Bangladesh to shed LDC label soon

The government deserves credit for taking steps to better the country's prospects to graduate from the least developed countries' (LDC) category within the foreseeable future. The three criteria are Gross National Income (GNI) per capita, Human Assets Index (HAI) and Economic Vulnerability Index (EVI), and the country has scored well above the minimum threshold for all three categories this year. We need to maintain these scores in all three categories for the next six years to be able to graduate from the LDC club.

The main challenges lie in addressing income criteria, HAI and EVI. What we need to remember is that a LDC must meet at least two of these three criteria to remain on track. Hence, it is up to the government to smoothen the journey by keeping focus on reducing the percentage of undernourished population if we want to meet the HAI index. Similarly, extra emphasis needs to be put on rehabilitation efforts for the homeless in an age of climate-induced natural disasters—a scenario that is not new to this country. Policymakers will have to come up with ways to increase agro-production in a country where increasingly, farmlands are being grabbed and turned into industry and real estate.

We have to remember that once we graduate from LDC, the country will not continue to enjoy certain privileges that only LDCs enjoy, particularly the low interest rate credit available from major multilateral financial institutions like the World Bank and ADB. In that case Bangladesh may not be getting preferential access to the major export destinations. Indeed, according to the government's own estimates, Bangladesh is likely to lose around USD 2.7 billion in export earnings once it is no longer a LDC. These are serious issues that will have to be addressed so that the economy and the people can adjust to the likely upshots when we graduate in 2024.