Vietnam and Bangladesh are both economic powerhouses that are experiencing significant GDP growth thanks to an export-led growth model. Bangladesh has been one of the fastest growing economies in Asia for many years, with an average growth rate of 7% over the past decade.
Bangladesh's per capita income reached nearly USD2,000 last year, more than tripling since 2006. Similarly, Vietnam has seen an average growth of nearly 7%. Its income per capita reached USD7,900 in 2019.
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Both countries have identified 11 priority areas including agricultural trade and pharmaceutical exports from Bangladesh to Vietnam. Trade between Vietnam and Bangladesh has grown since the first joint trade commission meeting in 2015. Both Vietnam and Bangladesh have young and large populations, which means a significant source of labour that businesses can use. Both countries also benefit from geographical advantages.
So far, Vietnam has made a number of investments in Bangladesh, including investment in Bangladesh's special economic zones, cooperation in the information, communications and technology sector, textile and garment, software services trade, direct airline links, banking and tourism. Vietnam's main exports to Bangladesh include clinker, cement, billet and mobile phones. In contrast, Vietnam mainly imports textile materials, leather, shoes, medicine and sesame from Bangladesh.
Regarding investment, as of April 2019, Bangladesh's total investment capital into Vietnam reached USD1.18 million, ranking 43rd out of 80 countries and territories investing in Vietnam. Meanwhile, Vietnam has an investment project in Bangladesh with a total capital of USD27,900. Bangladesh currently ranks 68 out of 72 countries and territories that Vietnam invests in.
Both Vietnam and Bangladesh have open trade policies, competitive workforces and incentives for foreign businesses. Vietnam has pursued an open trade policy through a number of free trade agreements, including the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), the EU-Vietnam Free Trade Agreement (EVFTA) and the UK-Vietnam Free Trade Agreement (UKVFTA). Vietnam has also changed domestic laws to make the business environment more attractive to investors. Several multinational companies such as Samsung, Google, Adidas, Nike, Foxconn and H&M have moved production to Vietnam to boost Vietnamese exports and investment.
However, bilateral trade between Vietnam and Bangladesh has not reached its full potential. While Vietnam and Bangladesh do not have a free trade agreement, both countries emphasize trade and offer the best conditions for entrepreneurs and business communities of the two countries to explore business and investment opportunities in both countries./.