Will Bangladesh get $60 billion US DFC?

For the first time since the formation of the interim government under the leadership of Chief Advisor Dr. Muhammad Yunus, a high-level U.S. delegation arrived in Dhaka on Saturday.

The delegation, led by the U.S. Treasury's Assistant Under Secretary, also includes the Assistant Secretary of State for South and Central Asian Affairs. The focus of the visit is U.S. investment, with the decision on a $60 billion investment from the U.S. Development Finance Corporation (DFC) potentially being finalized.

Following the political shift in Bangladesh on August 5, the United States is placing emphasis on strengthening relations with the new government, particularly through financial and economic cooperation. Washington seeks to ensure that Bangladesh regains economic stability and continues its development journey.

The U.S. delegation, led by Brent Neiman, the Assistant Secretary of the Treasury Department, consists of five high-level officials. In addition, Donald Lu, the Assistant Secretary of State for South and Central Asian Affairs, arrived in Dhaka later in the afternoon to join the discussions.

This visit primarily focuses on enhancing Bangladesh-U.S. relations and economic cooperation. Although the U.S. government did not maintain the warmest of ties with the previous Awami League government under Sheikh Hasina, diplomatic circles note a more favorable understanding between the U.S. and the current interim government leader.

A spokesperson for the U.S. State Department mentioned that discussions will revolve around how the United States can contribute to Bangladesh’s economic growth, financial stability, and development priorities. During his visit, Donald Lu is expected to reaffirm the U.S.'s commitment to promoting economic growth and stability in the Indo-Pacific region. He will be joining an inter-agency delegation to meet with the interim government in Dhaka.

The delegation also includes representatives from the U.S. Treasury Department, USAID, and the U.S. Trade Representative's Office. Talks will focus on the progress of bilateral relations under the new political scenario.

On May 10, 2022, then-U.S. Ambassador Peter D. Haas said at a seminar during the U.S.-Bangladesh Business Forum that the U.S. Development Finance Corporation (DFC) had been established with congressional approval to invest $60 billion.

However, he added, "Unfortunately, until Bangladesh qualifies for GSP (Generalized System of Preferences), it will not be eligible for DFC financing. We hope that Bangladesh will soon make progress on labor rights and workplace safety, which will allow the country to qualify for DFC investments and attract more trade and investment from the U.S."

The DFC works with U.S. businesses to create projects in sectors such as energy, healthcare, critical infrastructure, and technology.

Foreign affairs analysts believe that the U.S. government's good relations with Chief Advisor Dr. Muhammad Yunus and most of the other advisors, along with their business forums, will play a crucial role in determining how favorable the U.S. finds the current investment climate in Bangladesh. The focus of the U.S. delegation's visit is to assess Bangladesh’s suitability for investment.

There are four key reasons why the U.S. considers it an opportune moment to invest in Bangladesh. Firstly, Bangladesh has emerged as one of the fastest-growing economies in the world. Secondly, the country boasts a large and rapidly expanding middle-class population. With a population of 170 million, Bangladesh is now the eighth most populous country in the world, having more than twice the population of the United Kingdom and four times that of Canada. Companies establishing their presence in Bangladesh now will likely secure long-term returns on their investments for generations to come.

Thirdly, Bangladesh offers a motivated and eager workforce. The country’s workforce is young, and the number of well-educated individuals is continually increasing. Finally, companies entering this market early will face less competition compared to more mature investment destinations, providing them with a significant advantage.

The Bangladeshi government considers this U.S. delegation’s visit highly important for the country’s future economic growth. Dhaka is preparing for extensive and multifaceted discussions, welcoming the delegation. The U.S. team is scheduled to meet with Chief Advisor Dr. Muhammad Yunus, Foreign Affairs Advisor Tawhid Hossain, Finance Advisor Dr. Salehuddin Ahmed, and other relevant officials.