Bangladeshi diplomats in Moscow have cautioned Dhaka's traders against doing business with Russia now since the war-linked situation would not be normal anytime soon.
At the same time, they have been advised to be innovative and tactful in exploring the existing and latent opportunities.
The embassy of Bangladesh in Russian Federation in a recent letter to the ministry of commerce in Dhaka updated the possible impacts of the ongoing war and sanctions on bilateral trade and suggested a way out.
"The conflict in Ukraine is yet to unfold to a full shape and the changing situations make it very difficult to predict a scenario sustainable enough to make prudent decisions," mentioned the letter.
It said Russian economy is already feeling the effects of war, and the sanctions could over time further cause the stock market in Moscow to falter, deflate the value of the noble which hit an all-time low now and make doing business in Russia - increasingly difficult.
Merchandise export of Bangladesh to Russian Federation in the fiscal year 2019-2020 was US$487.29 million which rose to $665.31 million in the FY 2020-2021.
On the other hand, total import from Russia was $482 million in the FY 2020-2021 which shows that bilateral trade is in favour of Bangladesh.
Describing the potential impacts of sanctions imposed by the western nations, the letter said the current sanctions are "more stringent in two major counts".
"Firstly, the last sanction (imposed in 2014) was not preceded by any deadly pandemic. Secondly, there was neither banning from SWIFT nor freezing foreign reserves in the last sanction," it said. The businesses with European Union were quite normal then but this time it is a full blockage with almost cutting off Russia from the rest of the world.
Moreover, the sanctions came with various other restrictions which is expected to make a multiplier impact.
"So, if this sanction remains in force for a long period of time there are possibilities of hyper-inflation and economic turmoil which will have a deep impact on bilateral trade with Bangladesh," the letter mentions.
It says export from Bangladesh is likely to fall drastically this time because of the SWIFT ban.
Although Russia has its own system in place called FSPS, it is mainly functional for domestic banking. There are speculations about the possibilities of using the Chinese system of CIPS in future but that will not stop Russia being cut-off from the international transaction at the time being.
The embassy officials also put forward some possible opportunities for Bangladeshi traders that can be derived in this situation.
"There could be some opportunities when Russia feels isolated from the west and likely to strengthen business ties with other regions which it does not consider unfriendly," says the letter.
At the same time, it will also want to open alternative sources for various products to Russian market. Bangladesh can seize the moment and proceed with its interest tactfully so that it can gain some additional mileage tactfully without annoying the western countries.
It says Bangladesh has decided to engage with the region focusing on trade and investment whose ultimate goal would be to have a free trade agreement.
"It seems that it takes time to sign an FTA under normal circumstances but now is the time for us to push it forward," adds the letter.
It further suggests initiative to export pharmaceuticals in Russian market, start direct air service between Dhaka and Moscow, and also attract Russian tourists to Bangladesh.
syful-islam@outlook.com