South Korea has decided to significantly increase the size of Korea’s soft loan, what Seoul calls EDCF, to Bangladesh to $3 billion from $700 million.
“This amount will be implemented during the next five years, between 2022 and 2026,” South Korean Ambassador to Bangladesh Lee Jang-keun said on Wednesday while speaking at the “DCAB Talk” of the Diplomatic Correspondents Association, Bangladesh (DCAB) in Dhaka.
He said previously, the size of this soft loan agreed between the two governments was 700 million dollars during the five year period of 2021 and 2025. So far Korea has provided 1.34 billion dollars of EDCF concessional loans to Bangladesh for 27 projects.
“With this increase Korea can now assist bigger development projects of Bangladesh. I believe that this will help Bangladesh for the smooth graduation of LDC in 2026.”
Soft loan from South Korea is known as the Economic Development Co-operation Fund or EDCF and the interest rate is between 0.01 percent and 0.04 percent.
The ambassador discussed bilateral relations and said he had witnessed “noticeable progress” in Korea-Bangladesh ties in many areas of cooperation in the last two years of his posting in Dhaka.
“The first major progress I would like to highlight is bilateral trade. The trade volume between Korea and Bangladesh reached a record high in 2021 crossing 2 billion US dollars,” he said.
According to the Korean statistics, Korea’s export to Bangladesh recorded $1.63 billion dollars in 2021, 58% increase from 2020, while Bangladesh’s export to Korea reached $552 million dollars, 40% year-to-year increase.
“It is a very meaningful development because the bilateral trade volume has been stagnant for more than 10 years since it reached the peak of 1.8 billion dollars in 2011. This increasing trend of bilateral trade is continuing this year as well. For the first seven months of this year, Korea’s export to Bangladesh recorded 46% year-to-year increase of 1.4 billion dollars, while Bangladesh’s export to Korea saw 35% increase with 392 million dollars,” he said.
“It is encouraging that our bilateral trade is expanding in spite of the global economic crisis. We have to make efforts to maintain this upward trend of bilateral trade.”
Another area he was witnessing “meaningful progress” this year was the dispatch of Bangladesh EPS workers to Korea.
“Before the pandemic, annually less than 2,000 Bangladesh expatriate workers were sent to Korea. After the suspension of admitting new expatriate workers for almost two years, we resumed it in December last year. And this year, between January and August, more than 3,000 Bangladesh expatriate workers went to Korea which is a record high number. By the end of this year we expect the number will reach almost 4,000,” he said.
There are more than 10,000 Bangladesh expatriate workers working in Korea now. This year’s quota will increase to 3,441 from 1,941. The remittance they send back home was more than $209 million in the 2020/21 fiscal year which made Korea the 12th major remittance sending country.
“Next area of big recent development I would like to highlight is the significant increase of Korea’s ODA and financial support to Bangladesh,” he said.
“Even though Korea’s ODA to Bangladesh is relatively smaller than those of Japan, US and Europe, Bangladesh is the third major recipient of Korea’s ODA. We expect that Bangladesh will be the second largest recipient this year,” he said.
In the area of the Foreign Direct Invest, the ambassador said, there has been continuous inflow of Korean investment to Bangladesh. Korea remains one of the major foreign investors in Bangladesh.
According to the BB, the accumulated stock of Korean FDI increased to 1.4 billion dollars in 2021/22 from 1.1 billion dollars in 2019/20.
“Korea is the fifth major foreign investor. In case of the gross FDI flow in the first quarter of this year, Korea is the first with $150 million. This all shows how the relations between our two countries are growing. I am sure that the media and journalists have contributed to the strengthening of our bilateral ties,” he said.
“My mandate is to strengthen and deepen the bilateral relationship between Korea and Bangladesh. In this regard, in the beginning of my mandate in Bangladesh, I presented three major objectives of my work during my term here which are diversification, elevation, and generation - diversification - diversify RMG centered cooperation; elevation - take the relations into a new height - 50 years of diplomatic anniversary; generation - focus on young generation - talented, ambitious youth.”
“As you know well, Korea and Bangladesh will celebrate 50 years of diplomatic ties next year. I am making various plans and efforts to make next year a meaningful year for the future of our relationship. Making a documentary about our 50 years of friendship was one of my preparations,” he said, seeking cooperation and assistance of media to this end.
DCAB President Rezaul Karim Lotus and its General Secretary AKM Moinuddin also spoke at the event.