Economic and Political Engagement in Bangladesh
For 50 years, the Netherlands and Bangladesh have maintained a productive and friendly partnership. As one of the fastest-growing economies in the Indo-Pacific region, Bangladesh will graduate from the Least Developed Countries Group in 2026 and increasingly exhibits market opportunities for foreign companies, including for the Dutch private sector. The bilateral relationship with Bangladesh is therefore shifting from traditional development cooperation towards a relationship of equal partners with a focus on bilateral trade, investments and knowledge exchange.
The rapid economic growth results in Bangladesh exploring the potential to expand its global trade, including with non-western markets. However, Bangladesh still ranks very low on most indexes that cover ease of doing business. The Netherlands is actively working with the key stakeholders to support Bangladesh in improving safe working conditions and labor rights (incl. living wage and purchasing practices), capacity building in relevant agricultural value chains, business opportunities for women and skills development for young entrepreneurs.
As one of the fastest-growing economies in the Indo-Pacific, Bangladesh exhibits increasing potential for FDI and market opportunities, including for Dutch private sector (esp. for agriculture-focused companies). Simultaneously, the public and private sectors in Bangladesh are keen to learn from and engage with the private sector in the Netherlands. In 2020, Netherlands exported USD 251 millions to Bangladesh while Bangladesh exported USD 1.46 millions, majority of the products are related to ready made garments. The Netherlands is currently Bangladesh’s 5th largest FDI source country with an investment stock of 1432 millions as of June 2022.
For sustainable LDC graduation, the NL recognizes the need for transparency and accountability in instilling good governance. The NL supports civil society organisations that promote such values, and facilitates an enabling climate for Bangladesh to become part of the rules-based international order. In 2022 and 2023, The Netherlands and Canada are co-chairs of the Media Freedom Coalition, a cross-regional partnership of countries to advocate for media freedom. The MFC was established in July 2019 and now comprises over 50 member states from six continents and is a cross-regional partnership of countries to advocate for media freedom. The collaboration with the MFC member states in BD was launched on the 9th of February 2023 to promote media freedom.
Climate
In the current collaboration between the two deltaic countries climate is a central theme. Where the focus until now has been on adaptation, the Netherlands recognizes the urgent need for worldwide mitigation action. The 13th Emissions Gap Report of the UN Environment Programme shows that current policies lead to a 2.8°C temperature rise by the end of the century. To curb this Dutch diplomacy efforts and mitigation actions are ever more relevant. The embassy in Dhaka aspires to show climate leadership in practice.
The Netherlands has devised an International Climate Strategy to concretize actions and ambitions describing how to contribute to the global transition to net-zero emissions and a fully circular economy in 2050. In Bangladesh the mitigation focus lies on the agriculture, waste and energy sectors. Within these three sectors the Netherlands is positioned as a partner for green solutions, especially in niches left untouched by other development partners. To do so, existing instruments and diplomacy tools are used to increase climate mitigation ambitions and accelerate the necessary transitions in Bangladesh. Furthermore, that entails collaborating with innovative businesses, climate youth, Dutch ambitious green SMEs and other unfamiliar frontrunners to accelerate the green transition.
The aforementioned ICS serves as a handbook to the climate activities undertaken by the embassy. This is reflected in the extensive portfolio on climate adaptation through improved water management and climate-smart agriculture. As extensively covered in the Bangladesh Water Management and WASH timeline water management has been one of the focal points of NL-BD collaboration, thereby also improving the climate resilience of the nation. In the near future nature-based solutions and locally led adaption will supplement already existing practices implemented in policies and projects. However, besides water management climate adaptation efforts will also venture into other sectors where the Netherlands has added value in improving climate resilience. In both current and new initiatives the leverage of climate adaptation funds, including mobilized private capital, requires additional attention and effort.
Climate is one of the central themes for NL engagement in Bangladesh and is thus mainstreamed in all activities of NL in Bangladesh. As a cross-cutting theme climate action will not only be pursued in sectors such as agriculture, water and RMG but will be also mainstreamed in PSD & trade, water management, political affairs, human rights, migration, gender and culture. Besides climate mainstreaming the Netherlands should be viewed as prominent climate adaptation partners and play a support role in Bangladesh’s sustainable path to higher middle-income status. This will be done through specific climate activities as part of four pillars, being climate adaptation, climate mitigation, climate financing through facilitating improved access of Bangladesh to climate finance instruments, and climate advocacy & diplomacy through for instance the Team Europe Initiative on Green Energy.
Water
Water management, including water supply and sanitation, still plays a central role in the bilateral cooperation between NL and BD.
In 2018, Prime Minister Sheikh Hasina approved the Bangladesh Deltaplan 2100, which was formulated with the support from the Netherlands and inputs by the broad community of BD and NL experts. This ambitious plan aims to “ensure a long term water and food security economic growth and environmental sustainability while effectively reducing vulnerability to natural disasters and building resilience to climate change and other delta challenges issues through robust adaptive and integrated strategies and equitable water governance”.
The current BD-NL bilateral collaboration focuses on the implementation of this plan by building the capacities of BD institutions (14 ministries are involved), collaboration with IFIs to secure funds for implementation (aimed at approximately 2,5% of GDP), and knowledge generation that is required for implementation and which may also be relevant for NL in its efforts to protect the country from climate impacts. The MoU between BD and NL on delta collaboration that was signed in 2012 has been renewed in February 2023 and is valid for another 10 years.
Thematically, NL focuses on three areas: 1) water for improving and sustaining agriculture production, especially in the coastal belt, 2) river management and stabilization, and 3) water supply and sanitation. Local ownership and sustainability of results is promoted through participatory water management and establishment of water management groups, and through creating an enabling environment for local private entrepreneurs investing in and operation and maintenance of small grids.
Overall, we expect ODA funds will be phased out by 2030. To secure water-collaboration after 2030, NL is actively seeking opportunities for the NL water sector (private sector, civil society, financiers and government agencies) to remain involved in the BD water sector and the BDP2100. Especially the collaboration with IFIs is important to provide opportunities for the NL water sector to showcase its specific and unique expertise, for instance related to Building with Nature and advanced water treatment technologies. NL organizes trade missions and teams up with FMO and Invest International to bring the Dutch private Water Sector onboard in Bangladesh. In the meantime, we continue to work with universities, knowledge institutes and Rijkswaterstaat and water utilities on a government-to-government basis.
Gender
NL strives to strengthen civic space and enhance gender equality and women and youth empowerment in Bangladesh. Specifically, NL seeks to achieve the following results: 1) contributed to reduced gender-based violence, child marriage and negative gender stereotypes, 2) support to increased meaningful participation of women and youth in the job market, business and trade and decision-making processes to foster inclusive development and sustainable trade, and 3) contributed to enabling civil society to speak out on sensitive issues.
Gender equality is being mainstreamed throughout all activities of NL in Bangladesh. NL also pays attention to equal representation of men and women in panels, missions and other public engagements. The achievements and importance of women are frequently highlighted through public diplomacy.
- Gender in human rights & migration: women’s rights and gender equality are central to NL advocacy in Bangladesh. Human rights advocacy on Freedom of Expression and related concerns; promotion of female human rights defenders and journalists, encourage and strengthen the exchange between men and women active in the human rights sphere and support the capacity-building of women and other marginalized human rights defenders are key initiatives. NL humanitarian diplomacy continues to focus on improving the security situation of women and girls, promote gender-responsive programming, support female Rohingya human rights defenders and survivors of gender-based violence and advocate for the prevention of sexual exploitation, abuse, and harassment by humanitarian workers (PSEAH). Conflict-sensitivity, the accountability to affected populations and a survivor-centered approach remain central to the NL engagement in this sphere. LGBTQI+ topics will also remain a focus through the strategic partnerships and silent diplomacy.
- Gender in PSD & trade: women’s rights and gender equality are central to the NL PSD activities in Bangladesh, both programmatically and in advocacy. NL continues strategically promote women in trade, e.g. by promoting (networks of) female entrepreneurs, endorsing female business leaders, building the capacity of women in specific (male-dominated) sectors and facilitating female-led/gender-balanced events and trade missions. NL continues to consider these interventions in a context-specific way and in close coordination with implementing partners with relevant expertise.
- Gender in climate, water & agriculture: women are disproportionately affected by the impact of climate change and climate-related disasters. NL therefore, continues to include and prioritize women and youth as stakeholders and partners in (adaptation) interventions, and to invest in their meaningful and profitable participation. Knowledge exchange and skills building of women and youth in the water and agricultural sector remains key to strengthening the gender impact of these interventions. Support in increasing their empowerment in decision making processes at GoB levels, e.g. by advocating for a more inclusive workforce in projects remains as an strategic engagement in Bangladesh. NL prioritizes women’s rights and gender equality in Integrated Water Resource Management (IWRM) and WASH-related activities and continues to conduct gender analyses and gender-responsive MEL across all climate, water and agriculture activities.
Food security and agriculture in Bangladesh
Over the past three decades, Bangladesh has made substantial progress in improving food security and nutritional status of its population. Food production has more than kept pace with population growth despite almost doubling of the population. Bangladesh has broadly achieved self-sufficiency in food at least in terms of per capita calorie availability at the national level. Rising incomes and declining incidence of poverty indicate that access to food has also improved over time. Real wage rates of agricultural labour have almost doubled during the period 2000-2015. Rapid economic growth has enabled Bangladesh to reach the lower middle-income country status in 2015 and the country is on track for graduation from the UN’s Least Developed Countries (LDC) list in 2024. Substantial progress has also been made in improving the nutritional outcomes. Indicators of malnutrition such as the rates of stunting and wasting among children under five-years of age have declined over time. For example, the prevalence of undernourishment has declined from 35% in 1990-2002 to 14.7% in 2016-18 (FAO 2019). Similarly, the incidence of stunting among children under five years of age decreased from 51% in 2004 to 31% in 2017-18 (BDHS 2019). These indicate a commendable progress in achieving food and nutrition security in the past. Despite these impressive achievements of the past, Bangladesh still faces daunting challenges for ensuring food and nutrition security of its current population of around 160 million which is projected to reach over 186 million by 2030. There are several emerging trends that are likely to further increase the challenges for overcoming food and nutrition insecurity in the future. These include continuing population growth, increasing income inequality, deceleration in agricultural productivity growth, increasing scarcity of agricultural labour resulting from internal and international migration, likely adverse impact of climate change on food productivity, increasing pace of urbanization that will result in urban population becoming more reliant on the smooth functioning of the market chain to access food, and rising concerns regarding food safety.
NL implemented a number of Food and Nutrition Security (FNS) flagship projects in Bangladesh in last decade. In 2012, the Food Safety initiative was launched by EKN in response to serious and emerging concerns about the public health, adulteration and unsafe use of pesticides in Bangladesh that year, and it was followed by several multicomponent interventions such as SaFaL (Sustainable Agriculture, Food Security and Linkages), Profitable Opportunities for Food Security (PROOFS), Krishi Utsho and Scaling Up Rice Fortification projects. In the subsequent multi-year strategic plan, EKN used the Netherlands' expertise in the water and agriculture sectors to position the FNS programme and sharpen its focus on private sector development and trade. In addition, to introduce and test the food systems approach (FSA) to FNS programming in real-world settings for the first time, the Dhaka Food Systems (DFS) project was put in motion in 2018, in collaboration with Wageningen University & Research (WUR) and UN Food and Agriculture Organization (FAO). Overall, in addition to direct FNS funded projects in Bangladesh, EKN has supported projects on FNS topics with integrating water funding such as Char Development and Settlement Project (CDSP), Blue Gold, South West Area Integrated Water Resources Planning and Management Project (South West) and the Gender/SRHR fund such as Making Markets Work for Women (MMWW), Rice Fortification, and Image. In addition, these efforts have been strengthened through centrally-funded instruments such as Nuffic, ARF, G4W, CGIAR, PUM, IGG funds and RVO programmes. Throughout period, EKN’s FNS programme has collaborated with more than 30 governmental partners, more than 20 NGOs and private sector players, and roughly ten academic institutions at the national, district, sub-district, and local levels. All these Dutch initiatives significantly contributed to address malnutrition, micro-nutrition deficiency, dietary diversity and food safety challenges in Bangladesh.
Rohingya
Since approx. 700.000 Rohingya fled from Myanmar to Bangladesh in 2017, NL has been a strong supporter of the humanitarian response for these refugees in Bangladesh. NL is also promoting international accountability for the atrocities committed against the Rohingya in Myanmar.
Since the coup in Myanmar in February 2021, the return prospects for the 1 million Rohingya refugees have diminished. Hence, the crisis is becoming increasingly protracted, which results in rising and diversifying needs and will remain a continuous risk of instability for the region. Tensions between the host communities and refugees persist, while funding for the humanitarian response as well as international attention for the Rohingya crisis is decreasing. Bangladesh is therefore increasingly growing impatient and continues negotiations with the Myanmar military about the return of the Rohingya. Simultaneously, there seems to be a slightly increasing willingness by GoB to discuss and permit livelihood opportunities, skills development and education for the Rohingya – a willingness that the international community can use to improve the self-reliance of the refugees.
Continuing to engage with Bangladesh on this issue and supporting the refugee and host communities will remain key in the years to come in order to mitigate the risk for instability which the crisis poses to the region. Three points of attention are key in this respect: 1) the risk of violent extremism spreading in the camps as a result of lack of perspective among the refugees, 2) the risk of the armed conflict in Rakhine reigniting the conflict in the Chittagong Hill Tracts, 3) the presence (and involvement in organized crime) of armed groups from Myanmar in Bangladesh and 4) the risk of refugee-host community tensions as a result of a lack of opportunities and a perceived deterioration of the socio-economic and environmental conditions in the Cox’s Bazar district.
Current NL-BD cooperation:
- NL unearmarked humanitarian contributions are also reaching the Rohingya Response. Most important in this respect are the NL contributions to UNHCR and the Central Emergency Response Fund (CERF). NL is the third-largest donor of CERF. The most recent contribution from CERF to the Rohingya Response were USD 9M in November 2022.
- IOM project: “Restoring the environment and strengthening resilience of Rohingya refugees and host communities in Cox’s Bazar”
- Innovative approach by integrating MHPSS in disaster risk reduction (DRR).
- ILO/FAO project: “Strengthening Skills and Entrepreneurship in Agro-Food Systems for the Host Communities and Rohingya People in Cox’s Bazar”
- Innovative approach by seeking to encourage certified skills development and livelihood opportunities in the spirit of the PROSPECTS approach developed by NL in the MENA region.
- Country Strategy of the Dutch Embassy 2019-2022