Taskforce formed to assess progress in LDC graduation
The government has formed a high-powered ten-member national taskforce to implement the roadmap for graduation from the Least Developed Country status.
The finance ministry will inform the cabinet meeting scheduled to be held today about the steps being taken.
The taskforce is led by the prime minister's chief coordinator on Sustainable Development Goals, Abul Kalam Azad, and includes a member from the General Economic Division of the Planning Commission and the secretaries of the Economic Relations Division, foreign ministry, statistics and information management division, commerce ministry and the finance division.
Besides, the executive member of the Bangladesh Investment Development Authority, director general of the Bangladesh Bureau of Statistics and the additional secretary of the ERD will be included.
The taskforce will identify the priorities for Bangladesh's graduation from the LDC bracket, review the progress in implementation of the roadmap and monitor its prospects and limitations.
Another committee has been formed with the additional secretary of the ERD as its head to look into the effect of the withdrawal of concessional loans from development partners upon graduation, said a finance ministry official.
The government steps come as a United Nations panel, the Committee for Development Policy (CDP), is expected to put Bangladesh on its graduation list next March as the country meets all three criteria: Gross National Income per capita, Human Assets Index and Economic Vulnerability Index.
The CDP will review Bangladesh's progress in 2021, and after a three-year transition period, official graduation from the LDC category will take place.
The ERD has already asked all ministries to send separate reports on what effect there will be when the country graduates, said the finance ministry official.
On the basis of the reports, the taskforce will take decisions on the next steps. A detailed discussion on Bangladesh's graduation from the LDC group was held during the Bangladesh Development Forum last week, where the ERD made a presentation on the possible effects.
Bangladesh is likely to lose about $2.7 billion in export earnings every year once it graduates from the LDC bracket, where it has been for 43 years, the ERD report said.
Upon graduation from the LDC status, exports will be subjected to 6.7 percent additional tariff as duty-free and quota-free benefits from different countries and trading partners will be withdrawn.
At present, Bangladesh is a major user of duty-free and quota-free market access, with shipments under this facility accounting for 72 percent of the total exports in fiscal 2015-16, the ERD report said.
Bangladesh enjoys preferential market access to more than 40 countries in varying degrees, said the Centre for Policy Dialogue in a similar study in March last year. The private think-tank came to the same conclusions as the ERD.
It is not just in export markets, as the country will also be hit when it comes to foreign aid.
Zahid Hussain, lead economist of the World Bank's Dhaka office, said duty-free and quota-free access for Bangladesh's exports will not come to a screeching halt the moment the country graduates from the least developed country bracket.
There are non-LDCs who get LDC benefits and there are LDCs who do not get LDC benefits, he said.
"My point is there are other factors that are also at work," Hussain said. Monowar Ahmed, additional secretary of the ERD, said they have started taking preparations for LDC graduation three years ago. "We are hopeful that Bangladesh will not face any big problem."