Bangladesh will have to wait nine years more to get out of the Least Developed Countries (LDCs) status as the country still lags behind per capita income and human assets index despite faring well in economic vulnerability index, says a local think tank.
“The present situation suggests that it will not be possible for Bangladesh to come out of the LDC status before 2024,” observed Centre for Policy Dialogue (CPD) distinguished fellow Dr Debapriya Bhattacharya.
His observation came at the United Nations Conference on Trade and Development (UNCTAD)’s Least Developed Countries Report 2015 launching ceremony in the city yesterday.
The report is its annual publications which highlight the state of economic development in 48 LDCs, and opportunities and challenges of these countries.
Asked whether the country would achieve a higher-middle-income status by 2021 as claimed by politicians when Bangladesh has recently promoted to a lower middle-income country (LMIC) from a low income country (LIC) classification by the World Bank, Debapriya said, “Higher middle-income country by 2021 can be good as a political slogan, but it is not feasible in economic reality.”
Since 1975, Bangladesh, however, has been classified as a least developed country (LDC) by the United Nations Committee for Development Policy (UN-CDP).
“To be a higher-middle income country, Bangladesh’s current per capita income must be raised to $4,125 by 2021 from the current level. It needs to raise the per capita income several times, which is not possible,” said Debapriya.
According to the report, Bangladesh has performed well in Economic Vulnerability Index, but is lagging behind per capita income and Human Asset Index. Bangladesh per capita income is shown as US$926, which is far below the required threshold figure of $1,242 to achieve the income index.
The triennial UN report traditionally averages the previous three years statistics. So, the figure of $926 as the country’s per capita represents an average of the last three years. The next review in 2018 will use the statistics of the years 2015, 2016 and 2017.
“We have already achieved one of the criteria in the report. The human asset criteria can be reached by 2018 easily,” said CPD Research Fellow Towfiqul Islam Khan who presented the report.
Bangladesh needs to improve performance in per capita income and human development simultaneously to graduate from the LDC status as well as meet the requirements of the post-2015 Sustainable Development Goals (SDGs) agenda, according to the report.
“To come out of the woods, the policy makers should make a plan in line with the country’s seventh five-year plan and achieving sustainable development goals by 2030,” said Debapriya.
Bangladesh will begin to implement the seventh five-year development plan from next year.
“We failed to boost per capita income that is one of the main indicators of graduating from the LDC status because of a huge population, but we are very close to Human Asset Index,” added the CPD fellow.
“If Bangladesh achieves the two criteria by 2018, it will be listed for graduation, but for the next six years, it will be under observation. So, there is a bright prospect to be graduated by 2024,” he said.
The report laid the importance on structural transformation of rural economies in LDCs, emphasising its critical importance to fulfillment of SDGs targets globally.
“Such transformation needs to encompass agricultural upgradation both in case of investment and technology, diversification towards rural non-farm activities and maximise the synergies between the two.”
The report said rural development was the key to meeting the new sustainable development goals in all LDCs.
“Without development of the country’s agriculture, graduating from a lower middle-income country to an upper middle-income country is quite impossible,” Debarpriya said, adding that there must be space for the poor rural people.
The LDCs where poverty is seen systematically highest and falling most slowly, and so, obstacles are greatest. “The LDCs are, quite simply, the battleground on which the 2030 Agenda for sustainable development will be won or lost.”
LDCs get duty-free market access to developed countries, technical assistance and flexibility in international treaties, among other benefits.
The list of LDCs is reviewed every three years by the Economic and Social Council of the United Nations based on recommendations by the committee for development policy.
A country will qualify for graduation from LDCs if it meets the threshold for graduation of at least two of the three criteria – per capita income, human asset and economic vulnerability – during the period covered by at least two consecutive triennial reviews of the list.