To ensure inclusive development, the building of productive capacity should be the fundamental and core priority in Bangladesh's context
Bangladesh needs to concentrate on a robust transition strategy that focuses on private investment and revenue collection as well as improving quality of health and education for a smoother transition from the least-developed country bracket, said Debapriya Bhattacharya, convenor of the Citizen's Platform for SDGs Bangladesh.
The transition strategy must cover the upcoming five years and beyond, he said yesterday at a virtual dialogue styled "Bangladesh Qualifies for LDC Graduation: What Next?"
He stressed on strong coordination among the concerned ministries to formulate a strategy to reap maximum benefits.
The UN Committee for Development Policy (CDP) on Friday recommended Bangladesh for graduating from the LDC status.
The committee also made recommendations on the country's appeal to extend the final terminal period from 2024 to 2026.
To deal with the possible adverse fallout from graduation, a layout should also be chalked for graduating with momentum, which will ensure a smooth and sustainable development prospect for the country, said the economist.
To ensure inclusive development, underpinned by the growth of investment, employment and income, the building of productive capacity should be the fundamental and core priority in Bangladesh's context.
This would entail economic diversification, technological upgradation and improvement of labour productivity, said Bhattacharya, adding that focus on domestic market expansion and consolidation would be key to this end.
On the other hand, the government has to include good governance, human rights, inclusivity and inequality.
Besides, the country has to put in place a better coordinated and more result-oriented institutional outfit and mechanism at home.
Coordination among ministries, engagement of the private sector, non-government development organisations, and knowledge actors are also crucial, he said.
Essentially, the sustainable development goals must be used as the guiding framework for crafting a winning transition strategy, he said.
During the transition period, attracting private investment from home and abroad and creating a favourable investment climate would be the biggest challenge.
On top of that, increasing revenue collection to mobilize resources from domestic sources and investment to improve the quality of education and health service will be very crucial.
“The status of a developing country will increase investor confidence and credit ratings. As a result, investment from foreign countries will increase, while we will be able to collect low-cost funds from international markets to meet the investment demand.”
Graduated countries recorded slower GDP growth but also witnessed a rise in direct investment as investor confidence boosted with the developing status, while foreign aid did not decline and remittance remained unchanged, he said.
Loss of market access preferences< particularly in European and Canadian markets, may cause Bangladesh to experience a shortfall to the tune of 8-10 per cent of its gross export revenue due to loss of duty-free market access provision amounting to about $2.5 billion annually, the economist said.
However, Bangladesh will continue to enjoy market access preference in the EU and the UK for an extra three years until 2031.
On top of that, Bangladesh’s pharmaceutical industry will stop enjoying the flexibility seven years before the expiry of the globally stipulated preferential period, as a consequence of graduation as it will fail to avail special exemption of trade-related aspects of intellectual property rights.
He also urged the government to think beyond the loss of exports facilities, which is not as prioritised as loss of access to climate change funds, intellectual property rights, technology transfer schemes for LDCs and low-cost funds from the development partner and donor agencies.
Bhattacharya called for a concentration on South Asian cooperation to retain duty-free market access.
"We should take the guideline into consideration, which would be very crucial in case of international financing opportunities," he added.