Ease cost of doing business to sustain graduation: analyst

Bangladesh needs to ease the cost of doing business and bring in massive regulatory reforms to create a conducive business environment to sustain the graduation from the least developed country grouping, said a noted economist yesterday.

It should maintain a smooth graduation and associated momentum and sustainability to prevent a revert and not fall in a middle-income trap, said Mustafizur Rahman, a distinguished fellow at the Centre for Policy Dialogue. With the use of modern technologies in production, Bangladesh may also face challenges of jobless growth and erosion of preferential trade benefits in the European Union, said Rahman.

He was presenting a keynote paper on "getting ready for LDC graduation opportunities, challenges and pathways towards sustainable graduation" at the Bangladesh Institute of International and Strategic Studies in Dhaka.

Bangladesh will lose $2.7 billion-worth export business in a year once it graduates to a developing one, and will face on an average 8.7 percent duty on export, particularly 12 percent in the EU markets and 7.3 percent in Canada, according to the expert.

Rahman said once graduating into a developing country, Bangladesh might not enjoy the benefits of the Agreement on Trade-Related Aspects of Intellectual Property Rights, which could also affect medicine prices in the local market.

So, the government should hold negotiations bilaterally and multilaterally to maintain the status quo in the pharmaceutical sector so that medicine prices do not go up in local markets and people can avail those at cheaper prices, he said. Borrowing from international partners will go up by 2 to 3 percent which will make foreign fund costlier, he said.

"We will have a lot of challenges, but we will also be able to overcome those as we have done in the past," Rahman said.

Ahsan H Mansur, executive director of the Policy Research Institute of Bangladesh, said Bangladesh could graduate to a developing country despite a lot of hurdles because of some of its inherent strengths.

 The country needs to address the issue of poor governance and political stability and internal and external conflicts for sustaining the graduation, Mansur said.

Shafiul Islam Mohiuddin, president of the Federation of Bangladesh Chambers of Commerce and Industry, sought a conducive business environment reasoning that the economy was led by private sector growth.

Rensje Teerink, head of the EU delegation in Bangladesh, said the country needs to ratify 27 conventions, including four core ones, of the UN to be eligible for the GSP plus to the EU markets after the graduation.

She also urged the government to amend the labour law before the International Labour Conference in June this year in Geneva and bring necessary changes in the labour law for export processing zones as per its commitments.

Teerink said Bangladesh seriously lacked investment in public transport.

She also suggested improving roads and highways, removing traffic congestions, constructing bridges, and bettering the country's business climate.

"Bangladesh is one of the few countries that met the graduation thresholds for all three criteria," said Christa Rader, country director of the World Food Programme. 

"And Bangladesh has done incredibly well on the human asset front with regard to – under-five mortality, percentage of population undernourished, maternal mortality, secondary school enrollment ratio, and adult literacy rate," she said.