Rafiqul Islam Azad, Dhaka: Bangladesh’s leading economists, analysts and researchers have put emphasis on charting a national strategy for the country’s smooth graduation from the Least Developed Country (LDC) group in 2026.
They have urged the government to involve business community, professionals and experts in the process of formulating this strategy to make it inclusive and worthy.
The experts opined that immediate measures should be taken to identify the challenges and prospects following the graduation of the country that crossed the thresholds of all its three defining criteria in 2018.
Even though Bangladesh was set for moving out of LDCs group in 2024, the graduation year was deferred by two years in view of the COVID-19 pandemic and a request from the Bangladesh government.
To cope with the challenges of the graduation, the business community wants the country to get preferences and privileges from developed nations in tax and duty-free access to export markets at least for a decade and deal with provisions of Trade-Related Aspects of Intellectual Property Rights (TRIPS).
“All the graduating countries required preparation of their own national strategy for smooth graduation. Bangladesh also needs to formulate a robust LDC transition strategy that will cover the upcoming five years and beyond,” said Dr Debapriya Bhattacharya, a Distinguished Fellow of Centre for Policy Dialogue (CPD).
Talking to The Independent, the leading macroeconomist pointed out that Bangladesh government has already moved into the line and is working on it. “I think the Task Force has already been engaged in formulating the national strategy to smoothly deal with the LDC graduation,” he said.
The National Task Force under the Prime Minister’s Office that was set up in 2016 to monitor the implementation of the graduation roadmap has been reconstituted accommodating a total of 22 government secretaries from the different line ministries. Besides, the task force has also formed a number of committees to help prepare a necessary plan of action.
Dr Debapriya Bhattacharya, a member of United Nations Committee for Development Policy (CDP), said now the focus of all discussions and discourses is centred on getting preferences and privileges to overcome the challenges after the graduation, but necessary measures should also be taken to reduce dependence on others.
The public policy analyst put emphasis on enhancing participation of business community like FBCCI for streamlining and opening up the process in formulating the national strategy to deal with the graduation from LDC group.
“Substantive inclusion of the private sector and non-government development organisations in this process is a must,” he added.
The national transition strategy has to address two specific challenges facing Bangladesh, namely the COVID-19 pandemic and the Rohingya refugee crisis. The post-coronavirus recovery plans and programmes need to be embedded in the transition strategy, he said.
“The strategy should deal with the possible fallouts of LDC graduation and should also lay the foundations for graduation with momentum. The availability of such a document would allow the international community to support Bangladesh more effectively.”
Dr Atiur Rahman, a development economist, said there should be a national committee led by a senior minister accommodating the stakeholders to provide policy guidelines in formulating the country strategy.
“Let them (Task Force) execute the process and implement them but there should be a national committee above them to provide policy guidelines in this regard,” he said.
Dr Rahman, an honorary Professor of Department of Development Studies in Dhaka University, suggested the government to include representatives from home-grown development organisations and NRBs who have a huge support to earn foreign remittance.
He also batted for inclusion of private sector people in the process as what he said about 75 per cent investment would come from the private sector.
Dr Rahman, a former governor of state-run Bangladesh Bank, said the opinion of development partners like USA, EU, UK, Japan and China should also be taken into consideration as their technical supports would be needed for boosting the blue and green economy.
Dr. Mustafizur Rahman, a Distinguished Fellow of CPD, said there are many committees under the Task Force and they are working on finding out different challenges after the graduation.
“We hope that the committees will come out with specific proposals and their implementations in dealing with the post-graduation situation,” he said.
The development policy analyst said that there should be an inter-ministerial negotiation cell so that they can efficiently negotiate at different levels in the face of different challenges after the graduation. He also suggested the inclusion of professionals and experts in the process of formulating the country strategy.
A government secretary preferring anonymity said that the National Task Force has formed seven committees that would deal with World Trade Organisation (WTO) issues, provisions of TRIPS, international market access, foreign aid, and mobilising domestic financial resources and Foreign Direct Investment (FDI).
“The committees under the Task Force are working on preparing their respective plan of action for smooth graduation,” he added.
The CDP of the United Nations in its triennial review in February confirmed that Bangladesh is eligible to exit from the LDC category.
In the 2021 review, Bangladesh stands strongly in all three criteria with a per capita GNI of 1827 USD (USD 1222 required), EVI of 27 (32 required), and HAI of 75.4 (66 or above required).
The CDP of the United Nations in its recommendation noted that it expects that the extended preparatory period of five years will enable Bangladesh to not only tackle the ongoing global health and economic crises and the exposure to external shocks but also to engage with its development and trading partners in preparing a smooth transition strategy and to plan for a post-graduation international trade landscape.
The UN CDP also underscored the importance of preserving necessary policy space while negotiating possible bilateral and regional agreements and considering a number of priority policy areas to support its development during the preparatory period for a smooth transition.
It also called upon Bangladesh’s development and trading partners to extend preferential market access and to exempt enforcement of the TRIPS for a reasonable period, which has to be negotiated at international levels and bilaterally with Bangladesh.
Meanwhile, Bangladesh Garment Manufacturers and Exporters Association (BGMEA) urged the European Union (EU) to continue giving its trade benefits for Bangladesh for 12 years after the graduation from LDCs.
BGMEA President Faruque Hassan made the urge during a meeting with EU Ambassador to Dhaka Charles Whiteley on Wednesday.
The extension will help Bangladesh in making smooth transition from LDC and preparing to face post-graduation challenges, he said.
Garment accounts for about 84 per cent of country’s total export earnings.
According to a government study, Bangladesh’s export earnings and the flow of concessional foreign financing and grants will decline once it becomes a developing country.
The study titled “Impact assessment and coping up strategies of graduation from LDC status for Bangladesh” projected loss of exports and grants and higher debt service costs that would lead to higher current account deficit.
The General Economics Division (GED), a wing under the planning ministry, prepared the study before the COVID-19 pandemic.
The biggest blow will emerge in the form of the loss of duty-free market access. The projected export loss from garment products in the European Union and non-EU markets was estimated to be about 5 per cent of the total exports in the fiscal year of 2017-18, said the study.
This amounts to a loss of $7 billion in FY27, which would steadily increase to $13 billion by FY31.
The study suggested taking policy actions to counter these projected losses.
