South Korean Ambassador to Bangladesh Lee Jang-keun on Wednesday said his country will significantly increase the size of soft loan to Bangladesh to US$ 3 billion from current US$ 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 US$ 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 percent to 0.04 percent.

So far South Korea has provided US$ 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 US$ 1.4 billion in 2021/22 from US$ 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-centered 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.

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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 US$ 2 billion.

According to the Korean statistics, South Korea’s export to Bangladesh recorded US$ 1.63 billion in 2021, 58% increase from 2020, while Bangladesh’s export to South Korea reached US$ 552, 40% 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 US$ 1.8 billion in 2011,” said ambassador Lee, adding that this increasing trend of bilateral trade is continuing this year as well.

For the first seven months of this year, Korea’s export to Bangladesh recorded 46% year-to-year increase of US$ 1.4 billion, while Bangladesh’s export to Korea saw 35% increase with US$ 392 million dollars.

“It is encouraging that our bilateral trade is expanding in spite of the global economic crisis. We have to make efforts to maintain this upward trend of bilateral trade,” he said.

Employment Permit System (EPS) Workers

Before the pandemic, annually less than 2,000 Bangladesh expatriate workers have been sent to South Korea.

After the suspension of admitting new expatriate workers for almost two years, South Korea resumed it in December last year.

And this year, between January and August, more than 3,000 Bangladesh expatriate workers went to South Korea which is a record high number, said Ambassador Lee. “By the end of this year we expect the number will reach almost 4,000.”

He said there are more than 10,000 Bangladesh expatriate workers working in South Korea now. This year’s quota increased to 3,441 from 1,941.

The remittance sent by the Bangladeshi workers was more than US$ 209 million in the 2020/21 fiscal year which made Korea the 12th major remittance sending country, said the ambassador.