Russia’s participation could contribute to the growth of Bangladesh’s economy

BTJ Desk Report
Russia's participation could contribute to the growth of Bangladesh's economy

In 2023, Russia exported 2.7 million tons of wheat to Bangladesh. Maritime Gate has announced plans for additional wheat imports from the country. According to various sources, Russia considers Bangladesh as a top destination for wheat exports among countries outside the Eurasian Union. Additionally, Russia claims that fertilizer imports from Bangladesh are also increasing. Bangladesh had attempted unpaid crude oil imports from Russia.

However, due to the lack of capacity in Bangladesh’s refineries for processing Russian crude oil, direct imports are currently not feasible. Russian observers claim that Bangladesh is now importing this crude oil for processing from India or other Western Asian countries. Furthermore, Russian company Gazprom has been involved in gas exploration activities in the country for a long time. The construction of the Rooppur Nuclear Power Plant is nearing completion. If everything goes as planned, the first unit of the power plant could be connected to the national grid within the next year. About 85% of the work on the construction project has already been completed. After the start of the war with Ukraine, Russia was excluded from the international payment system SWIFT.

Various economic sanctions have been imposed on Russia by Western countries, affecting bilateral trade with the West. To address payment issues, Russia has found a solution in the form of the Cross-Border Interbank Payment System (CIPS) with China. In Bangladesh, the real-time gross settlement (RTGS) system for foreign currency payments has been integrated with the Chinese Yuan.

According to Russian observers and Bangladeshi analysts, this integration has facilitated trade between Russia and other countries in the region, particularly with China. The ORF Foundation and other think tanks have shown interest in strengthening economic relations between Russia and Bangladesh. Russia’s appointed ambassador to Bangladesh, Mr. Alexander Mantytsky, stated that after India, Bangladesh has become Russia’s second-largest trading partner in South Asia. Even during the pandemic, bilateral trade reached an all-time high of $29.7 billion in 2021. However, in 2022, Western countries imposed unilateral sanctions on Russia, affecting its trade relations. Bangladesh, along with other foreign partners, has suffered losses in production and logistics chains, leading to a decrease of $6.4 billion in trade. There are many reasons to expect a return to the 2021 level of trade, such as increased wheat and fertilizer exports from Russia to Bangladesh.

Russia has expressed long-standing interest in participating in Bangladesh’s electricity and energy sectors. In May 2022, Russia proposed selling oil for refining in Bangladesh. The Bangladesh Petroleum Corporation (BPC) was tasked with handling the matter, with directives coming from the highest levels of the government. Subsequently, samples of unpaid Russian crude oil were tested at the Eastern Refinery Limited (ERL) in Bangladesh. However, according to a report by the technical committee of ERL, it is currently not possible to process unpaid Russian crude oil in Bangladesh’s refineries.

Russia is providing a loan of $11.38 billion to Bangladesh for the construction of the Rooppur Nuclear Power Plant. The majority of the project’s work has already been completed, with 85% of it realized so far.


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