BANGLADESH INSTITUTE OF INTERNATIONAL AND STRATEGIC STUDIES

JAPAN-BANGLADESH ECONOMIC RELATIONS: CHALLENGES AND OPTIONS

Author: Ishtiaque Selim, Mohammad Jasim Uddin

DOI Link: https://www.doi.org/10.56888/BIISSj2007v28n4a2

ABSTRACT

The core of Japan-Bangladesh economic relations is built on Overseas Development Assistance(ODA)and trade,and,to some extent,on Foreign Direct Investment(FDI). Japan, since 1992, has become the largest ODA provider to Bangladesh. TheODAis still the most significant part of Japan-Bangladesh economic relations.Even during the 1970s,the total volume of trade between the two countries has been remarkable.However,there has not been any significant rise in the volume oftradein real terms.A similar trend could be observed inJapanese investment in Bangladesh. While Japanese investmentin Bangladesh is already considerable, no FDI from Japan has been recorded since 2001. Some adverse factors are also likely to gradually reduce Japanese economic assistance to Bangladesh. The challengesfacingJapan-Bangladesh economic relations are inefficient utilisation of Japanese assistance, lack of competent organisational framework and weak project implementation process on the part of Bangladesh government.These are compounded by global economic recession, lessening of Japanese interest in South Asia, curtailment in Japanese ODA disbursementand otherfactors. While Japan's aid has been of high quantity, Bangladesh’s capacity of aid utilisation needs substantial improvement. Besides, increasing exports to Japan and creating FDI friendly environment are important tasks. It is in this context thatthe present paper attempts to analyse the current Japan-Bangladesh economic relations.