Tuesday, May 21, 2024

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বাংলা
Dhaka Tribune

We cannot afford to fight the climate crisis alone

Economic diplomacy is an integral part of financing the Mujib Climate Prosperity Plan

Update : 23 Apr 2024, 09:10 AM

Despite minimal contributions to global carbon emissions, Bangladesh is at the tipping point of the climate crisis due to its geographic location. While we are pursuing high economic growth and improved living standards for a population of over 170 million, we face numerous threats due to climate change related extreme weather events. Temperature rise, erratic rainfall patterns, devastating floods and droughts, intensified tropical cyclones, sea-level rise, heightened salinity levels, riverbank erosion, and ocean acidification are wreaking havoc on the lives and livelihoods of those inhabiting the vulnerable southern coastal regions. 

A staggering 90 million people in Bangladesh live in areas highly exposed to climatic risks. The spectre of displacement looms large for the 20% of the population dwelling along the coast, as rising sea levels threaten inundation of low-lying areas. Scarce freshwater resources worsen the challenges faced by coastal communities, with projections from the Sixth Assessment Report by the Intergovernmental Panel on Climate Change (IPCC) indicating a drastic reduction in the freshwater river area from 40.8% to 17.1% in the southwest coastal zone between 2012 and 2050.

Are we doing enough?

Bangladesh has undertaken a series of initiatives to combat the climate crisis. We are the first country among the Least Developed Countries (LDCs) to set up a self-financed $450 million climate change trust fund back in 2009. We have shown exemplary leadership in international norm-setting for tackling the climate crisis, including through the Hon’ble Prime Minister’s role as the two-time Chair of the Climate Vulnerable Forum (CVF). Under her leadership, CVF has transformed into a true voice of 68 climate-vulnerable countries. During COP26 in Glasgow in November 2021, Bangladesh was identified by BBC as one of the five dealmakers to influence the outcome of the summit. 

Despite these commendable efforts, a notable shortfall persists in funding essential climate adaptation and mitigation projects, owing to constrained financial resources. Presently, Bangladesh spends around $1 billion annually for adaptation efforts which is nearly a fifth of the estimated $5.7bn required per annum until 2050, as estimated by a study of the World Bank. Addressing this finance deficit would require a multifaceted approach, incorporating diverse capital streams, including investments by the private sector and the facilitation of blended finance mechanisms with renowned institutional investors. 

The government has recently formulated the Mujib Climate Prosperity Plan (MCPP) to attract investments in resilient sectors such as energy, water, transportation, and supply chains, with an ambitious target of mobilizing approximately $80bn over the coming decade. Furthermore, Bangladesh has recently adopted the National Adaptation Plan (NAP), which mandates a staggering $230bn by 2050 for our adaptation efforts. 

Considering this finance gap, Bangladesh needs to aggressively pursue climate diplomacy as a form of economic diplomacy to secure climate finance to attract the resources necessary to support the MCPP and other climate change initiatives. 

A staggering 90 million people in Bangladesh live in areas highly exposed to climatic risks

Vying for funding in Canada

Throughout my tenure as High Commissioner of Bangladesh in Canada, I have reached out to potential investors in Canada to support our adaptation and mitigation efforts as part of the High Commission’s priority to economic diplomacy. In this regard, most recently, I held productive meetings with Mark Carney, Chair of Brookfield Asset Management and UN Special Envoy for Climate Action, and Ambassador Marc-André Blanchard, Executive Vice-President and Head of CDPQ (Canadian Pension Fund) Global and Global Head of Sustainability. 

It should be noted that Brookfield is managing the Catalytic Transition Fund (CTF), launched during COP28 in UAE and funded by ALTÉRRA (UAE), CDPQ (Canada), and Temasek (Singapore). This multi-billion-dollar CTF will have a differentiated and focused mandate, raising and deploying capital exclusively for emerging and developing markets, with a dedicated focus on supporting the four key pillars that underpin COP28’s Action Agenda, ie, energy transition, industrial decarbonization, sustainable living, and climate technologies. Both Brookfield and CDPQ are key members of the CTF consortium. 

During these meetings, I briefed them about investment opportunities in Bangladesh, particularly in our adaptation and mitigation efforts, including support for the implementation of the MCPP. These meetings have opened avenues for potential financing in climate change adaptation and mitigation efforts in Bangladesh. They informed me that CTF would be willing to invest in Bangladesh if the government is willing to pursue a blended finance approach in our adaptation programs. 

From the High Commission, we are now facilitating coordination between Brookfield, CDPQ and relevant Ministries/Departments in Bangladesh, including the Ministry of Environment, Forest, and Climate Change. A meeting of the Hon'ble Minister, Ministry of Environment, Forest and Climate Change with Mark Carney and Ambassador Marc-André Blanchard will be held soon to discuss further in this regard. 

Bangladesh has already qualified in three successive evaluations to graduate from the UN LDC category in 2026. To avoid the development trap after graduation, it would need to make strategic use of economic tools to sustain its growth trajectory as well as to attract much needed investment in critical sectors, including climate change adaptation and mitigation. Hon’ble Prime Minister Sheikh Hasina has given special direction to prioritize economic diplomacy and has set forth five specific objectives, including attracting foreign investment and diversifying our investment portfolio, expanding and diversifying our export basket, providing quality services to our diaspora and involving them in our nation-building efforts, facilitating the transfer of critical technologies, and ensuring gainful employment for our professionals and workers abroad. 

Nonetheless, a lack of a cohesive strategy within our government is one of several factors responsible for the limited success of economic diplomacy. In January every year, a customary letter from the Ministry of Foreign Affairs is sent to Heads of Bangladesh Missions abroad instructing them to promote economic diplomacy. However, regrettably, the government has not yet been able to deploy the necessary wherewithal or develop a comprehensive strategy to fulfill our economic diplomacy objectives, nor is there any evident inter-ministerial mechanism in place to pursue economic diplomacy. 

VECTEEZY

The need for economic diplomacy

To attract investments from some countries, including Canada, specific bilateral arrangements are required for building the confidence of their investors. Conclusion of a Foreign Investment Protection Agreement (FIPA) is essential to attract Canadian investment. Although discussions regarding a FIPA began in 2012, the conclusion of such an agreement was hindered due to the lack of effort from relevant ministries in Bangladesh to develop a draft FIPA for negotiation with the Canadian side. After relentless advocacy by the High Commission, the government has finally proposed to the Canadian side to initiate technical negotiations for a FIPA in March 2024. I hope that the government will now actively pursue the conclusion of a FIPA with Canada as soon as possible. 

To attract investments from some countries, including Canada, specific bilateral arrangements are required for building the confidence of their investors

As expected by Canada's Indo-Pacific Trade Representative, this decision would work as a booster for Canada’s investors in light of the upcoming visit of a trade and investment mission to Bangladesh next month led by him. Similar instruments with other countries as required should also be concluded to bolster foreign investors' confidence in investing in Bangladesh. Moreover, the role of the Ministry of Commerce and several investment promotion agencies, including BIDA and BSEC, in promoting trade and investment need to be redefined. Often, these government ministries/agencies unilaterally organize various events abroad, including trade fairs, without adequate consultations with the other concerned Ministries/authorities and sometimes even concerned Missions. Instead of spending resources on organizing one-size-fits-all traditional roadshows/trade fairs without any achievable targets, we should develop country-specific strategies in consultation with the relevant Missions and private sectors. 

The role of commercial counsellors posted in Bangladesh Missions abroad from the Ministry of Commerce should also be redefined. This position needs to be budgeted within the Ministry of Foreign Affairs and a simultaneous reporting mechanism to all relevant ministries may be created for better coordination and ensuring coherence, accountability and performance appraisal. This is unfortunate that this position has been vacant for the last one year in the Ottawa Mission. However, I did not allow the economic diplomacy initiatives to suffer because of the absence of the commercial officer by assigning this work to other officers in the Mission to pursue economic diplomacy. I am proud to say that currently, the export from Bangladesh to Canada is the highest in its history.

Streamlining through organization

Finally, I have to say that there is a considerable lack of coordination among concerned government ministries/departments to promote and guide the effective implementation of economic diplomacy initiatives. Different ministries/departments often undertake disparate initiatives without any synergy. The Ministry of Foreign Affairs, Ministry of Commerce, BIDA, and other relevant ministries/organizations should work together through a permanent inter-ministerial mechanism to coordinate their efforts. In this regard, the International Trade, Investment, and Technology Wing of the Ministry of Foreign Affairs needs to be strengthened in terms of resource and manpower. The government should consider a comprehensive strategy for economic diplomacy, wherein the Foreign Office, various line ministries, and our missions abroad work in a synergistic manner. 

It is time for adequate reflection and effective measures to implement the Hon'ble Prime Minister’s vision and guidance for promoting economic diplomacy. Given my imminent departure after completing my full tenure as High Commissioner of Bangladesh in Canada, I am writing this public piece to highlight the challenges I faced in promoting economic diplomacy. It will be incumbent upon my successor to advance the economic diplomacy initiatives of the High Commission to strengthen and expand business relations with Canada and other accredited countries. I hope that the government will facilitate their job by providing necessary support, including making required resources available, to promote and advance economic diplomacy. 

 

Dr Khalilur Rahman, PhD, is the Bangladesh High Commissioner in Canada. He can be reached at [email protected]

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