whiteley.

For this to happen, he said, a level playing field for both local and foreign sectors is necessary. "Addressing the woes of existing foreign investors is also important. We continue to engage with the government authorities in this area in our bilateral business dialogue."

There are some quite stringent requirements for GSP Plus accession and the great thing is Bangladesh has already ratified the 32 conventions that are now required for GSP Plus membership, said ambassador Whiteley.

"Now the next stage is implementation. This in particular refers to implementing the National Action Plan for the Labour Sector, which the Government has agreed with the EU," he said.

Implementing this National action plan on labour reform would help to keep Bangladesh ahead in the race in meeting the emerging sustainability requirements in the EU market, including the new Due Diligence Directive, which will legally require EU companies to clean their supply chains from labour and environmental violation, said the EU envoy.

"We continue to engage with the Government of Bangladesh and support actions and tools to navigate these challenges," he said.

The EU envoy hoped to open a European Chamber of Commerce in Bangladesh very soon and such a body, which already exists in Vietnam, India and Singapore, has been missing in Bangladesh.

Once it is operational, the envoy said, it will be another locus for advising and supporting European and Bangladeshi businesses to prepare for GSP Plus and the legislative changes in the pipeline. "It would be a useful addition to boost EU-Bangladesh commercial relations."

In Fiscal year 2021, EU was the largest source of net FDI flows to Bangladesh, according to the Bangladesh Bank.

A recent analysis by a local think-tank is showing that the net FDI flow from EU countries reached $3.5 billion over the past 5 years, which represents around a quarter of all FDI flows in this period.

"EU FDI in Bangladesh looks promising, but compared with $6 billion EU investment in Vietnam during the same period, it is far from being ideal for a country that needs massive FDI inflow to avoid a middle-income trap and continue economic upgrading," said the EU envoy.

There are both direct and indirect barriers that limit the potential of EU investment in Bangladesh, he said.

"Barriers to foreign investment are intrinsically the barriers to Bangladesh's economic development," said the EU envoy.