Bangladesh deserves more attention than it gets
Bangladesh should receive more attention than it gets as the country has been posting steady economic growth amidst various challenges and is set to grow even faster in the next decade, said a top banker of HSBC.
Bangladesh has considerable growth potential and is likely to be the biggest mover in the global GDP rankings reaching 42nd position by 2030 from 26th place now, according to a recent report of HSBC.
“Bangladesh has a lot going for it,” said Matthew K Lobner, head of international and strategy and planning at the London-based lender for Asia-Pacific.
Bangladesh is the world's eighth most populous country and the economy has consistently grown in excess of 6 percent a year for the past decade. Bangladesh grew at a record 7.9 percent in the fiscal year that ended on 30 June 2018, making it the fastest growing economy in Asia, according to HSBC.
Lobner said demographic trends such as urbanisation, smaller households, technology, more women in paid work and children in schools are all positive with an increased ability to save and indulge in discretionary spending.
Sales of products such as air conditioners, washing machines and computers are on the rise. A new consumer class is emerging that wants to enjoy the better things in life.
With no major natural disasters last year, agriculture flourished along with the industries and power sectors.
The big challenges, power shortages and poor infrastructure, are starting to be addressed. For a country faced with such challenges – Bangladesh's economy has proved to be very resilient.
In addition, remittances from Bangladeshi workers abroad are helping to keep external account problems at bay while growth soars.
More attention should be given to the market, Lobner told The Daily Star in an emailed interview.
He said the bank expects the economy to grow by 8 percent in the current fiscal year. The key drivers of growth remain unchanged – exports and remittances.
Lobner has direct responsibility for 10 international markets in Asia: Bangladesh, Indonesia, Japan, Korea, Mauritius, New Zealand, the Philippines, Sri Lanka, Thailand and Vietnam.
He said the bank is committed to Bangladesh's growth and has been actively contributing to the economy by providing innovative financing solutions, mobilising credit for energy and power, telecom, infrastructure and export-oriented industries.
“We are not only helping Bangladesh's businesses and entrepreneurs to capture global opportunities, we are also helping global players take advantage of the Bangladesh opportunity.”
HSBC's global network, product coverage and balance sheet strength makes it uniquely positioned to help Bangladeshi companies, said Lobner, who joined HSBC Group in 2005 from McKinsey & Company.
“It enables us to be at both ends of import and export trade bringing greater efficiencies to the working capital cycle.”
Over the past five years, HSBC in Bangladesh has arranged about $143 million of export credit agency-backed financing in the private sector, creating a gateway to the international debt market for local conglomerates.
HSBC is the only bank which has presence in all of the export processing zones in the country, facilitating foreign direct investment flowing into the country.
The bank's contribution to the power sector includes more than $1 billion of financing to implement four new power projects for Bangladesh Power Development Board.
It is also continuing its support for cross-border electricity import of 250 megawatts from India, Lobner said.
“This has supported the government's plan to diversify the energy source to opt for low-cost fuel sourcing for power generation.”
In the telecom sector, the bank arranged 155 million euros in credit facilities to implement the country's first satellite project Bangabandhu-1. It has made possible the country's first commercial import of liquefied natural gas.
When asked what the impact of the US-China trade conflict on countries such as Bangladesh would be, Lobner said HSBC believes rules-based trade is mutually beneficial for economies and is the best way to support global growth and prosperity.
“Businesses like certainty, so we hope a fair and equitable resolution can be reached. Whatever happens, we will continue to help our clients navigate any changes impacting their business.”
HSBC's global footprint and its presence at both ends of the world's biggest trade corridors means the bank is uniquely positioned to help customers capitalise on emerging growth opportunities, said Lobner, who is also the group general manager.
He also shed light on sustainable business practices in HSBC.
Sustainable supply chain finance are practices and techniques that support trade transactions in a manner that minimises negative impacts and creates environmental, social, and economic benefits for all stakeholders involved in bringing products and services to markets.
An estimated 80 percent of global trade passes through supply chains – networks of customers and suppliers that contribute to delivering an end product or service to market.
“We want to operate in a world where global supply chains support sustainable economic growth by offering opportunities for decent work and minimises negative environmental impacts,” said Lobner.
“As a leading global trade bank, HSBC is ideally placed to support our customers and other companies as they seek to do business with each other in a more responsible and sustainable way.”
Globally, HSBC is already working with its customers and clients to help deliver the extra $2.4 trillion of investment that will be required annually to achieve the Sustainable Development Goals.
“HSBC takes its commitment to sustainable growth seriously and has pledged $100 billion of investment in sustainability by 2025,” said Lobner.
“Given our global presence and strong relationships we have with our large customer base, we can help companies transition to a low carbon future and find efficiencies in their supply chain through bespoke sustainability solutions.”
