The lackluster bureaucratic approach couple with outdated economic policies of Pakistan has resulted in the loss of $5 billion committed investment from Qatar’s Sovereign Wealth Fund (SWF) to Bangladesh. A sovereign wealth fund (SWF) is a state-owned investment fund that invests in real and financial assets such as stocks, real estate or in alternative investments such as private equity fund. The Qatar Investment Authority (QIA), established in 2005, manages the Qatar’s SWF to strengthen the country’s economy.
Pakistan and Qatar have well-established relations which are premised on a shared religion, cultural affinities and geographical proximity. Primarily due to frequent visits by leadership on both sides, particularly in recent years, the relationship has expanded to include political, security and economic dimensions as well. The $5 billion investment from Qatar was expected to bolster the development of power plants, refurbishment of airports and revamping of hotels in Pakistan. In 2019, a delegation from Qatar visited Pakistan to explore investment opportunities and expressed interest to invest in various sectors which resulted in the commitment of this mentioned investment from Qatar.
Though Pakistani-Qatari ties have always been on a smooth trajectory, Pakistan lost the $5 billion committed investment from Qatar. Despite having framework agreement between these two countries, no tangible progress has been observed on those projects since the 2019 visit. There is some food for thought on this case. Sluggishness in fund release and failure to comply with the conditions, such as failure to bring changes to the aviation ministry’s structure for Qataris to become airport shareholders, and Pakistan’s inconsistent policies cost them to loss of this investment to Bangladesh. Bangladesh has an attractive economic environment with political stability, investment security and facilitative policies that resulted in the diversion of this committed Qatari investment from Pakistan. Though Pakistani government denied the loss of this investment, but the news coverage on international media made it clear that Bangladesh has received $5 billion investment from Qatar which was committed to Pakistan.
Bangladesh is one of the promising Least Developed Countries (LDCs) having potentials to grow further. The Asian Development Bank ranked Bangladesh at the top among South Asian countries in its recent forecast. The economy of Bangladesh is growing with an on an average 6-7% rate from the last decade. Previously, financial institutions like the JP Morgan and Goldman Sachs branded Bangladesh as a frontier country. In becoming a member of the Frontier Five or Next-11, Bangladesh has made notable improvements in the investment climate, and established itself as an attractive frontier market with cheap labor cost and a large number of economically active populations. As a consequence, development of the export-oriented industries, like the RMGs, has been contributing to the stable GDP growth and created millions of low-paid jobs. The country has made remarkable progress in poverty reduction, supported by sustained economic growth. Recently, the World Economic Forum projected Bangladesh as the new “Asian Tiger”. However, Bangladesh reached lower-middle-income status in 2015 and is on track to graduate from the UN’s Least Developed Countries (LDC) list in 2026.
Diplomatic relations between Qatar and Bangladesh were established on 25 January 1978. Bilateral relations between the two countries have been developed and deepened gradually over the past years, especially through mutual visits at the Highest Levels. In comparison with Pakistan, Bangladesh is in better position in all frontiers which make the country capable of attracting the mentioned $5 billion investment from Qatar. The bilateral relations between Qatar and Bangladesh are resting on three salient grounds. Firstly, approximately 4 lakh Bangladeshis are working in Qatar and contributing to remittances. Secondly, the existing bilateral trade relations between the countries. At present, the trade volume has surpassed 1 billion USD. And thirdly, the existing co-operation and relations on various aspects, can be explained as an umbrella covering sectors such as education, health and tourism etc., between the states. To strengthen economic relation with Qatar, Bangladesh should emphasis on two crucial aspects. The country should mobilize economic diplomacy where it already has remarkable success such as exporting skilled and unskilled labors. And it should expand the grounds by extending the sectors that are covered under the umbrella. Extending grounds will create win-win situation for both states by strengthening and transforming the relations into sustainable ones.
Now, the question is whether it is possible to take the relations to such height or not? There are no subjects of conflict and both countries have warm relations which will add new dimensions to the existing relations. The current context is ripe for economic diplomacy to flourish. Qatar is willing to welcome skilled labor from Bangladesh. Bangladesh has already got the commitment for $5 billion Qatari investment. Regular communication channels between the states have been established and a fruitful inter-ministry dialogue on aspects of relations between two foreign ministries took place in earlier this year. All of these issues provide positive answer to the question of enhancing bilateral relationship between Qatar and Bangladesh. Finally, Bangladesh should learn from the mistakes of Pakistan that resulted in loss of $5billion Qatari investment and take timely actions along with proper policies to release the funds.
