Al Amin :
Bangladesh-Russia bilateral trades and investments are going to be at risk due to cut off a number of Russian banks from the main international payment system (Swift).
The US, EU and their allies have taken the tough measure to isolate Russia from the international financial system for its invasion of Ukraine.
Swift, or the Society for Worldwide Interbank Financial Telecommunication, is a secure messaging system that makes fast, cross-border payments possible, enabling international trade.
So, if Russia can’t use this network, it will be difficult to pay the import and export bills. It will also hamper the country’s investment in Bangladesh.
According to a data of the Export Promotion Bureau (EPB), Bangladesh exported goods worth $66.53 crore in 2020-21 fiscal year, most of them are readymade garment items.
On the other hand, Bangladesh imported goods, maximum food items, worth $46.67 crore during this time.
Most of the payments of the bilateral trades have been settled by the Swift system. So, the businesses of the two countries will remain in trouble, if the transaction system suspends.
Mohammad Hatem, Executive President of the Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA), told The New Nation on Monday, “Major portion of the export-import payments are settled indirectly. Transactions worth only $20-25 million are settled directly per year between the two countries.”
“This portion is likely to be closed for this ban on Swift,” Hatem said.
However, as an alternative to Swift, Bangladesh has a proposal to settle transactions in a ‘currency swap’ system between the two countries. If the system can be implemented, there will be no problem in banking transactions, Bangladesh Bank sources said.
Dr Ahsan H Mansur, Executive Director of the Policy Research Institute (PRI), told The New Nation on Monday, “No transaction will be settled through the Russian banks, facing ban from the US and its allies, resulting in the bilateral trades between the countries will be suspended.”
He further said, “The bank’s, are now transacting with Russian, will have to face immense suffering and the LC’s payment will not be settled for imposition ban on Swift.”
“Bangladesh should not use the alternative payment system, which introduced by Russia,” he said.
Mohiuddin Rubel, Director of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), said, “Not only Bangladesh but many countries will have to face sufferings for this war. It is natural.”
“Russia is a big market for the readymade garments, although Bangladesh’s share is not too much for financial transactional and other complexities.”
“However, the export of apparel items started to increase rapidly in the last few years by overcoming the adverse situation. But, now it will be more difficult to continue trades with Russia for the legal barriers of currency transaction,” Rubel said.
Russia has been trying to move away from dealing with Swift transactions for a long time because of its hostility to the Westerns. The country has already introduced an alternative international transaction system ‘SPFS.’
The country has also proposed Bangladesh to use this system for banking transactions. But, Bangladesh is yet to be responded to this call.
