The nation especially government officials were seen dancing and marching with banners and t-shirts celebrating Bangladesh’s possible graduation to a developing nation by 2024.
This is indeed very good news. For last several years Bangladesh has arrested much international attention particularly from foreign investors.
Our “made in Bangladesh” has occupied adequate shelf-space in the large super-stores in North America, Europe, Japan, Australia, and even the large markets in Asia. Our micro-entrepreneurship is being championed worldwide.
Social safety net programs driven by subsequent governments turned out to be very successful in alleviating ultra-poverty. There has been a significant rise in women’s participation in the workforce and in women entrepreneurship.
More and more people can afford kindergarten or private university education and access health care.
Consumerism is evident almost everywhere due to a sizeable jump in disposable incomes. We have a nearer-to-independent media and the country is increasingly determined to be democratically run.
The UN had reportedly seen a “lot of benefits” for Bangladesh once it officially graduates to a developing country by 2024, but says that substantial challenges still remain.
There are lots of positive benefits to graduation,” visiting UN Assistant Secretary-General was heard saying. But there is a perception that graduating to a developing country status means that Bangladesh will lose all special benefits, as in, the foreign loans, grants, and export support available to the least developed countries (LDCs), and that this could have a “big impact” on the future financing for development.
The status of an LDC is usually a signal to the international investment community that this country “is not the best place to invest in.”
The graduation in every possibility would send a strong message to investors globally that Bangladesh is
a place for investment.
As LDCs, the international perception is -country’s capacity is low, infrastructure is not sufficient and institutions are not strong. After graduation, the ratings agencies should rate Bangladesh higher for investments and subsequently the cost of investment in Bangladesh will come down significantly, particularly if the volume is significantly larger, which is the likely scenario when a nation is richer. The interest rate Bangladesh has to use for borrowing internationally will be lower too.
As Bangladesh moves through the next step, there should be more assistance from the UN to work with the government to assess the impact of graduation.
Bangladesh in 2015 also advanced from a low-income country to a low-middle income country on the World Bank’s scale.
According to the UN, a country is eligible to graduate from the LDC category if it has a gross national income (GNI) per capita of $1,230 or above for three years, a Human Assets Index (HAI) of 66 or above and an Economic Vulnerability Index (EVI) of 32 or below.
Bangladesh has fulfilled the three conditions on a very large margin. Bangladesh’s current per capita income is $1,610. The HAI is 72.9, while the EVI is 25.
Bangladesh will undergo a few years of observation and can officially graduate to a developing country by 2024 at the earliest after the next review in 2021. However, it is“almost certain” that Bangladesh would achieve the status. The countries who have prospects from graduation - Botswana, Cape Verde, Maldives, Samoa, and Equational Guinea – Bangladesh is much bigger than others with its 160 million people.
As discussions followed, lots still remain to be done to achieve a sustainable transition from LDC to middle-income developing country. There are lots of challenges such as challenges of climate change, job creation, urbanization and the issue of inequality still exists. Bangladesh’s economy desperately needs to be diversified starting with the export basket.
What Bangladesh Government, NGOs and business community need to do to smoothen the journey? Prompt answer would be-`get ready to face the world’. `Do what similar countries are doing to increase per capita income, improve living standards more importantly build capacity and institutions to generate more earnings for the government and safe-guard public interest’. NGOs have to embark on to building a self–sustaining “social business” or “social marketing” model if they do have a large network.
The government should be shrewd about where to allocate resources – ideally, to areas that have the most need and promise the biggest returns. And NGOs and other organizations receiving those funds must get better at using funds efficiently and implementing programs that improve outcomes, not just output.
Our struggle to rise above corruption, political cronyism, and the acute intelligence and creative deficiency must be emboldened in order to gain more momentum. Only then can we achieve our target of graduating by 2024.
Mamun Rashid is a leading economic analyst.