Trade, investment, tourism, climate change and migration are expected to top the Bangladesh-Spain bilateral talks during Prime Minister Sheikh Hasina’s visit to Spain during this month. 

Prime Minister of Bangladesh Sheikh Hasina is expected to visit Spain at the invitation of her counterpart Pedro Sánchez during July 21-23, 2024 to deepen relations with the EU country in multilateral sectors, sources in Dhaka and Madrid said.

During the state-level talks with Spanish Prime Minster Pedro Sánchez, Prime Minister Sheikh Hasina is likely to call upon the European Union (EU) country to extend its business facilities (GSP+) until at least up to 2029 to Bangladesh that, in turn, help the country towards smooth journey after LDC graduation.

As Bangladesh is coming out of the least developed country status (LFC) by 2026, the country may lose special trade privilege (GSP+) in EU countries after the deadline.

Bangladesh exported goods to Spain worth 352.23 million US dollars (3523080442 US dollars) during the July-May period of the 2023-24 fiscal year. The current statistics show that export to Spain is likely to post some 5.00 per cent.

Bangladesh exported goods to Spain worth 368.34 million US dollars  (3683432814 US dollars) during 2022-23 fiscal year

Meanwhile, the Asian Development Bank (ADB) in its report said  “The heavy reliance on the apparel industry – which contributed to over 85 per cent of total merchandise exports – exposes Bangladesh to a reduction in exports following its graduation from the group of least developed countries (LDCs)…

During state level talks, Dhaka may request Madrid to recruit increasing Bangladeshis in prospective sectors as the EU country needs manpower with its population growth dropped over the years.

According to available sources, over 60,000 Bangladeshis are living nowadays in Spain, which means that Spain has the second largest community of Bangladeshis living in the European Union after Italy.

Spain is the 18th largest source of remittance in case of Bangladesh during the July-March 2023-24 fiscal year. Expat Bangladeshi living in Spain sent home 88.05 million US dollars during July-March 2023-24 fiscal year.

Immediate past Spain Ambassador to Bangladesh Francisco de Asís Benítez Salas  in an interview with this correspondent has praised the role of Bangladeshi Diaspora in Spain who are contributing significantly to the economy of the EU country

"Moreover, the social integration of Bangladeshis in Spain has been remarkable in the last decades and the number of second-generation Bangladeshis is already increasing by the day," said the past Spanish envoy.

He said Bangladeshis live all over Spain, mainly in the major cities and in the Mediterranean coast but there is a recent trend of them settling in the islands, both the Canary Islands and the Balearic Islands.

Francisco de Asís Benítez Salas went on to say Bangladeshi people work in services and run small businesses contributing through their hard work to the cultural richness and GDP growth of Spain.

“Today, around 65,000 Bangladeshi nationals live in Spain. Many of them are long term residents in our country, with their families, and have their own businesses. Others are employed in different sectors. Their children attend Spanish schools and the families have adapted well to our way of life. The Bangladeshi community in Spain is very entrepreneurial and hard working. Through their economic activities, they represent a very positive contribution to the Spanish economy and an additional element of diversity in the communities they live in,” he said.

Sources in Dhaka and Madrid said both Bangladesh and Spain may also discuss the issue of illegal and unauthorized migration to the EU countries.

According to Reuters, around 57,000 migrants entered Spain irregularly last year, almost double the 2022 number as arrivals on the Canary Islands in fragile boats from west Africa surged to record levels, official data showed in January, 2024.

The Spanish government last year intensified its contacts with authorities in countries such as Senegal and Mauritania to try to reverse the trend. Spain also had to create additional emergency accommodation for migrants in military barracks, hotels and hostels across the country.

A total of 56,852 migrants illegally entered Spain by land or sea in 2023, an 82% year-on-year increase and the highest number since 2018, when 64,298 arrivals were registered, Interior Ministry data showed.

In September 2017, Bangladesh signed a standard operating procedure (SOP) with the European Union on the modalities to take back unauthorised and unregistered migrants living in member states of the bloc.

An EU-funded project is now underway on several issues for sustainable reintegration support aiming for 3,000 returnee migrants from Europe.

At least 2,503 returnees have received in-kind assistance through the Prottasha project since 2017 while an NGO worker said that 500 plus Bangladeshis were repatriated under the SOP.

In 2016, the EU urged Bangladesh to repatriation of 80,000 Bangladeshis living illegally in EU member countries.

But by 2022, the United Nations High Commissioner for Refugees data showed that Bangladeshis were among the top three nationalities to cross the Mediterranean Sea or land borders to reach European countries without valid documents in 2021.

As of December 31, 2021, the analysis of UNCHR’s one-year data showed that 7,577 or 10.9 per cent of 1,22,485 undocumented migrants were Bangladeshis.

In November 2022, a delegation led by European Union commissioner for home affairs Ylva Johansson at a meeting with Home Minister Asaduzzaman Khan urged the government to speed up repatriation of undocumented Bangladeshis as per standard operation procedure signed in 2017.

Meanwhile, Prime Minister Sheikh of Bangladesh Hasina on July 4, 2024 in a meeting at her official residence, Ganabhaban, with Spanish Ambassador Gabriel Maria Sistiaga Ochoa de Chinchetru in Dhaka laid emphasis on increasing trade and commerce between Bangladesh and Spain to foster mutual cooperation and benefits.

"We want to increase the business between Bangladesh and Spain," she said.

The Spanish Ambassador noted that currently, Spain primarily imports ready-made garments (RMG) from Bangladesh. He also mentioned Spanish investment in Bangladesh's cement sector.

The prime minister urged the ambassador to take initiatives to increase Spanish investment in Bangladesh. She highlighted her government's efforts to establish approximately 100 economic zones across the country.

"Spanish investors can also make investments in these zones; we want to see more investments from Spain," she said.

She also requested the ambassador to persuade Spain to assist Bangladesh after it graduates from LDC status, in addition to support from the European Union.

The meeting revealed that negotiations for a partnership agreement between the two countries would begin in September.

The Prime Minister requested that Spain accommodate more Bangladeshis, particularly from the IT sector.

The Spanish Ambassador highly praised Bangladesh's budget, noting the government's focus on education and social safety nets.

"This is very important for us; your increased interest and allocation in social safety net matched with our country also," he said.

The prime minister expressed her gratitude to her Spanish counterpart for inviting her on an upcoming bilateral visit.

Meanwhile,  former Spain's Ambassador to Bangladesh Francisco de Asís Benítez Salas in an interview with this correspondent said that Spanish nationals are increasingly expressing keen interest in exploring business opportunities in Bangladesh, "Although the Spanish community in Bangladesh is not very large, we are indeed experiencing recently a growing interest of Spanish nationals in moving to Bangladesh to explore business opportunities," the ambassador.

But to attract Spanish investments, Bangladesh has to provide a more attractive framework for foreign companies in terms of transparency, customs barriers and tariffs.

"The key obstacles that need to be addressed to make the country more attractive to Spanish investors are mainly related to increasing the transparency level as well as improving the investors' business climate in the field of legal certainty," said Francisco.

Foreign direct investment (FDI) in Bangladesh reached nearly $3.5 billion in FY22, but Spain did not rank among the top 20 contributors. The ambassador believes that Bangladesh has significant potential to attract more FDI, which presently accounts for less than 1% of its GDP.

He, however, said the Bangladesh Investment Development Authority (BIDA) is working hard to help boost investment and increase the ease-of-doing-business. If Bangladesh could climb up the ladder in international rankings like the Ease of Doing Business Index, it would send a clear message to potential foreign investors. In this sense, he said it is important to show the world that Bangladesh is committed to attract more investment from abroad.

Bangladesh is heavily dependent on readymade garments and the country needs to diversify its export basket, especially to face the challenges after the LDC graduation. "FDI could play a big role in fostering diversification, knowledge spillovers and innovation," he noted.

Besides, Bangladesh could find interesting opportunities in cutting-edge sectors, including environmental technologies and green energy.

He also believes Bangladesh has the ability and human capital to diversify its export portfolio. For instance, there are opportunities for Bangladesh to excel and become a global player in agro-food products, the fishing industry, ICT products and the pharmaceutical industry, he said.

"It is key to develop a more coordinated approach between industrial, trade and FDI policies that can act together as a catalyst for development," added the top Spanish envoy in Dhaka.

Francisco also spoke about the Bangladesh-Spain bilateral trade and investment relations, the role of an increasing Bangladeshi diaspora in Spain, LDC graduation and passing a resolution in the European parliament calling for free and fair elections, among others.

Spain was the second-largest export market for Bangladesh's RMG products after Germany in Europe. Bangladesh's RMG exports to Spain were $3.57 billion in FY23 with a growth rate of 18.53%.

Bearing in mind that the fiscal year in Spain runs from 1 January to 31 December, as in the calendar year, Spanish exports to Bangladesh amounted to $216 million in FY22, with a growth rate of 3.5% from the previous period, he said.

"The bilateral trade between Bangladesh and Spain has been growing significantly over the years, yet there is a very marked imbalance mainly due to tariff and non-tariff barriers, as you can tell by the export numbers."

Francisco further said, "While we should continue to encourage Bangladesh's exports to Spain, it is also key to promote Spanish exports to Bangladesh. Our country is very interested in strengthening our relationship as trading partners, and the Economic and Commercial Office of the Embassy of Spain in Bangladesh offers its support to companies willing to export and invest.

A second key aspect to further enhance bilateral trade is diversification, he said. Owing to Bangladesh's heavy reliance on the textile industry, both exports (RMG) and imports (inputs for RMG sector) are concentrated in the same sector. The textile industry has played a leading role in the economic development of the country, and others could follow suit. There is still a lot of room for diversification in our economic and trade partnership.

Spain is a very competitive country and our companies and products, very much appreciated globally for their quality, are present in all world markets. For example, he said, Spanish companies are world leaders in many sectors: highly productive agriculture, food processing, fisheries and fishing industry, healthcare, infrastructures, and railways, to name a few. "In all these fields, our relations could be further extended," he added.

On the challenges and opportunities after Bangladesh's LDC graduation in 2026, Francisco said it can act as an important incentive to modernise the country's policy-making so that, under a potential transition to a GSP+ scheme, the EU would still grant preferential access.

The envoy said potential trade agreement falls under the European Union common commercial policy and is something which must be agreed upon by all EU member states. Nevertheless, he said Spain stands firmly with Bangladesh and will do its best to assure the best possible trade deal for Bangladesh is achieved. "We will also work in this direction at the European Union level and with other Member States," he noted.

"Just last year, we had in Dhaka a joint event in collaboration with the Tourism Office of Spain in Mumbai where four of the leading Spanish companies in the travel sector participated. The event was attended by approximately 48 travel agents from Bangladesh, and the networking sessions indeed turned out to be very productive," he said.

On the immense popularity of Spanish football in Bangladesh, Francisco said he is very proud to see, almost on a daily basis, how much the Bangladeshi people, especially the youth, love Spanish sports in general and Spanish football in particular. "I personally was very excited to see so many Spanish flags all over Bangladesh during the last World Cup."