Similarly, Bangladeshi delegations have also visited Saudi Arabia. After each visit, the government has expressed great expectations and promises regarding attracting Saudi investment. However, this has translated into very little in reality. Between 2018 and 2023, Saudi Arabia's accumulated investment in Bangladesh increased by just over 5 million dollars.
According to data from Bangladesh Bank, by the end of 2018, Saudi Arabia's accumulated investment (FDI stock) in Bangladesh was 226.57 million dollars. By the end of 2023, this amount had risen to 231.78 million dollars. Therefore, in these five years, Saudi Arabia's FDI stock in Bangladesh increased by only 5.21 million dollars.
According to Saudi officials, while there is interest, the behavior of the past Awami League government towards Saudi investors has, in many cases, been counterproductive to attracting investment. On January 5, the Ministry of Foreign Affairs organized a seminar on foreign investment interest in Bangladesh. Participating in the seminar, Issa bin Youssef Al-Duhailan, the Ambassador of Saudi Arabia to Dhaka, shared the experience of Aramco, a global giant in the energy sector and a state-owned Saudi company. He stated that an Aramco high-level delegation visited Bangladesh thrice between 2016 and 2018, but none were welcomed.
Saudi Ambassador Issa bin Youssef Al-Duhailan said Aramco is still interested in coming to Bangladesh. He said, "The company wants to set up an oil refinery in the Bay of Bengal. If an oil refinery is here and fuel products are produced, they can be supplied to Bangladesh and surrounding regions. Creating a sea route between Chattogram and Jeddah or Dammam will significantly change Bangladesh and the region. The products from this refinery could be sent to China, India, and neighboring countries."
According to Dr. Delwar Hossain, a professor in the Department of International Relations at Dhaka University, the lack of experience of Saudi investors in foreign investments has also played a role in this. He told Bonik Barta, "Although some Saudi investors have invested in this country, it is minimal. There has been much discussion about Saudi investments in various sectors, including infrastructure, but these have not been successful. One reason for this is the country's investment experience. Saudi Arabia's investment experience is relatively limited compared to countries like Japan or South Korea. While there is closeness between the two countries, there is a conceptual gap."
"Our connection with Saudi Arabia is deeply rooted in history. The Middle Eastern nation significantly contributes to remittances via its expatriate population. In addition to this, we are engaged in talks with Saudi Arabia concerning energy partnerships and investments. Nonetheless, investment relations are a significant element of Bangladesh's connection with the nation," he added.
Over one-third of Bangladesh's total migrant workforce heads to Saudi Arabia. Besides this sector, Bangladesh has not formed substantial economic relationships with the country. Nonetheless, the diplomatic and economic ties between the two nations have persisted for fifty years. Throughout this period, the volume of bilateral trade has been low. During the 2022-23 fiscal year, the trade volume between the nations exceeded 2 billion dollars.
Based on data from the central bank, Saudi Arabia invests in various sectors in Bangladesh, including banking, non-banking financial institutions, textiles and garments, and oil and gas. By the 2022-23 fiscal year, the FDI stock from Saudi Arabia in the banking sector reached 195.6 million dollars.
The Saudi Bangladesh Industrial and Agricultural Investment Company Limited (SABINCO) is also engaged in investment projects. Founded in 1984, this enterprise is co-owned by the governments of Bangladesh and Saudi Arabia. It has offered investment and loan assistance across multiple industries, including agriculture. The industries encompass cement, electronics and electrical items, food manufacturing and processing, glass and ceramics, steel and engineering, pharmaceuticals and chemicals, energy, textiles, telecommunications and IT, and furniture. Nevertheless, analysts think the total investment or loans the company has received since it was founded is insignificant.
Nahian Rahman, head of Business Development at the Bangladesh Investment Development Authority (BIDA), said to Bonik Barta, "Foreign investment in Bangladesh is low, not just from Saudi Arabia. The primary reason investments haven't materialized is the deficiency in the quality of the investment environment. If we can address these problems, investments will flow from every nation. I think that with enhancements to the environment, substantial investment will also come from Saudi Arabia."
"In numerous sectors, there exists an opportunity for investments from Saudi Arabia or other countries in the Middle East. Consequently, nations from the Gulf area, such as Saudi Arabia, rank highly on our list of priorities. Because there is a possibility of a huge investment coming from there," he added.
With the cooperation of the Ministry of Foreign Affairs, a private sector-based economic and investment consultancy, Policy Exchange of Bangladesh (PEB) recently prepared a report. The "Enhancing Saudi-Bangladesh Economic Engagement" report states that Saudi investors have shown interest in various sectors. These include infrastructure, power and renewable energy, electronics product manufacturing, hospitality, and education.
The report also mentions several challenges in attracting Saudi investment. Although the two countries agreed on several projects, there has been little progress or implementation afterward. The main issues for Saudi investors in Bangladesh include not getting land allocation on time, lack of supporting infrastructure, complex processes, and unusually long delays in obtaining necessary permits and services.
Other challenges include the lack of positive investment policies and business regulations, insufficient skills, complicated trade and customs processes, and the absence of tax-friendly systems.
Despite these challenges, the report states that Saudi investors are still interested due to Bangladesh's growing market and competitive sectors. However, investors see language and cultural barriers, trust in commitments, and the lack of regulation and accountability as problems when coordinating with Bangladeshi partners.
When asked, M Masrur Reaz, the Chairman and CEO of PEB, told Bonik Barta, "The potential between Bangladesh and Saudi Arabia is much higher than where their economic partnership stands now. Both countries have failed to utilize these potentials. Currently, the relationship mainly depends on remittances and importing petroleum or minerals. Bangladesh's exports to Saudi Arabia are very small. Similarly, Saudi investment in Bangladesh is also very low. Although Saudi Arabia is a high-income country with significant investment capacity, its demand for imports from various countries is also high."
M. Masrur Riaz pointed out that the two countries have also failed to utilize their religious and cultural connections for economic development. He said, "Both countries share several common spiritual ties, such as religious connections and people-to-people bonds. Around 3 million Bangladeshis live in Saudi Arabia, and millions of Bangladeshis visit Saudi Arabia for religious tourism. Despite such strong connections, Saudi Arabia, with its high investment capacity, has very low investment in Bangladesh."
Therefore, this analyst believes that to enhance the economic relationship between the two countries, it is necessary to take a well-thought-out approach through sector-specific analysis and planned actions.