Roundtable Discussion on Strategic Autonomy of Bangladesh

The Bangladesh Institute of International and Strategic Studies (BIISS) organised a roundtable discussion titled “Strategic Autonomy of Bangladesh: Alternative Trading Arrangements” on Thursday, 26 October 2023, at the BIISS Auditorium.

The programme commenced with a welcome address by Major General Sheikh Pasha Habib Uddin, OSP, SGP, BAMS, afwc, psc, Director General of BIISS. The session was chaired by Ambassador A. F. M. Gousal Azam Sarker, Chairman of BIISS, who also delivered the closing remarks.

In his welcome address, the Director General highlighted the growing uncertainties in the global economy arising from the post-pandemic recovery, persistent inflationary pressures, the Russia–Ukraine war, currency depreciation, and the global dollar shortage. He emphasised that these developments have constrained the foreign exchange reserves and economic policy space of many developing countries, making it imperative for Bangladesh to explore prudent and sustainable alternative trading arrangements while safeguarding its macroeconomic stability.

The roundtable featured three keynote presentations. Dr. Benuka Ferdousi, Senior Research Fellow, BIISS, presented “Alternative Trading Arrangements: Options, Opportunities and Challenges for Bangladesh,” analysing the prospects and limitations of conducting international trade in alternative currencies. She identified major challenges, including Bangladesh’s trade imbalance with key partners, limited market incentives, and geopolitical risks. She recommended that Bangladesh adopt a cautious and incremental approach, limiting alternative currency transactions to export earnings while closely observing international experiences before undertaking broader reforms.

Dr. Mahfuz Kabir, Research Director, BIISS, delivered a presentation titled “Supremacy of the US Dollar and the Future of Other Currencies: Trading Options for Bangladesh.” He discussed the structural factors behind the global dollar shortage and assessed the potential role of other major currencies, such as the Japanese Yen, Euro, and Chinese Yuan, in facilitating international trade. He underscored the importance of diversifying payment mechanisms and strengthening bilateral financial cooperation through agreements between central banks.

Professor Dr. Mustafizur Rahman, Distinguished Fellow, Centre for Policy Dialogue (CPD), highlighted the need for Bangladesh to diversify its trade, export markets, and currency arrangements while acknowledging that the US dollar is likely to remain the dominant global reserve currency for the foreseeable future. He advocated a gradual and carefully calibrated approach to adopting alternative trading mechanisms in order to minimise financial risks and maintain economic stability.