In an exclusive interview with Dhaka Tribune’s Saddam Hossain, Sheikh Fazle Fahim, president of the D-8 Chamber of Commerce and Industry (D-8 CCI), speaks about the potential of trade among the D-8 countries
Having a set of opportunities, D-8 is still far away from achieving its desired success. Why is that?
The member countries of the D-8 are located in different regions of the world, with eight countries from four regions, having differences in economy, language, culture, and way of thinking.
However, 25 years is not a very long time for any multinational organization on an international platform.
The intra-regional trade rose significantly from $13 billion to $129 billion with the vibrant potential for cooperation in agriculture, trade and tourism.
However, in the turbulent current global situation, it is possible to advance this organization through business, IT, agriculture, cybersecurity and others.
From my point of view, the goal with which D-8 was established may not have been reached yet, but in the current post-pandemic and crisis-dire world, we can reassess that potential and move forward.
D-8 Chamber of Commerce and Industries, as a chamber of the national chambers of the D-8 member countries, is relentlessly working to advance the trade among the D-8 members.
Earlier, there might be some differences in the priorities but now, in the current global situation, everyone's priority area is common like food security, energy security, uninterrupted supply-chain, technology security and others. So, there is room for potential.
The D-8 CCI Business Forum and Expo just concluded. How do you think the event went?
The main objective of the recently concluded business forum was to increase engagement and sensitize the private sectors of eight countries. We did the program with the national chambers of the D-8 member countries and other delegates.
During the Business Forum, a number of MoUs were signed in sectors like textile, energy, FMCG etc.
Basically, the purpose of this business forum was to increase engagement and change their perception of Bangladesh.
For example, the Indonesian delegate told me on the sidelines of the event that he thought Bangladesh was not such a safe country for investment but now the idea has completely changed.
Delegates from other countries are also interested in investing in Bangladesh. Nigeria has already signed a joint venture with a local company.
Is there any development regarding ratifying PTA among D-8 countries?
The Preferential Trading Agreement (PTA) among D-8 countries is likely to ratify in October. The ratification will accelerate 479 products of the member countries, 59 from Bangladesh which currently have a 25% tariff.
If the PTA comes into force, the tariff on these products will be reduced significantly.
I think finalizing the mapping will be more viable before ratifying PTA. The members of the D8 have strengths in different sectors, some are rich in oil and gas, whereas another one is in technology, Malaysia in the blue economy but Indonesia in minerals.
That is why we have to move towards PTA by using mapping tools to define what we need from which country or what to export to them.
How will these mapping tools work?
The national chamber and Ministry of Commerce have all the information about mapping tools. The ministry has taken an initiative to the diversification of 14 products by using mapping tools.
As a result of such mapping, we can easily identify which products and services we will focus on. There is no point in talking about our whole basket or taking all the products into account.
For example, we do not import any oil and gas from Nigeria. We have to map out how much is beneficial for us based on tariffs and logistics.
Moreover, our chamber had a pending AGM which could not be held timely due to the pandemic. One of the recommendations of the AGM was to map the strong sectors of each country prior to PTA ratification.
Identifying certain products and services through this mapping to ensure intra-D-8 investment and an uninterrupted supply chain.
How should D-8 countries prepare to deal with the supply chain disruption due to the Ukraine war, inflation and the hike in raw material prices?
The post-pandemic world is facing war, supply chain disruptions, volatility in foreign reserves, inflationary pressures and hikes in raw material prices.
We have discussed the above issues so that a way of value chain integration can be easily found.
Moreover, we will also work on standardization and harmonization of products and services under the D-8 standard which will prevent products from falling under non-tariff barriers even after PTA ratification.
This standardization and harmonization will also help us to tap into the global halal economy, which is approximately $7 trillion in size.
In the meantime, we also talked about alternative trade finance for intra-D8 trade, introducing a barter system, and cross currency swap.
We also wanted to introduce alternative dispute resolution. The Islamic Chamber of Commerce has an arbitration centre in Istanbul. We have requested from the private sector whether the centre can be used as a private sector arbitration chamber for D8.
We also discussed buffer stocks to ensure food and energy security. If a country has a food or energy crisis, through buffer stock, the other countries will provide it.
Bangladesh and Cambodia already have such an agreement on rice.
Such long-term agreements can be made on food and energy, by ensuring a guaranteed price as during the volatile situation, there will not be a big jump in prices.
What should be the main priorities of Bangladesh in trading with D-8 countries?
Bangladesh is moving towards digitization. Three of the D8 countries - Nigeria, Turkey, and Malaysia - are very advanced in IT and cyber security.
Since our capacity is low, our companies can go into joint ventures with companies from these advanced countries.
Moreover, Turkey produces high-value RMGs, and we still mainly produce basic RMGs. Collaboration with them is possible here.
We are not saying to work with all sectors, in our opinion, it is possible to work with selected, mapped sectors.
However, once PTA is signed it will help us to tap into new markets. Egypt is one of the logistics hubs of the world. If we can tap into Egypt and Nigeria, entry into the African continent will be easier.
And if the African market catches up, it will have an impact on the economy of the post-LDC countries as well.
What is your expectation for the D-8 in the next five years?
The next years are very challenging and business will not go as usual. The global economy is going through a dire situation due to inflation, hike in freight costs and many more.
However, I expect D8 to go a long way in the next five years and it was noticeable at this year's D-8 CCI Business Forum.
People are now talking about D8 and there has been a lot of response from both nationally and internationally.
We have a lot of work to do with our planned agenda and there should be an engagement of the central banks with the chambers.
These matters will be placed at the D-8 trade ministerial meeting.
As the chamber, we will advocate and help the government with policy guidance as we need governmental support in policy adaptation.
Government should work to maintain macroeconomic balance and have to go according to its strengths.
We have to assess before establishing bilateral and trilateral trade relations with anyone.
The main focus should be on the private sector. The region is a $5 trillion economy and each country has unique strengths.
So, the private sector engagement should be enhanced accordingly. The event was very important to increase awareness and engagement. About 500 international media outlets covered the event.
Such events should be organized regularly in rotation both physically and virtually.
