Economic Reporter :
South Korean Ambassador to Bangladesh Lee Jang-keun on Wednesday said his country will significantly increase the size of soft loan to Bangladesh to $3 billion from current $700 million.
“This amount will be implemented during the next five years, between 2022 and 2026,” he said while speaking at the “DCAB Talk’ held at Jatiya Press Club.
Diplomatic Correspondents Association, Bangladesh (DCAB) organised the event. DCAB President Rezaul Karim Lotus and its General Secretary AKM Moinuddin also spoke. Previously, the size of the soft loan agreed between the two governments was $700 million during the five-year period of 2021 and 2025.
Soft loan from South Korea is known as the Economic Development Co-operation Fund (EDCF) and the interest rate is between 0.01 per cent to 0.04 per cent.
So far South Korea has provided $1.34 billion of EDCF concessional loans to Bangladesh for 27 projects.
The ambassador said with this increase Korea can now assist bigger development projects of Bangladesh. “I believe that this will help Bangladesh for the smooth graduation from LDC in 2026.”
Ambassador Lee said even though Korea’s Official Development Assistance (ODA) to Bangladesh is relatively smaller than those of Japan, US and Europe, Dhaka is the third major recipient of Korea’s ODA. “We expect that Bangladesh will be the second largest recipient this year,” he said. In the area of the Foreign Direct Invest (FDI), he said, there has been continuous inflow of Korean investment to Bangladesh. He said Korea remains one of the major foreign investors in Bangladesh. According to the BB, the accumulated stock of Korean FDI increased to $1.4 billion in 2021/22 from $1.1 billion in 2019/20. “Korea is the fifth major foreign investor,” he said, adding that this all shows how the relations between the two countries are growing.
Lee said his mandate is to strengthen the bilateral relationship between Bangladesh and Korea.
In this regard, in the beginning of his mandate in Bangladesh, the ambassador presented three major objectives of his work during his term – diversification, elevation and generation.
He laid emphasis on diversifying the RMG-cantered cooperation and taking the relations into a new height – 50 years of diplomatic anniversary – focusing on the young generation – talented, ambitious youth. Bangladesh and South Korea will celebrate the 50 years of diplomatic ties next year. “I am making various plans and efforts to make next year a meaningful year for the future of our relationship.”
He said making a documentary about two countries’ 50 years of friendship was one of his preparations.
Bilateral Trade
Highlighting the progress in bilateral trade, the ambassador said the trade volume between Bangladesh and South Korea reached a record high in 2021 crossing $2 billion. According to the Korean statistics, South Korea’s export to Bangladesh recorded $1.63 billion in 2021, 58 per cent increase from 2020, while Bangladesh’s export to South Korea reached $552, 40 per cent year-to-year increase.
“It is a very meaningful development because the bilateral trade volume has been stagnant for more than 10 years since it reached the peak of $1.8 billion in 2011,” said Ambassador Lee, adding that this increasing trend of bilateral trade is continuing this year as well.
