The United Nations Committee for Development Policy (CDP) has recently announced that Bangladesh has become eligible for graduating from the Least Developed Country (LDC) category to developing country status. What types of opportunities have been created for the country by getting the status?
The graduation from LDC will help Bangladesh attract more investors given its strength in certain areas such as the size of its Gross Domestic Product (GDP), exports, and population, compared to other LDCs. Consequently, it will help Bangladesh’s credit worthiness which is reflected through better credit ratings. Such graduation will also help Bangladesh have more opportunities for taking commercial loans from the international market at competitive interest rates and thereby generating capital and mobilizing resources from the global market.
What challenges does the status bring for Bangladesh, as the country will lose some of the benefits it enjoyed as an LDC?
Bangladesh is entitled to have duty-free market access for all products in all developed countries except for apparel exports to the United States (US). This creates a huge opportunity for the country. After graduation, however Bangladesh is going to face “preference erosion.” Because of the imposition of an additional tariff on its exports of 6.7% in the absence of preferential treatment, Bangladesh will lose about 8% of its total exports. According to a think-tank’s study, the loss will be equivalent to $2.7 billion.
So, where does Bangladesh have to focus first in the transition to developing country status?
From my point of view, firstly Bangladesh will have to focus on identifying the challenges for being a developing country, and to set a sustainable course of action to address the challenges.
We are working already with a master plan about becoming a developed country by 2041. In addition to this, we have to formulate a transitional policy of our own for being a developed country, and then we have to come up with the vision-oriented action.
You know that the country’s present development is basically driven by the private sector, while the business climate is worsening with the decreasing position of the country in the World Bank’s ease of doing business index in the last year. So, what can be done for the private sector’s development?
You are right. The private sector entrepreneurs are really very good in our country. Although they don’t get enough support from different sides like political, social and even from the bureaucrats, the businesses are doing well. So, we have to focus on developing a smooth business climate for them.
What are your suggestions for Bangladesh’s smooth transition to developing country status?
Bangladesh needs to prepare itself for a smooth graduation by taking into consideration certain issues like ensuring foreign assistance with development priorities and foreign direct investment, diversifying its export basket and market, enhancing technological upgrading, training and skill development of human resources, and achieving resource efficiency and improving productivity.
Bangladesh needs to comply with stringent conditions such as improved work conditions, higher poverty alleviation efforts, women’s empowerment, and the reduction of carbon emission. In order to overcome the challenges, the Bangladesh government has already undertaken certain initiatives like aligning national development plans with the SDGs, developing National ICT Policy-2009 and undertaking “Perspective Plan of Bangladesh 2010-2021: Making Vision 2021 a Reality”.