Analysts fear that Bangladesh could be in trouble in many ways as Western sanctions on Russia and the international transaction system expel some of the country’s banks from Swift.
Twelve Russian and two Belarusian banks have been delisted from Swift. The ban will take effect on March 12. The Rooppur nuclear power plant used to transact money through one of these banks. The Russian bank, called Bank for Development and Foreign Economic Affairs (VEB), in a message sent to Bangladesh Bank through Swift system a few days ago, has banned them from doing business for the time being. Similar messages have also come to Bangladeshi commercial banks from other banks under the ban.
The Bangabandhu Satellite-2 project is new. Last month, Bangladesh Satellite Company signed a memorandum of understanding with the Russian company Glavcoms to launch Bangabandhu Satellite-2, the country’s second artificial satellite. Analysts are skeptical about how far the deal will go in the current context.
Russia launched an attack on Ukraine on February 24. Then the westerners started issuing various sanctions. Russian President Vladimir Putin warned on Friday not to impose any more sanctions.
Bangladesh’s exporters are already in crisis. According to business and bank sources, on the one hand, there are problems in opening such bonds, on the other hand, the demand for clothing in the Russian market has declined.
Bangladesh exported about 490 million worth of goods to Russia in the 2019-20 fiscal year. In the fiscal year 2020-21, it increased to 75 million, a growth of about 36 percent. Exports are mostly garments. In the fiscal year 2020-21, Bangladesh imported goods worth 460 million from Russia. Russia is the main source of wheat in Bangladesh. Corn also comes from the country.
Concerned parties say that it is difficult and time consuming to develop an alternative transaction medium. However, the world’s largest banks have nothing to do with those banks. Doing business in Chinese currency could also lead to Western sanctions. As a result, there are risks. Transactions are also being seen as an alternative to establishing relations with Russian banks that are not under sanctions. But it also depends on the time and situation.
Selim Raihan added that it remains to be seen what kind of action the West will take on Russia in the future. One push after another will come in front. Now there is no chance to blow them up. For this we need to be more integrated in policy and strategy.
