Russia exported 2.7 million tons of wheat to Bangladesh in 2023 calendar year. Bangladesh is planning more wheat import from Russia, media has reported quoting sources concerned. According to multiple sources, Bangladesh is the third largest destination for Russian wheat outside of the Eurasian Economic Union, an alliance of five former republics under the Soviet Union. Besides, Russian diplomats claim that Bangladesh has increased the import of fertilizers from that country.

Bangladesh attempted to import crude oil from Russia. But, the Russian crude oil cannot be imported directly as Bangladesh’s refineries are not capable of refining it. Russian observers claim that Bangladesh is currently importing Russian oil after getting it refined in India or West Asia. Besides, Russian entity Gazprom has been involved in gas exploration activities in Bangladesh for a long time.

The construction work of the Rooppur nuclear plant with the financial assistance from Russia is nearing completion. If everything goes as planned, the electricity from the first unit of the plant will be added to the national grid within this year. As per sources concerned, about 85 percent of the work of the Rooppur plant has already been completed.          

Russia got eliminated from international payment system Swift after its war with Ukraine started. The western world imposed a wide array of economic sanctions against Russia. Due to the unavailability of an immediate solution to the payment problem, it became difficult for Russia to conduct its bilateral trade with other countries. Under such a situation, China came to its aid by including Russia in its payment system called Cross-border Interbank Payment System (CIPS).  The system has now turned into a significant channel to conduct bilateral trade with other nations.     

Chinese currency Yuan was included in Bangladesh’s payment system last month. Through this induction in the automated clearing based on real-time gross system (RTGS), Russian observers and Bangladeshi analysts think it will be easier for Bangladesh to get connected with CIPS. They are of the opinion that this will create an opportunity for Russia to increase its participation in Bangladesh economy.

Aleksei Zakharov, research fellow at the Institute of Oriental Studies of Russian Academy of Science, wrote in an expert opinion published by Delhi-based think tank Observer Research Foundation on February 23, “Without China’s involvement, it was impossible for Russia to continue its financial engagement with South Asia. Be it agriculture or energy, a significant chunk of Russia’s transactions with the countries of the region takes place through CIPS. The increased use of China’s financial infrastructure has now become lifeline of the Russian economic projects.”

Bonik Barta has reached out to the Russian Embassy in Dhaka for comments in this regard.       

Russia has recently become interested in strengthening economic relations with Bangladesh. Russian Ambassador to Bangladesh Alexander Mantytskiy told a program at the National Press Club on December 7, last year, “In South Asia, Bangladesh is the second largest trading partner of Russia after India. This was not hindered even during the pandemic. The volume of trade between the two countries reached $2.97 billion, a record high, in 2021. The western countries imposed unilateral sanctions against Russia in 2022. Due to the interruption in production and logistics chains, Russia’s bilateral trade with Bangladesh and other countries got impacted. As a result, the Bangladesh-Russia trade volume reduced to $640 million.”

He went on to say, “There are many reasons to hope that in 2023 the trade volume will get back to the level of 2021. For example, Russia is increasing export of wheat and fertilizers to Bangladesh. Russian companies are ready to export one million tons of food grains and half a million tons of fertilizers to Bangladesh every year on G2G (government to government) basis.”          

Russia has long been showing interest to increase its participation in Bangladesh’s power and energy sectors. Moscow came up with a proposal to sell fuel in May, 2022. Bangladesh Petroleum Corporation (BPC) was given the task to work on the Russian proposal. Directives were also given from the top tier of the government to study the feasibility. Based on that crude oil sample was brought from Russia to Bangladesh and tested at Eastern Refinery Limited (ERL). But, an ERL technical committee in its report stated that it was not possible to refine crude oil at the refineries in Bangladesh. Later, Russian energy and oil organization Rosneft was informed of the development.

Moscow is providing a loan of $11.38 billion for the Rooppur nuclear plant. Most of the construction work has been completed.     

Investors from Russia are now keen to import readymade garments from Bangladesh, claim Russian diplomats. At that program in December, the Russian envoy said, “Many international brands decided to leave Russia since 2022. So, Russian businesses are now looking for new sources, including Bangladesh. Investment here from the state and individuals could reach to billions of dollars.”

“Russian companies are prepared to undertake joint ventures with Bangladesh in ICT, pharmaceuticals, space technology, geological survey, maritime, railways and air transportation,” he added.

People doing business with former Soviet republics are talking about alternative arrangements against the backdrop of western sanctions against Russia. Commonwealth of Independent States-Bangladesh Chamber of Commerce and Industry (CIS-BCCI) Honorary Adviser Mahbub Islam Runu told Bonik Barta, “Bangladesh has a huge business potential with the countries belonging to former Soviet Union. We are trying for a long time in this regard. Our direct trade with Russia suffered a severe a blow due to the sanctions against Russia. In this context we want an alternative system. China or India can be our associate here. Recently in Moscow, I have talked to officials of Chinese and Indian banks to create the opportunity to do business with Russia through setting up branches in Bangladesh.”

According to bankers, Bangladesh’s benefits from inclusion in the Chinese payment system will depend on how much opportunity the country can create to export its commodities there. Syed Mahbubur Rahman, former chairman of Association of Bankers Bangladesh and managing director of Mutual Trust Bank, told Bonik Barta, “Our trade with Russia still continues. Our transactions take place through Poland. Besides, BRICS alliance is getting stronger. It has advanced well in introducing its own currency. On the other hand, oil-rich countries are also agreeing to make transactions in their own currencies. CIPS is getting stronger as an alternative to Swift system. But, Bangladesh’s advantage from the inclusion of Yuan in RTGS system will depend on the country’s Yuan-dependent export volume.”