Bangladesh’s Position in the Context of Global Supply Chain and Geopolitical Shifts: An Analysis for 2025

The world today isnavigating a complex, rapidly changing, and polarized geopolitical and economicstructure. At this critical juncture in 2025, the global supply chain is nolonger just a matter of efficiency; it has become a pillar of nationalsecurity, strategic control, and economic resilience. Increasing trade,technological, and military competition is redefining the flow of internationalcommerce. Within this immense landscape, Bangladesh, as an emerging economicmarvel of Asia, warrants a highly crucial and multi-dimensional analysis of itsposition. Our geographical advantages, pace of economic growth, and prudentdiplomatic maneuvers will determine our future in this new global context.

The global supplychain in 2025 is not limited to the simple 'China-Plus-One' strategy anymore.It has now moved into new concepts like 'Friend-Shoring' and 'Diversificationfor Resilience'. Western nations are currently looking for partners who can notonly supply goods at low production costs but also adhere to their values,especially Environmental, Social, and Governance (ESG) standards. In thisscenario, Bangladesh enjoys a unique advantage. The revolutionary progress ourreadymade garment sector has made in compliance, workplace safety, and theconstruction of green factories over the past years has greatly strengthenedour image as a‘credible alternative’ to global buyers. Recent reports from theInternational Labour Organization (ILO) and UNICEF point to our positiveefforts in child labor eradication, a very important consideration for Westernmarkets. However, the challenge isn't confined to garments; it’s essential toensure this compliance in high-value and technology-dependent sectors as well.Specifically, by maintaining transparency and global standards in the lightengineering, pharmaceuticals, and IT-Enabled Services (ITES)sectors, we canbecome a larger partner in the global supply chain. To make this transformationsuccessful, it is necessary to swiftly invest in the use of advancedtechnologies, like blockchain-based supply chains, which will further increasebuyer confidence.

Geopolitically,Bangladesh, due to its strategic location on the Bay of Bengal, is situated atthe center of the geopolitical rivalry between the two major superpowers in theIndo-Pacific region: China and India. The Bay of Bengal is a lifeline forglobal trade, and Western powers, especially the US, Japan, and the EuropeanUnion, are increasing their economic and strategic presence to ensure a 'freeand open Indo-Pacific'. The most important thing for us is to maintain an independent,neutral, and balanced foreign policy. China's Belt and Road Initiative (BRI) isenhancing our physical infrastructure, particularly port capacity, which isessential for overcoming our logistical weaknesses. On the other hand, Westerncountries are offering investment proposals centered on agendas like goodgovernance, democracy, and human rights, which are vital for securing ourexport markets. Not becoming overly dependent on any single power or bloc, andassessing every relationship based on the standard of national economicinterest, will bring us great benefit. For instance, by ensuring multinationalpartnerships in projects like the Matarbari deep-sea port, we can become aneutral center for regional connectivity. Establishing ourselves as this 'ConnectivityHub' will exponentially increase our diplomatic bargaining power as a smallereconomy.

While graduatingfrom the Least Developed Country (LDC) list in 2026 is an honor for Bangladesh,it brings significant structural challenges to our economy. Firstly, upon LDCgraduation, we will lose duty-free benefits (GSP), which could result in anadditional tariff of 6% to 14% on our main export products, severely reducingour competitive capacity in the international market. To deal with this, thegovernment must rapidly enhance its ability to negotiate Preferential TradeAgreements (PTA) and Free Trade Agreements (FTA) with the European Union, theUK, and other major trade partners. Intensive training for Ministry of Commerceofficials to gain expert skills in trade negotiations is imperative.

Secondly, thewithdrawal of the waiver we enjoyed under the TRIPS Agreement (Agreement onTrade-Related Aspects of Intellectual Property Rights) will multiply the productioncosts of our pharmaceutical industry. This will especially impact theproduction of medicines for complex diseases like cancer. The government mustengage in strong diplomatic efforts to retain some benefits through bilateralagreements, even outside the TRIPS framework. Economic diversification is theonly solution to meet these challenges. According to forecasts by the IMF andADB, to maintain GDP growth, we must attract foreign investment and increasedomestic capacity in sectors like advanced technical textiles, agro-processing,medical devices, and IT. Ensuring an 'Ease of Doing Business' environment and areliable supply of gas and electricity should now be a national priority forthe rapid implementation of the approximately $1.85 billion in investmentproposals that came in during the first eight months of 2025.

Thirdly, the corestrength to face global challenges comes from a country's internal stabilityand institutional capacity. The economic indicators of 2025—especially highinflation, liquidity crisis, and the burden of defaulted loans—are creatingserious pressure on the country's macroeconomy. To ensure sustainable growth,attention must be paid to ensure that steps like strict reforms in the bankingsector, bringing transparency to the National Board of Revenue (NBR)'s revenuecollection process, and increasing turnover tax do not put undue pressure onbusinesses. It is urgent to simplify the investment process and make itharassment-free by quickly implementing initiatives like the 'Bangladesh SingleWindow' system. An unwavering commitment to political stability and goodgovernance will act as the most crucial catalyst for restoring the confidenceof not only domestic entrepreneurs but also international investors. Throughthese collective efforts, Bangladesh will be able to not only secure but alsosolidify its position as a significant economic power on the world stage.

Writer:Sakif Shamim, Managing Director, Labaid Cancer Hospital .