Golden Jubilee of Bangladesh-Italy relations: Current trends and future prospects

Immediately after the independence of Bangladesh, Italy recognized the country on February 12, 1972 and started its official diplomatic relations in 1973.

In 1974, Italy was one of the countries that sponsored the admission of Bangladesh in the United Nations (UN). From that time, a number of official visits have been exchanged between the countries to strengthen the bilateral relations. The current Prime Minister of Bangladesh Sheikh Hasina paid a number of visits to attend various international events and conferences held in Italy. However, after the visit of the Prime Minister of Bangladesh in Rome to attend the summit of the Asia-Europe Intercontinental Forum (ASEM) in October 2014, the bilateral relations have entered to a new era of strategic and economic partnership. Against such backdrops, it is important to assess the current trends and unearth the untapped areas to explore new avenues of Bangladesh-Italy relations.

Strong Defense Cooperation

Bangladesh was heavily reliant on China for defense purchase for quite a long time. But now, they are pursuing a balanced approach in achieving its military modernization followed by the Forces Goal 2030. EU members especially Germany, France, Italy and Spain have been increasingly showing their interest in supplying high-tech weapons. France with its Dassault Rafale is in a competition with Eurofighter Typhoons jointly manufactured by the UK, Germany, Italy and Spain.

Bangladesh and Italy have been enjoying smooth defense relations in the recent past. The Italian defense giants Leonardo and Fincantieri group have shown their interest in joint ventures with Bangladesh’s air and naval industries. Leonardo got the contract to supply communications equipment, technical support and comprehensive training program for Bangladesh air force along with supplying the Kronos LAND radars.  The Kronos LAND C-band AESA radar is multi-functional radar with an air surveillance range of 250 km. At the same time, the Fincantieri group wants to upgrade the Chattogram Dry Dockyard and help Bangladesh Navy to construct state of the art warships such as frigates and corvettes based on Italian technology. Italy and Bangladesh can usher a new level of strategic cooperation through high tech defense cooperation, training and surveillance.

Economic Ties

Bangladesh from the “bottomless basket” is now one of the economic giants of South Asia. According to National Human Development Report, the country will be the 24th largest economy by 2030. The graduation of Bangladesh to a middle-income country has both opportunities and challenges. Bangladesh enjoys duty-free market access to 52 countries including the EU; Italy is a part of them.  Italy supported Bangladesh in providing the GSP facilities from the European Union. EU has been allowing Bangladeshi exports under the "everything but arms" tariff arrangements. During the last official visit of the Prime Minister of Bangladesh in February 2020, Bangladesh sought Italy’s support in continuing the preferential access of its products to the EU market even after the country’s graduation from the Least Developed Countries (LDCs) status.

Italy-Bangladesh Chamber of Commerce and Industry (IBCCI) is the formal platform to boost bilateral economic ties. From 1995 to 2019, in 24 years, the exports of Bangladesh to Italy have increased at an annual rate of 7.86%, from $268 million to $1.65 billion. In 2019, Bangladesh exported $1.65 billion to Italy, mostly Knitwears. Agricultural items like frozen food, tea, raw jute, and jute goods have a great promise to diversify the exporting products. On the other hand, Italy exported $610 million to Bangladesh in 2019. The main products that Italy exported to Bangladesh were mercenaries, electronic products, and vehicles. The exports of Italy to Bangladesh have increased at a rate of 7.74% from $102 million in 1995 to $610 million in 2019.

Italy has shown its interest in investing in the leather industry of Bangladesh. On November 14, 2021, the Italian ambassador to Bangladesh Enrico Nunziata expressed interest during a meeting with the Bangladesh Small and Cottage Industries Corporation (BSIC) in Dhaka. Bangladesh has been developing 100 economic zones in different parts of the country by offering a wide range of incentives for foreign investors including 100 percent equity share. With relatively political stability in the last decade, cheap labor facilities, and a huge middle-class domestic market, Bangladesh can be a lucrative destination for Italian companies.  However, the tariff and non-tariff barriers, corruption, and bureaucratic complexities need to be addressed to properly exploit the opportunities.

People-to-people Contact

Another area of cooperation is the diaspora community of Bangladesh in Italy. Italy is the second-largest destination for Bangladeshi migrants after the United Kingdom. As of 2020, there were more than 150,000 Bangladeshis living in Italy. The economy of Bangladesh is largely depending on two sectors—RMG and remittances. During the Covid-19 pandemic period, Bangladesh managed to maintain its economic growth with the constant remittance inflows from the diaspora. In fiscal 2020-21, Bangladesh received the highest $810.90 million remittances from Italy. But concern still exists over the rights of the migrants. To avoid the visa complexities and miseries of the immigrants, the One Stop Service (OSS) need to be facilitated. Along with the labor migrants, Bangladesh has to focus on developing skilled migrants to Italy.

More Areas to look at

Bangladesh and Italy should increase their cooperation on scientific and technological cooperation. The know-how and technology transfer will further strengthen the bilateral partnership. Bangladesh assuming the chairmanship of the Indian Ocean Rim Association (IORA) for 2022-23 and Italy’s outreach activities to the IORA, the blue economy could be a potential sector of mutual interest.  Besides, both the countries should continue their cooperation both bilaterally and multilaterally in supporting the forcibly displaced Rohingyas and finding a durable solution to the crisis. The relations between Bangladesh and Italy are at the tip of the ice berg and still there are lot of possibilities to strengthen the traditional partnership in the strategic and economic sectors. The continual bilateral relations between Bangladesh and Italy will be helpful in maintaining economic growth and sustainable development in the days ahead.

From Shaikh Abdur Rahman, currently working as a Research Assistant at the Central Foundation for International and Strategic Studies, CFISS, based in Dhaka. He writes on South Asia’s politics, human security issues and economic diplomacy, with a particular focus on Bangladesh’s foreign policy. He finished his masters in International Relations from the University of Rajshahi, Bangladesh.

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