Brief on Bangladesh-Spain Bilateral Relations

As of 19 November 2021

Bilateral Diplomacy and Visits

Bangladesh and Spain have been maintaining friendly bilateral relations since
establishment of diplomatic ties in 1972. Spain is among the first few countries to recognise
Bangladesh’s independence. Both the countries have their diplomatic resident missions in their
respective capitals.

The Embassy of Bangladesh in Spain has actively remained politically engaged with the
high officials of the Spanish Government including those in the Ministry of Foreign Affairs,
European Union and Cooperation. Bangladesh has been able to put across its position on the
political situation, especially on the Government’s monumental task in dealing with extremism
and terrorism, fighting corruption, curbing poverty, undertaking mega projects of development,
upholding secular, pluralistic, and democratic values and practices. Bangladesh has not faced any
adverse comments either in Spanish media or by the Spanish Government in respect of
Bangladesh’s internal matters such as the execution of War Criminals and the propaganda about
violation of human rights and so on. Rather, Hon’ble Prime Minister Sheikh Hasina’s
Government’s proactive measures in dealing with religious extremism, terrorism, and political
violence in Bangladesh have profusely been appreciated by the Spanish officials who have
lauded Bangladesh’s socio-economic development, Hon’ble Prime Minister’s Sheikh Hasina’s
leadership, her contribution to the women empowerment, and her Government’s success in
fighting terrorism and extremism.

Hon’ble Prime Minister of Bangladesh, Sheikh Hasina, visited Spain in December 2019
for the 25th United Nations Climate Change Conference (COP25). In October 2019, Mr. Khalid
Mahmud Chowdhury, honourable Minister of State, Ministry of Shipping, led the Bangladeshi
delegation at the International Maritime Organization Conference held in Torremolinos (Malaga,
Spain).

Mr. Fernando Martí Scharfhausen. President of the Nuclear Safety Council of Spain,
visited Bangladesh in 2018 and met his counterpart from Bangladesh for signing an MoU
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between the two institutions in the framework of the construction of the first nuclear power plant
in Bangladesh.

Mr. Ignacio Ybañez Rubio, the then Secretary of State (equivalent to State
Minister/Deputy Minister) visited Bangladesh in March 2015.

Last four years, Spain supported Bangladesh in almost as many international elections as
passed through this Mission. There could be more that the Mission was not aware of.

Trade and Investment

There is no institutional framework for bilateral relations between the two countries in
the economic and commercial sphere. There are no signed Agreement for the Promotion and
Reciprocal Protection of Investments, Double Taxation Agreement or Financial Programmes
with Spain.
In the recent past, Spain has emerged as Bangladesh’s fourth largest export destination in
the world after the United States, Germany, and United Kingdom. Bangladesh is Spain’s fourth
largest trade partner in Asia after China, Japan and India. Some bilateral export-import figures
are furnished below:

Export from Bangladesh to Spain

Sl Year Value (Billion US$)
1 2020-21 2.34
2019-20 2.19
2 2018-19 2.56
3 2017-18 2.45
4 2016-17 2.02
5 2015-16 1.99
6 2014-15 1.75

Import of Bangladesh from Spain

Sl Year Value (Million US$)

1 2019-20
2 2018-19 205.01
3 2017-18 184.47
4 2016-17 125.10
5 2015-16 120.88
6 2014-15 165.05

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 95% of Bangladesh exports to Spain belong to RMG sector (Tariff Chapters 61 and 62).
Major Export Products to Spain are textile and clothing, footwear, sporting goods, leather and
leather goods light engineering (toys) etc.
Major Import Items from Spain are chemical products, machineries, textiles, computer
hardware ceramic frits etc.
Spain is one of the major investors in Bangladesh among the EU countries. Spain is
actively investing in Bangladesh in several promising sectors, such as textiles, power plants,
water supply, cement, leather, ceramics, etc. Some of the major Spanish investors belong to
prominent multinational companies like TSK, Isolux Corsan, Cobra-Tedagua, Lafarge Surma –
Cementos Molins, EuroArte, Pies Cuadrados, El Corte Ingles, Roca, Porcelanosa, etc.
Renowned Retail giants Inditex, El Corte Inglés and Mango are adding value to
Bangladesh’s Textiles by redefining trends and fashions. Telstar Proyectos is manufacturing
insulin through their Bio-tech plant at Square Pharmaceuticals Ltd in Kaliakoir, Gazipur. Azbil
Telstar is providing high-tech solutions in engineering, construction and manufacturing process
through its subsidiary in Dhaka. Roca is providing sustainable and quality bathroom solutions.
Porcelanosa is focusing on ceramic flooring and wall tile that are unique and cutting edge. Cobra
Tedagua is supplying safe drinking water to the citizens of Mirpur, Dhaka. Cementos Molins in
partnership with French Company Lafarge Cement is manufacturing over 1 million tons of
cement every year. TSK is currently providing 950 MW of power through three Power Plants in
Ashuganj. Isolux Corsan is serving 885 MW of power through its power plants in Dhaka, Khulna
& Sylhet.
On 19 and 20 November 2019, the Spanish international trade promotion agency (ICEX)
organized the event ‘Multilateral Partnership for Development in Bangladesh 2019’ which took
place in Dhaka with the participation of companies from infrastructure, education, emergency aid
and financial sectors. The participating companies held working meetings with the Multilateral
Financial Institutions (World Bank and Asian Development Bank), Bangladesh’s Ministries of
Planning, Railways, Transport, Defence and Education also participated as well as a large group
of Bangladeshi companies.
Before the COVID-19 pandemic, bilateral trade figures followed a continuous growth
path (close to 30% between 2018 and 2019). However, the closure of clothing stores in Spain in
2020 meant a drastic reduction in the volume of Bangladesh exports and imports from Spain, as
most of the imported products are linked to the manufacture of clothing. Since the summer of
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2020, the pace of trade prior to the pandemic has gradually recovered and it is reaching pre-
COVID-19 levels.

Investment Instrument -FIEM

Recently Spain has proposed some projects for Bangladesh under FIEM loan. The
Corporate Internationalization Fund (FIEM) is a public instrument managed by the Spanish
Secretary of State for Trade aimed at promoting the presence of Spanish companies and products
abroad. The beneficiary must be a public or private company that is non-resident in Spain. FIEM
financing is available in different formats:
• Buyer credits (to finance the import of Spanish goods and/or Spanish services).
• Funding for projects under Project Finance schemes carried oud by Spanish companies
abroad.
• Financial support for investment in Spanish subsidiaries abroad.

The versatility of the fund enables access to finance for projects executed by Spanish
companies in nearly any country in the world. FIEM has a significant leverage capability: 1.5
billion euros-worth of FIEM loans have been approved until 2017, enabling the implementation
of export and investment projects associated to funding of over 3 billion euros, evidence of their
significant leverage capability. 88 operations have been approved in this period: ranging from
major projects such as the construction of a petrochemical plant in Saudi Arabia for a FIEM loan
value of 300 million dollars, to projects by Spanish SMEs worth under a million euros such as a
factory in India.

Tied Financial Support in Concesional Terms (Soft): In case of public beneficiaries,

concessional loans may be granted to medium to low-income countries according to the World
Bank and OECD classification. The eligible countries are listed in the FIEM guidelines, which
are
published annually on the website www.comercio.es/fiem. Elements such as the interest rate,
grace period and repayment terms are taken into account in order to calculate the degree of
concessionality.

•Funding limit: 100% of the contract.

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 • Minimum concessionality level: 35%
• Minimum concessionality level in Least Developed Countries (LDCs): 50%

FIEM resources: The funds generated from the fund's own activity, reimbursements of
principal and the collection of interest and fees charged on the loans and annual budget
allocations assigned to the Ministry of Industry, Tourism and Trade.

Types of operation: Of a general nature: the reimbursable financing of projects, in

concessionary or market conditions, tied to the acquisition of Spanish goods and services or to
the execution of Spanish investment projects or those of national interest. In special
circumstances: non-tied reimbursable financing, non-reimbursable financing and non-
reimbursable contributions or loans to multilateral development bodies or international financial
institutions of which Spain is a member and in which there exists a commercial interest.

Special interest for the internationalisation strategy:

- Projects furthering the internationalisation of Spanish small and medium-sized
enterprises.
- Projects involving direct investment or the export of goods and services of Spanish
origin and production accounting for a sufficiently significant percentage of the financing.
- In the absence of a significant percentage of goods and services of Spanish origin and
production, the existence of circumstances justifying classification as being of national interest.

Beneficiaries: States; Foreign Regional, Provincial and Local Public Administrations;

Foreign Public Institutions; and foreign public and private enterprises and corporate groups and
consortiums, both in developed and developing countries.
Not eligible: Heavily-indebted countries although, exceptionally, the Council of
Ministers may approve reimbursable financing for HIPC at the culmination stage; Exceptionally,
FIEM financing may also be awarded to international bodies provided that the contribution is of
a clear commercial interest.
Amounts financed: FIEM may finance up to 100% of the amount involved in the project.
In some cases, FIEM financing may be completed with: Local funds, Financing from multilateral
development institutions or, in others, with commercial loans carrying official Spanish backing
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(MIXED LOAN).
Financial conditions: Specific conditions applicable are determined on a case-by-case
basis.
Arrangement and administration: As the State's Financial Agency, ICO (Public Institute
of
Credit) negotiates, signs and administers FIEM financing agreements. The agreements are signed
with the financial agent designated by the government of the country receiving the loan (Ministry
of Finance, Central Bank, public enterprise, beneficiary). The financial agent must have its
government's sovereign guarantee or any guarantee as may be determined at the time the
financing
is approved.
Disbursement: The financing is disbursed in accordance with the milestones established
in the commercial contract signed by the exporter. Through a financial institution established in
Spain, ICO pays the companies executing the project as they provide the financial institution
with
documentary proof of the contract's fulfilment.

Consular and Welfare

Spain hosts one of the biggest Bangladeshi expatriate communities in Europe. The exact
number of the expatriates is difficult to determine because of the internal movements of the
expatriates within Europe. However, the number could be as high as fifty thousand if the
undocumented migrants are counted.
Bangladesh Embassy in Madrid put wholehearted emphasize on providing easy, service-
seeker-friendly consular service. It keeps fulfilling our promise to send regular consular teams,
one team every two-month, to Barcelona – where the bigger part of the Bangladeshi expatriate
community is concentrated – to provide consular services. Given the high concentration of
expatriates in Barcelona, the Mission has proposed to the Government to open a Consulate
General in Barcelona.
The most significant improvement in the consular area has perhaps been reducing to
almost nil the rumour of corruption in delivering consular services in collusion with some
insiders by unscrupulous middle-men from the community. While the outsiders could still be
active, the Mission is confident that internal corruption has been eliminated.
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 The Mission has also taken other welfare initiatives apart from the above. A waiting
room was finished constructing by mid-2016, to provide comfort and safety to the service-
seekers. While in the past the service-seekers had to wait either in the open space in rain and cold
in winters or inconveniently in the basement, now they are able to avail of the comfort of the
newly-constructed waiting room.
For the welfare of the community, the Mission had been urging all the concerned
authorities in Bangladesh to release the MRPs to the applicants who had no criminal records. The
Hon’ble Foreign Minister has taken some effective initiatives in this regard and the Mission is
positive that the DIP would not discriminate in releasing MRPs to the expatriates in Spain. A
major welfare demand by the community, to bear all the expenses of transportation of the dead
bodies of the expatriates, has not been met yet. As of now, the Ministry of Expatriates’ Welfare
and Overseas Employment pays only the cost of the air-ticket of carrying a dead body which is,
more or less, one fifth of the total cost incurred to send a dead body from Spain to Bangladesh.

Political Situation in Spain

Following the defeat and banishment of Muslims who ruled Spain for 711 years between
eighth and fifteenth centuries, Spain emerged as a unified country and as the biggest colonialist
in the world occupying most of the America’s in the 16 th and 17th centuries which was followed
by a decline that continued until the Spanish Civil War from 1936 to 1939 which was won by the
pro-church, pro-kingdom fascist General Francisco Franco who continued to rule Spain since the
end of the Civil War to his death in November 1975. Thus 1975 is the year when the modern
democratic Spain began its journey under the auspices of pro-democracy King Juan Carlos who
is the father of Spain’s present Head of State King Felipe VI.
Since the death of General Francisco Franco in 1975, Spain had had democracy,
economic growth, and economic progress until December 2015 with governments alternating
between the Socialist Party and the Popular Party. Since becoming a member of the EU in 1986,
Spain had established itself from a poverty-stricken country to the fourth largest economy within
the EU leaving behind EU members like Greece and Italy as far as prosperity was concerned. In
those four decades of functional government between 1975 and 2015, Spain had effectively dealt
with Basque nationalists and dismembered their separatist terrorist group ETA. Spain had also
become a champion of modernity and human rights. However, the emergence of centre-right
Ciudadanos and anti-austerity left leaning Podemos as two new political parties constituted by
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youthful leaders and activists raising hope for betterment in every sector and appealing to young
people inept about politics injected, ironically, the political stability in Spain that has continued
over the last four years and that seems to have no end to date. The political spectrum was further
blurred by the rise an ultra-rightist party Vox formed in December 2013 that came to the light in
the recent past on anti-immigrant and other white supremacist issues (though not overtly
declared) presumably inspired by the US President Donald Trump.
In the last six years, Spain has had four elections, the last one on November 10, 2019.
The previous election was held only six months before, in April 2019. In that election, out of 350
seats in the lower house, the Chamber of Deputies, the Socialist Party (PSOE), under the
leadership of the present interim President of the Government (equivalent to Prime Minister),
Mr. Pedro Sanchez, got the highest number of seats, 123, but could not manage the support of
176 Deputies, mandatory to form the government. The result was the election that took place on
10 November 2019.
Before the last election, Spain was rocked once again by violence in Catalonia caused by
the jail-sentence of nine Catalonian separatists receiving punishment from 13 to 9 years. Fifty-
nine years old Oriol Junqueras, the principal accused among the detained separatists, received 13
years in the verdict handed down on 14 October 2019. His boss, Carles Puigdemont, who had
fled Catalonia along with half a dozen separatists to end up in Brussels, could have received a
higher sentence for sedition. Carles Puigdemont, however, has been carrying an international
arrest warrant. The sentenced separatist leaders will have two chances of appeal, one to the
Spanish Constitutional Court and another to the European Court of Human Rights located in
Strasbourg.
In the latest protests, hundreds of separatists, onlookers, anti-separatists were injured in
the clashes with Catalonian and national police as thousands of people came to the streets every
evening since the verdict and vandalized and burned public properties and police vehicles. More
than a hundred police personnel have also been wounded. Fortunately, for the central
government, none died in the violence, which received not an iota of sympathy either in the rest
of Spain – perhaps except in the Basque Country – or Europe. The protesters were organized
under the leaderless banner of Democratic Tsunami. There also have been huge, but smaller,
rallies in favour of Spain’s unity. Two years ago, on 27 October 2017, Catalonia declared its
independence unilaterally and unconstitutionally prompting the central government to take the
rein of the region although subsequently local election was given paving way to rule Catalonia
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by the separatist politicians and the rule of the centre was withdrawn. At the height of the
separatist movement, Bangladesh supported Spain’s territorial integrity and constitution. A press
release issued in this regard by our Ministry of Foreign Affairs is enclosed herewith for kind
information.
One of the significant events that took place lately in Spain was the exhumation of the
remains of General Francisco Franco from his stately grave in the Valley of the Fallen. The
interim government of Mr. Pedro Sanchez took the remains of the Dictator from the Valley of
the Fallen which was built to commemorate the martyrs of the Spanish Civil War from both
sides. The reason behind the banishment of Franco’s remains from a significant monument could
best be described by Mr. Sanchez’s voice: the past can be forgiven but not forgotten.
From hindsight, neither event, exhumation of Franco’s remains and efficient handling of
violence’s in Catalonia before November election, has helped Mr. Sanchez much in the election
as may be seen from the election results given in the table below along with the results of the
previous election.
Party Seats Seats Ideology
November 2019 April 2019
Socialist Party (PSOE) 120 123 Center-left
Popular Party (PP) 89 66 Center-right
Podemos (UP) 35 42 Left
Ciudadanos (CS) 10 57 Center-right
Vox 52 24 Ultra-right
Major Catalonian 21 22 Center-left
Separatists
Others (regional parties) 23 16
Total 350 350

The results of the last election show that to form a government with the support of the
requisite minimum number of 176 Deputies would be more difficult this time than it would have
been with the results of the election that was held in April this year. But there is one clear
pattern, in the rise of ultra-rightist Vox, that to the Spanish citizens, as to many nations of Europe
and Americas, xenophobia, Islamophobia and migration-phobia are much more important than
economy and stability. Vox’s sternest stance against the Catalonian separatists also added to its
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success. In the table above, the first five parties are considered as national. But one of them, the
Ciudadanos, which did well in the previous three elections, has suffered the biggest shock.

The positive thing is, in less than forty-eight hours after the results of the last election
results were published, the Socialist Party (PSOE) and the Unidas Podemos (UP) leaders, the
then interim Prime Minister Pedro Sanchez and the idealistic leftist Pablo Iglesias, signed a
preliminary agreement to form a coalition government after long secret negotiations although
they received only 155 seats (PSOE, 120 and UP, 35) in the election of 10 November 2019 while
these two parties had gotten 165 seats (PSOE, 123 and UP, 42) in the election of 28 April 2019
following which the UP had declined to accept the similar agreement and thus had killed Mr.
Sanchez’s bid to form the government that time when their success had been highly likelier than
this time.
It could not be known whether the UP leader, the ponytailed and oratory Pablo Iglesias,
has changed his stance which was always in favour of a referendum on the issue of the
independence of Catalonia, a position that made him one of the most hated politicians in the
recent time in all over Spain except in Catalonia. Despite the hatred he receives from a great deal
of Spaniards, he consistently proved that he has a support-base across the country, presumably a
result of his idealism and pro-poor perspectives. Nevertheless, his declared policy on the issue of
the secession of Catalonia has made him an unlikely coalition partner in a government. This was
the core reason that had made the Socialist Party leader and Prime Minister, Pedro Sanchez,
ambivalent about him which ultimately turned into their failure to strike a coalition deal
following the previous election. It seemed that Mr. Iglesias by any means wanted to stop the
ultra-rightist Vox from gaining any more ground in the landscape of Spanish politics and this
could be the reason behind the new agreement for coalition and Mr. Iglesias’s so compromising a
stance in favour of a socialist government under the leadership of the then interim Prime
Minister Mr. Pedro Sanchez.
The government’s hope that the victory of Salvador Illa, the former Socialist Health
Minister and candidate in February’s Catalan election, would enable it to, in his words, ‘stitch
Catalonia back together’ after a decade of polarisation over independence for the region did not
materialise, although the Socialists almost doubled their number of seats to 33 in the 135-strong
Catalan parliament and were the most voted party.

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 Now the first important point to note is that there was no question of the ultra-rightist
Vox (which has come out as the third biggest winner in the last election with 52 seats)
supporting the PSOE-UP coalition which has expressly been formed to stop the further growth of
the Vox, an attempt which could prove abortive retrospectively. The total number of seats gotten
in this election by the Popular Party (89), the Vox (52), the Ciudadanos (10), the Catalonian
separatist ERC (13), and the Catalonian separatist JxCAT-JUNTS (8) is 172.

However, the PSOE (120) - UP (35) coalition ultimately received support of 30 more
Deputies from the following parties, i.e the Catalonian separatists (ERC) (13), the Basque
Nationalist Party (6), Basque Country Unite (EHB) (5), MP-Equo (3), Compromis (1),
Regionalist Party of Cantabria (PRC) (1) and Teruel Exists (TE) (1), and presented to the King
the support of 185 seats in total for the King to ask the coalition leader Mr. Sanchez to take the
oath as Prime Minister (or the President of the Government, as the high position is called in
Spain).

COVID-19 Situation in Spain

The COVID-19 pandemic hit Spain harder than most countries. More than 5 million
people have been infected, the eleventh largest number in the world, and over 87,000 died from
coronavirus.
The virus was first confirmed on 31 January 2020, when a German tourist tested positive
in the Canary Islands. By 13 March, cases had been confirmed in all 50 provinces and the next
day the government declared a state of emergency, which ended on 21 June after three months of
lockdown, the strictest in Europe. Policymakers did not take scientific advice sufficiently into
account during the first wave: frontiers in Public Health ranked Spain near to bottom in its
classification of 24 countries based on adhering to scientific advice.
The lifting of restrictions over the summer produced a second wave of infections and a
six-month state of emergency as of 25 October. An irresponsible easing over Christmas and the
New Year caused another spike in infections and a third wave, leading to a tightening of
measures which reduced the 14-day cumulative case count per 100,000 residents from 900 in
January to just over 150 at the end of March 2021, when the infection rate began to rise again.

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 The economic impact was also severe. GDP shrank 10.8% in 2020, the deepest recession
in 80 years and the harshest in Europe (see Figure 2). The main factor behind the larger than
average impact is the weight of the tourism and hospitality sectors (26% of GDP –five points
more than the EU average–), which have been decimated. The number of international tourists
plummeted from 83.7 million in 2019 to below 20 million last year, the lowest figure since the
late 1960s and generating just 4% of GDP compared with the usual 12%. Spain has the most bars
and restaurants per capita in the world (one for every 175 people, according to a 2019 report by
the National Statistics Institute). The unemployment rate, which stood at 14% when the
pandemic started, close to double the EU average, rose to 16.2% at the end of 2020, less than
predicted by some forecasters, including the Bank of Spain, because of the success of the job
retention scheme known as ERTEs. Spain’s fiscal response to COVID-19 in 2020 was the lowest
in the euro zone, according to the European Central Bank (ECB). Measures accounted for 1.3%
of GDP compared with an average of more than 4%.
The almost €200 billion of new funds that Spain will receive from Next Generation EU
and the EU’s Multiannual Financial Framework (MFF) over the next six years for physical and
human capital give the country a golden opportunity to make its economic model more
sustainable and on a sounder footing
Spain has now received a total of 77,832,689 doses of Covid-19 vaccines (55,775,979
from Pfizer-BioNTech, 10,790,560 from Moderna, 9,107,850 from AstraZeneca and 2,158,300
from Janssen). Based on total figures collated up to the end of Tuesday 16 November, 2021, a
total of 74,168,369 jabs have now been administered across Spain, representing 95.3% of total
doses received. 38,177,685 people have now received at least one dose of the vaccine,
representing 80.5% of the total population (90.6% of the population aged over 12). 37,487,833
people have now been fully vaccinated*, representing 79.0% of the total population (89.0% of
the population aged over 12). According to “Our World in Data: Oxford University”, Spain is the
second biggest country in terms of vaccination of COVID19.

Spain at a Glance

Name of Country: Kingdom of Spain

Type of Government: Parliamentary Constitutional Monarchy

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 National Day: 12 October (1492), commemorating the arrival of Christopher Columbus
in the Americas

Head of State: King Felipe VI

Head of Government: (President of the Government or Prime Minister) Pedro Sanchez

Minister: Ministry of Foreign Affairs, European Union and Cooperation: Mr. Jose
Manuel Albares Bueno

Minister: Ministry of Transport, Mobility and Urban Agenda: Ms. Raquel Sánchez
Jiménez

Area: 505,370 sq km

Population: 47.35 million

GDP (in ppp): $1.281 trillion US dollars (fourteenth largest in the world and
fourth largest in the EU) (2020)

GDP Per Capita (in ppp): $27,057 US dollars (2020)

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