H.E. Ms Sidsel Bleken, Ambassador of Norway to Bangladesh

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An Evolving Partnership

Norwegian Investors see promise in ICT and Renewable Energy sectors

Bangladesh and Norway have had diplomatic relations since 1972. From that point till now, how do you think they’ve evolved?
I think it has evolved very positively. It started out with Bangladesh being mainly a development partner for Norway for many years. Gradually, the partnership has moved from development cooperation to trade and investment, as well as also more political dialogue and also working together on global issues in the United Nations and other multilateral fora.

Could you talk about the policies regarding the repatriation of funds – how money goes out and how money comes in, which has an effect on the way that people think about Bangladesh in terms of investment. What can the Central Bank do to ease the process?
A foreign company investing in a country is interested in contributing to the economic development of the country. It is also interested in establishing an economically viable entity and earning a profit. This profit can be reinvested in the company, but it must also be possible to transfer profit back home to the owners of the company. Bangladeshi regulations allow for such repatriation of funds. However the rules are complicated, and not the least, the procedures are time-consuming. I think the simplification of the process and more efficient handling of the cases would be very helpful.

How is Norway and Bangladesh working towards establishing a sustainable business environment?
Bangladesh needs more foreign investments, and we would like to see more Norwegian companies investing here. We try to have a good dialogue with relevant authorities, for instance, the Bangladesh Investment Development Authority (BIDA). That is helpful, and we focus on the investment climate and ease of doing business. This is sometimes challenging. There are national actors that do not always promote investments coming from abroad. It is understandable, and we see it in many countries, that there is a tendency to protect national investments. However, I believe for Bangladesh to continue to have substantial economic growth, you need to bring in foreign capital. You also have to bring in knowledge. Foreign companies can contribute to advanced technology and also be able to share this technology with Bangladesh. There are a number of areas of common interest, areas where Norway has special competence. Let me mention the energy sector, in particular, renewable energy; also the IT sector and the maritime sector are areas of interest for future cooperation and investment.

The government is interested in improving Bangladesh’s ICT and energy sectors and making them bigger. So what kind of investments can we anticipate from Norway or Norwegian companies in Bangladesh in the ICT and energy sector?
Let me start with the energy sector – we hope to increase our investments in renewable energy. Norway’s main sources of renewable energy are hydroelectric power, which is not so relevant in Bangladesh. But, we also have companies that are working on investments in solar power plants in Bangladesh. Hopefully, they are now close to signing agreements with the government, after 2-4 years of investigation and negotiations. This is not the small home-based solar panels – that has been quite successful in the villages – but large solar power stations. One challenge we have seen when it comes to solar power stations is that it requires quite a lot of land, which should not be agricultural land. The final power purchasing agreement for the first solar power plant with the Norwegian company Scatec solar will hopefully be signed in just a few weeks. If that is successful, we hope more projects will follow, also from a company called Norwegian Renewables.

Other Norwegian companies have been here for many many years like Bergen Engines, that sells Rolls Royce gas- and diesel engines to power stations. We hope, in the future, there will be more gas engines because that is much more environmentally friendly. We also hope that Norwegian companies can come in on energy efficiency and transmission lines.

In the ICT sector, of course, you are well aware that the largest Norwegian investment in Bangladesh is GrameenPhone. It is sort of flagship when it comes to ICT. They are ready to make more investments, although there are challenges related to predictability when it comes to rules and regulations. They have already contributed, tremendously to connectivity and economic and social development. Also, within the ICT sector, there should be prospects for future cooperation. There are so many young people running startups, having bright ideas. India has been very successful when it comes to giving services to other countries. I believe Bangladesh also has an opportunity and we hope to work with Norwegian companies to make them aware that there is actually competence in Bangladesh in this area.

In terms of Grameenphone and Telenor, there are certain challenges even within Bangladesh, like when they were setting up the 4G network, the government was being difficult and they had to get certain bandwidths. Does that deter Telenor from investing and continuing the journey in Bangladesh?
I think it makes them even more determined to broker out solutions with the government. It takes cooperation from two parties and for the government to see that this is actually beneficial for Bangladesh. This is not only because GrameenPhone has major investments, but they also contribute substantially to the national revenue through the payment of taxes. Next to come is 5G, and GrameenPhone is more than ready to invest in 5G, given that business conditions are good, that it is possible to have predictable and stable regulations.

Moving on to the agricultural sector, the government of Norway joined forces with the private sector and led a farm to market to unlock opportunities in Africa in 2018. Are there any such plans with the agricultural industry in Bangladesh, considering that the Prime Minister works closely with grassroots?
There has been a tremendous improvement in the productivity of the agricultural sector in Bangladesh, being self-sufficient in rice production. Yara, the large Norwegian fertilizer company, which is one of the partners for the African initiative, is so far not in Bangladesh, because rice is your main crop and they are not very strong on rice. But, Bangladesh has such a growing agricultural market with a variety of crops. I will inform Yara about the development, and look for possibilities in the future. One example is the huge increase in potato production. In Bangladesh, it is not so much about physical access, rather the transport routes that is the challenge, because distances are not that large, although the roads are not always that good. Marketing strategy, but also addressing the international market is more challenging. Also, the quality of the product when it gets to the market, the transportation system and supply chain matters. Fruits and vegetables are more perishable. That’s a challenge for Bangladesh and quality control and a cold chain is needed.

We’ve talked about a couple of areas where Norway is definitely interested or has already pledged their support to Bangladesh. Are there any sectors we haven’t spoken about, where Norway has either given financial support or technical support in any development sectors?
As I said, the development corporation has gradually been reduced, but still, we have a smaller amount for development projects. There is one interesting project which is in the ship breaking or ship recycling industry. Norway has for a number of years cooperated with the Ministry of Industries and the International Maritime Organisation improving both working conditions and environmental conditions in the ship recycling industry. We hope this will contribute to making Bangladesh able to sign up to the Hong Kong Convention, which is an international convention that regulates ship recycling. It would be extremely beneficial for Bangladeshi ship recycling industry because then more countries could send their ships here. For the time being, no Norwegian ships are ending their life on Bangladeshi shores because of the environmental pollution problems, as well as the labor conditions. Handling of hazardous waste is one of the requirements for the Hong Kong Convention which we expect both the government and the recycling industry will address. I think this is a very important project, because Bangladesh is one of the largest countries for ship breaking, and if we can contribute to making it safer, that will be an important achievement.

We are also working on another small project together with the International Finance Corporation and the Bangladesh Bank on making credit and financing available for small and medium-sized businesses by female entrepreneurs. Having more women into the formal economy is important for the future economic growth of Bangladesh.

One more thing I should mention, when it comes to the development corporation is the Rohingya crisis. Norway is contributing humanitarian funds to support Bangladesh in handling the Rohingya crisis. We will continue the support, and at the same time we will keep up the political dialogue with authorities in Myanmar. The Norwegian ambassador to Myanmar is coming here for a joint visit to Cox Bazar so she can get the opportunity to see for herself the conditions there. We have interactions between the two embassies all the time on this issue, where we discuss the immediate situation, as well as the medium and long term solution. One of the issues is what will the Rohingyas need when they return, and how can we assist them during their stay in Bangladesh, including building the skills they will need upon returning to Myanmar.

In the vision towards global peace, where does Norway see itself in the South Asia context?
South Asia, in general, is a very peaceful area, but you have the challenge with the India-Pakistan conflict, which is unsolved, and there is no opening for any kind of international intervention there. Norway is trying to have good bilateral relationships with all the countries in South Asia and we are encouraging mutual cooperation between the countries in the region.

Unfortunately, the regional organizations in South Asia do not really work well. In our bilateral dialogue with different countries, we also include regional issues and political cooperation and regional trade. We are actually going to have our meeting for Norwegian ambassadors to South Asian countries in Dhaka next week. Regional cooperation will be one of the top issues that will be discussed in the meeting.

You have a system whereby you have sovereign funds for your citizens from your oil industry. Would something like that be possible for Bangladesh? How would the citizens of Bangladesh benefit from something like that?
This rune has been set up by the Norwegian government with the revenue that comes from our oil and gas industry. We have a fiscal rule allowing the Government to spend currently only 3% of the return every year, to save the value of the fund for future generations. You might be interested to know that the Norwegian sovereign wealth fund has made investments on the stock exchange in Bangladesh, about 200 million US dollars in between 15 and 20 Bangladeshi companies. The first investments were made in 2015 and it has gradually increased.

Bangladesh and Norway are at a different level of economic development. In Bangladesh, what’s more, needed here, is for the government to work on the tax system, make sure that the tax base is broadened to bring in more revenue. Also, reforms in your institutions are needed, to make sure that this revenue is spent wisely and the people of Bangladesh will see the benefits of this. People don’t really want to pay taxes if they see that the government is wasting the money.

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