Published in Dhaka Tribune on Thursday, 23 June 2016
What Brexit would mean for us
Sheikh Shahariar Zaman
People in the United Kingdom are set to vote in the Brexit referendum today, deciding whether Britain should leave or remain in the European Union.
Bangladesh along with the rest of the world is closely monitoring the development, as a British decision to leave the EU – an economic and political bloc involving 28 European countries – would have an immense impact on a wide array of Bangladesh issues including trade, aid, financial transaction and transportation.
A senior diplomat at the Bangladesh High Commission in London said as far as Dhaka was concerned, the cost of exit from the European Union was huge.
Requesting anonymity, the diplomat said Prime Minister Sheikh Hasina and her British counterpart David Cameron met in May on the sidelines of the Japan G7 outreach programme meeting.
The diplomat quoted Sheikh Hasina as speaking at the meeting about how staying in the EU would be beneficial for the continued economic advancement of the British people.
Hasina also said that in an integrated and connected world, Britain should stay in the European Union to protect its own interest.
The diplomat said as a least developed country (LDC), Bangladesh currently enjoys duty-free market access under EU’s Everything But Arms (EBA) mechanism.
“If Britain decides to pull out from the EU, then the entire trade preference mechanism would have to be renegotiated,” he said.
With around $2.2 billion in earning, the United Kingdom was the third biggest export destination for Bangladesh in the 2013-14 fiscal year.
Asked which side of the Brexit campaign was being favoured by half a million Bangladeshi-origin British nationals, the diplomat said it was difficult to say.
He, however, said the curry industry in the United Kingdom – owned by Bangladeshi-origin Britons – was campaigning for leaving the EU.
“They are under a feeling that if Britain leaves the EU, the immigration system would be relaxed and they can recruit more from Bangladesh,” the diplomat added.
He said it was unlikely to happen as the immigration policy was an extremely sensitive issue and related to the core domestic politics.
A recent UK data showed that about 10,000 curry houses employ 100,000 people with an annual sales of £4.2 billion.
In a recent report, London-based Daily Mail said curry bosses were in favour of leaving the European Union.
In the report, president of the Bangladesh Caterers Association in the United Kingdom, Pasha Khandaker, was quoted as saying that five restaurants were being forced to close every week due to the UK’s immigration policy.
The present EU immigration rules put restriction on employing migrants from outside the European Union.
Debapriya Bhattacharya, a former Bangladesh ambassador to Geneva and currently a distinguished fellow at the Centre for Policy Dialogue, said if the Britons took the “unfortunate” decision of exit, then all the obligations of Britain under the EU arrangement would become null and void.
Citing an example, he said Britain gave duty-free market access for the LDCs; but that is an EU arrangement.
“If it decides to leave, Britain must announce that it will respect the commitment it made under the EU and then it will have to sit with the LDCs to settle the trade preference,” Debapriya said.
The primary concern would be if UK decides to leave the EU, the euro currency would weaken and it will have a direct impact on Bangladesh’s export competitiveness.
Last year, Bangladesh exported over 10 billion euros worth of products to European destinations.
Debapriya added that if the “leave” decision is made, it would have impact on aid, financial transaction, transport and logistics sector as well.
The development cooperation under the EU mechanism would not be applicable to Britain if it decides to leave, meaning new commitment and renegotiation would be needed not only with Bangladesh but also with the whole world, Debapriya said.
About financial transaction, he said many Bangladeshi transactions routed through the London financial market and it would be a completely different scenario if Brexit becomes successful.
About transportation, he said many Bangladeshi businessmen consider London as their European hub where they send goods to be forwarded to other European locations.
Debapriya said if London pulls out of the EU, then it would completely depend upon the new border mechanism arrangement between Britain and the European Union.