Laudable progress in graduating out of LDC status
But the govt must formulate strategy to address future implications
It is no doubt laudable that Bangladesh has met all three of the criteria—Gross National Income (GNI) per capita, Human Assets Index (HAI) and Economic Vulnerability Index (EVI)—for graduating to a developing country from a least developed one ahead of the second assessment of its performance by the UN Committee for Development Policy's (CPD) next year. Bangladesh has performed considerably better in terms of GNI and HAI than it did in 2018, and although its position in the third criterion fell, its score is still well above the required threshold.
While these numbers are a testament to Bangladesh's consistency of performance, it should be remembered that the data was collected from March 2018 to April 2020, which means that the unexpected impact of Covid-19 on the economy has not been registered. If and when Bangladesh does graduate out of LDC status, it must be prepared to tackle the repercussions of LDC graduation, including preferential market access for goods (DFQF facility), preferential treatment for services and service supplies, special treatment regarding obligations and flexibilities under WTO rules, subsidies in the agriculture sector, relief on intellectual property rights and scholarships and other forms of financial support for education and research. The benefits it previously enjoyed from various multinational and donor organisations will also be reduced.
The government must, without delay, assess the implications of a pending LDC graduation in light of the unanticipated shock due to the pandemic and take strategic measures to ensure that the country continues on its development trajectory. It must formulate a comprehensive policy framework addressing the possible challenges that the country is likely to face in the lead up to and following the LDC graduation, engaging with various stakeholders nationally, regionally and internationally. The government has reportedly requested the CPD to extend duty-free export facilities and other benefits for Bangladesh till 2030 and is in talks with international bodies for export duty waivers on its products. It must continue these negotiations and also engage with other important trade and development partners for extended transition periods.