Covid-19 won’t affect LDC graduation
Bangladesh will graduate from the least developed country (LDC) status in 2024 despite the Covid-19 fallout as it will attain all three of the required criteria, said Debapriya Bhattacharya, a distinguished fellow of the Centre for Policy Dialogue (CPD).
Bangladesh became the first LDC to qualify for graduation by meeting the required levels of all three criteria -- gross national income (GNI), human assets and economic vulnerability index (EVI).
The most recent data available suggests that Bangladesh's GNI per capita as well as human asset index (HAI) have increased significantly since the last triennial review.
"But despite having slightly deteriorated, the country's EVI also remains positive," he said while addressing an online discussion on "LDC graduation prospect of Bangladesh in the context of COVID-19".
The event, organised by the CPD, was held yesterday.
According to Bhattacharya, graduating from the LDC category will have serious implications for Bangladesh.
This includes loss of preferential access to foreign markets and subsidies on agriculture alongside increased compliance with intellectual property rights and payment of institutional fees.
The transition of Bangladesh to a lower middle-income country back in 2015 had created challenges for accessing concessional development finance.
This posed the challenge of "dual transitions", he said.
The coronavirus outbreak across the country began in early March and has had a trickle-down effect on the core graduation criteria as well as the supplementary criteria.
Bangladesh's graduation has been the most affected by this pandemic among its South Asian peers, Bhutan and Nepal, he added.
Regarding how the Covid-19 fallout has impacted the three criteria, Bhattacharya said the country's GNI per capita could fall below $1,640, which is far above the threshold for graduation.
However, the HAI will be the most affected as the sub-indicators of health such as maternal mortality ratio, under-5 mortality rate and prevalence of stunting are at a higher risk than those of education, which are adult literacy rate, gross secondary enrolment ratio and gender parity index of gross secondary enrolment.
The EVI will be least affected with export instability being its most reactive economic sub-indicator while the environmental sub-indicators should not show much change.
Therefore, it is difficult to assume that Bangladesh will slip on more than one criterion due to the immediate impact of Covid-19 as the country's scores on all three are high enough to withstand erosion.
Regarding the LDS graduation of fellow aspirants, Bhattacharya sad Myanmar has also actively explored ways to expedite the process since 2015 while Laos has also recently shown similar intentions.
Others, such as Nepal, Angola and Timor-Leste, are in a more difficult situation though due to overdependence on tourism and oil.
However, none of these countries have yet to inform about any intention to delay their graduation dates.
The Committee for Development Policy (CDP) has undertaken a comprehensive study to assess the pandemic's implications on LDCs in general but with a particular focus on the ones graduating.
The CDP, a subsidiary body of the United Nations Economic and Social Council, will decide the countries approved for graduation during its next meeting scheduled for the last week of February 2021.
With regard to securing early graduation, Bhattacharya said there is a need for an evidence-based political decision on the matter as soon as possible.
It would only be politically opportune for Bangladesh if the triennial review in 2021, which coincides with the country's 50th anniversary of independence, provides the final go, he added.
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