Govt to seek $1b budget support from Japan

Bangladesh is set to seek $1 billion in budget support from Japan during Chief Adviser Muhammad Yunus‍‍` upcoming visit to Tokyo from May 28 to 31. This high-level visit will also include the signing of at least seven memoranda of understanding (MoUs) covering areas such as energy, infrastructure, capacity building for special economic zones, and investment cooperation.

According to sources involved in the preparations, the Bangladeshi side will also push for sectoral cooperation in shipbuilding, railways, energy, and the blue economy. The discussions are expected to pave the way for enhanced Japanese involvement in Bangladesh’s development trajectory.

Yunus will attend the 30th Nikkei Forum in Tokyo as one of the featured speakers and is scheduled to hold several sideline meetings, including one with Asian Infrastructure Investment Bank (AIIB) President Ji Liqun. On May 30, he will meet with Japanese Prime Minister Shigeru Ishiba to discuss trade, investment, economic cooperation, and the Rohingya crisis.

Currently, annual trade between Bangladesh and Japan stands at around $4 billion. Negotiations for an Economic Partnership Agreement (EPA) are ongoing, with both sides aiming for a deal by the end of this year. More than 350 Japanese companies are already operating in Bangladesh, and many more have shown interest in investing, particularly in manufacturing and infrastructure.

Since 1971, Japan has provided approximately $24.72 billion to Bangladesh—almost equally divided between grants and loans. It is currently funding over 70 major projects in the country, including the Dhaka airport’s third terminal, Matarbari deep-sea port, and metro rail systems.

During a foreign office consultation in Tokyo on May 15, Bangladesh formally requested more concessional loans, extensions on repayment periods, and direct budget support. Foreign Secretary (East) Nazrul Islam confirmed Japan’s positive response to continued development assistance.

Additionally, Japan is expected to maintain duty-free, quota-free access for Bangladeshi products even after the country graduates from least developed country (LDC) status. Efforts are also underway to expand market access for Bangladeshi fruits and vegetables.

Japan’s engagement with Bangladesh is part of its broader strategy under the Bay of Bengal Industrial Growth Belt (Big-B) and Free and Open Indo-Pacific initiatives. Through these frameworks, Japan aims to support sustainable development and encourage Japanese firms to extend their manufacturing value chains to Bangladesh.

Bangladesh also intends to secure stronger Japanese backing on resolving the Rohingya refugee crisis, which remains a pressing humanitarian and geopolitical concern.