The impact of BREXIT on Bangladesh:

 The EU is the largest export market for Bangladesh.

 UK is the second largest Bangladesh-bound investor and the third
largest export destination for Bangladesh
 EU accounts for 55% and UK accounts for 12% of Global RMG export
of Bangladesh.

Bangladesh is not about to face a doomsday scenario when Britain

finally leaves the European Union in 2019 as expected. It is quite
possible that between now and 2019 (called “B-Day” in Whitehall)
when Britain officially leaves the EU, many other major events can
affect our economic and political landscape, but it is unlikely that the
economic prosperity of Bangladesh or its trade relations will change in
a big way entirely because of Brexit. But there are some changes on a
small scale that will possibly happen, such as more immigration from
Bangladesh to Britain, increased levels of trade with Britain, and more
international aid. However, a major factor that will affect us in the final
analysis is the precise terms of withdrawal negotiated by the EU and
the UK, particularly the trade deals. Against this backdrop, the UK
representative to UNCTAD Mr. Mark Mathews' assertions that Brexit
will have no impact on UK-Bangladesh relationship is a little empty,
since in the post-Brexit world, market forces will determine what
happens to trade relationships. Most importantly, if the UK falls into a
recession (the “income effect”) or its exchange rate goes down (the
“price effect”) for a sustainable time period, Bangladesh exports to UK
could be hurt. The British aid to all developing countries will drop by
$1.9 billion. Currently, UK is Bangladesh's third largest importer of RMG
(garments) after the US and Germany. The lower value of pound will
make Bangladeshi garments more expensive to British buyers, but this
“price effect” is expected to be minuscule and short-lived. Bangladesh
now enjoys a duty-free-quota-free status (DFQF) with the UK, and
unless something changes, we should be able to keep that DFQF status,
at least in the short run. On the other hand, our imports from the UK
will be cheaper and it might be a good time to buy British equipment
and other capital goods. It may be worth mentioning here that some in
the anti-Brexit camp have been predicting dire consequences of Brexit
for developing countries. Movement of labor, child benefit for migrant
workers, open fisheries, etc. In fact, the most clamorous voices in favor
of single market are equally vocal against the free movement rules.
Thus, it needs to be seen whether Britain can skilfully negotiate a deal
which lets it maintain the unfettered trade relationships it enjoyed
while it chooses to opt out of the less popular ones that the Brexit
voters rejected. Turning to immigration, it is a foregone conclusion that
the UK will tighten its immigration rules to slow down net immigration
from the EU. How that affects the rest of the world, including
Bangladesh, is still up in the air. In 2015, the UK had a net migration of
333,000 up from 318, 000 in 2014. “Some 630,000 people moved into
the UK in 2015, while 297,000 left the country, For a Net migration of
333,000. Of those, 184,000 came from the EU”. These figures are in
sharp contrast to David Cameron's promise in 2010 to keep the “net
migration” level to 100,000 (100K). While it is not clear if the new
cabinet in UK will adopt this 100K target, it is known that the new Prime
Minister Theresa May had as early as 2014 embraced 100K as the magic
number, and most recently reiterated her preference for the 100K
ceiling. In this context, Bangladeshi students who were planning to
study in the UK might find some universities or colleges of their choice
have tightened their admission rules. The new government is of the
view that many future migrants find colleges as easy entry points to the
UK.
 Implications for Bangladesh Economy:
 Trade:
 Why is the EU the best market for Bangladesh?
i. Duty-free market access for all products under Generalized
Preference System (GSP).
ii. More recent benefit: Duty-free, Quota-free market Access for all
products-except-arms to the EU market under everything but
Arms Initiative (EU-EBA).
iii. One-stage Rules of Origin.
 Bangladesh runs the risk of losing these benefits in the UK market.
 Export growth potential of Bangladesh may get undermined to a
large extent due to subdued demand in the concerned markets.
 Weaker currencies in the UK and the EU zones imply reduced buying
power and thus lower prospects of exports.
 Exporters’ earnings will lose value in currency exchange.
 Foreign Direct Investment:
 The uncertainty and volatility in UK market is likely to have adverse
impact on its investment bound to Bangladesh economy.
 Remittance:
 Devaluation of GBP will have immediate impact on Bangladesh’s
remittance.
 Migrant workers and non-resident Bangladeshis may postpone
sending remittance to Bangladesh until GBP revives.
 Foreign Aid:
 The flow of grants from both the UK and the EU is likely to be
affected based on their respective economic states.
 Official Development Assistance (ODA).
 Migration:
 All the estimates available are based on potential scenarios, since
nothing is concretely known about the process of withdrawal.

Aspects of impact of BREXIT on Developing

Countries:
 Slower UK growth and weaker Euro:
Slower growth affects in exports to UK from developing nations. AS a
result countries such as Bangladesh and Kenya are most affected.

 Uncertain migration flows:

Uncertainty in migration results in the downfall of external value of
Euro which consequently affects developing countries such as South
Africa, Uganda and Nigeria.

 Fall of UK aid:
10% of UK aid flowed through EU. Will UK maintain their 0.7% of GNI
aid target after BREXIT?

Question remains.