Dhaka lures Swedish investors 

The bilateral relationship between Sweden and Bangladesh has grown significantly over the past five decades, evolving from humanitarian aid to a strong economic and trade partnership. 

Sweden was one of the first European nations to recognize Bangladesh's independence in 1972 and has since played a crucial role in the country's development. The partnership now spans various sectors, including trade, investment, sustainable development, and climate action. As Bangladesh continues its journey toward becoming a developed nation, strengthening economic and investment ties with Sweden is essential for long-term growth and stability. Following this, Chief Adviser Muhammad Yunus invited more Swedish investment, saying the interim government is carrying out vital reforms to ensure ease in doing business in the country.

Bilateral Relations between Sweden-Bangladesh: Sweden and Bangladesh's partnership, spanning over 50 years, consists of long-term development cooperation and extensive trade. The ties are vibrant and multifaceted, covering development cooperation, trade and investments, good governance, labor rights, disaster risk reduction, environmental protection, education, cultural cooperation, and humanitarian assistance.Initially, relations between Sweden and Bangladesh focused on humanitarian support, which later shifted into development cooperation, having long-term impacts in many areas. Development cooperation has been a cornerstone of bilateral relations, but as both countries have evolved, so has the relationship.

With more than 50 Swedish companies already present in Bangladesh, there is potential for stronger commercial relations. Telecommunications equipment and machinery are among the most significant export products to Bangladesh, alongside other engineering goods such as paper, wood, ore, iron, steel, and chemicals. Conversely, Bangladesh exports clothing and textiles to Sweden, with most Swedish fashion brands sourcing products from Bangladesh due to its competitive market.

At present, Sweden looks forward to enhancing trade with Bangladesh as the country is becoming an attractive market and investment destination, alongside the Bay of Bengal emerging as a significant part of the Indo-Pacific region.Sweden is also actively engaged in providing aid to Rohingya refugeesand promised to continue Swedish assistance.Swedish International Development Cooperation Agency(SIDA) has provided close to one billion SEK in 2024 from various strategies being implemented in Bangladesh. It provided 127.7 million SEK as humanitarian assistance in 2024, mostly for the displaced Myanmar nationals in Bangladesh and the host community in Cox's Bazar.

Investment and Sustainable Development: A market of 170 million consumers, a growing middle class, greater purchasing power, local demand, low labor costs, and rapid economic expansion make Bangladesh an attractive investment destination for Sweden. Meanwhile, due to concerns about overdependence, supply chain instability, and the global financial crisis, Bangladesh may offer itself an intriguing alternative for Swedish investors. The increasing presence of Swedish companies in Bangladesh reflects the growing importance of this economic partnership.

However, on February 23, 2025, Chief Adviser Professor Muhammad Yunus urged Sweden to invest in social businesses in Bangladesh rather than providing grants as development assistance. During a meeting with Jakob Granit, Director General of the Swedish International Development Cooperation Agency (SIDA), Yunus emphasized that grant money is charity, whereas social business investments can foster sustainable development. He highlighted healthcare as a potential area for such investments.

Additionally, Yunus sought Sweden's assistance in addressing Bangladesh's energy crisis by facilitating the import of hydroelectricity from Nepal, which possesses significant untapped resources. He suggested that SIDA could collaborate with both Bangladesh and Nepal to make this initiative a reality. Jakob Granit expressed interest in making Swedish assistance more effective amid the changing geopolitical landscape and during this critical period for Bangladesh. He also inquired about the government's reform initiatives, to which Yunus responded that the Interim Government is focused on laying the foundation for sustainable development, despite its limited tenure.

The Future of Swedish-Bangladeshi Relations: The current strategy for development cooperation covers the years 2021-2025, focusing on four areas: inclusive economic development, democracy, human rights, rule of law and gender equality, health, and climate and environment. Beyond trade and investment, a Swedish-Bangladeshi partnership on climate change issues could be highly impactful. As a low-lying coastal country, Bangladesh is particularly vulnerable to rising sea levels, extreme weather events, and other manifestations of climate change. Sweden, with its expertise in sustainable development and renewable energy, can collaborate with Bangladesh to mitigate the adverse effects of climate change and build resilience in vulnerable communities.

Notably, Bangladesh is set to graduate to developing country status in 2026, following a UN recommendation allowing the country five years instead of three to prepare for this transition due to the economic impact of COVID-19. To overcome the challenges associated with this transition and achieve its goal of becoming a developed nation, Bangladesh needs trusted international allies like Sweden. Strengthening bilateral ties, particularly in trade and investment, will be crucial in the coming years. The Swedish business sector, including its companies, plays an essential role in promoting the green and digital transition, job creation, and sustainable economic growth in Bangladesh.

Sweden can also play a crucial role in influencing the European Union to continue granting Generalized System of Preferences (GSP) facilities to Bangladesh. Both countries should explore areas of enhanced partnership, including synergies between development and trade, sustainability initiatives, and investment collaborations. Strengthening Swedish-Bangladeshi ties will be instrumental in driving sustainable economic growth and ensuring long-term prosperity for both nations. It is hoped that Sweden's enthusiastic approach toward Bangladesh continue in the upcoming days and the relationships between the countries reach a unique height during the tenure of the interim government. -Source: observer