LDC graduation won’t be easy
Experts talk about challenges countries will face during transitional period
Three South Asian nations -- Bangladesh, Nepal and Bhutan -- that are going to graduate from the status of least developed countries (LDC) would struggle to get cheaper funds during the transitional period due to global challenges and crises, according to experts.
Coordination among bilateral and multilateral lenders is required so that separate funds are not allotted for the same objective, said Debapriya Bhattacharya, distinguished fellow at Centre for Policy Dialogue (CPD).
He said a smooth transition from LDC status is not easy, as concessional loans will not be available for middle-income countries.
Bhattacharya was addressing a webinar on "Multilateral Development Finance: Supporting an Inclusive and Sustainable Recovery in South Asia", organised by CPD yesterday.
Kazi Nabil Ahmed, member of the parliamentary standing committee on foreign ministry, said more money is needed to face challenges, as prices of energy and food increased after the pandemic and due to the Russia-Ukraine war.
According to him, multilateral and bilateral organisations should stand beside developing countries, providing concessional loans during the transitional period.
A smooth transition from LDC status is not easy, as concessional loans will not be available for middle-income countries.
Fahmida Khatun, executive director of CPD, moderated the webinar and said multilateral development financing has been stretched across an ever-expanding list of priorities, ranging from humanitarian-crisis response to ensuring global and regional public goods.
Sachin Chaturvedi, director general at Research and Information System for Developing Countries, a New Delhi-based policy research institute, gave a presentation on the report "Multilateral Development Finance 2022".
The report suggested developing a holistic mechanism so that multilateral systems can meet new global development challenges and provide sustainable and predictable funding.
Mustafizur Rahman, distinguished fellow at CPD, said cost of funding has increased, as the country is going to graduate from LDC.
He said developing countries will struggle to receive funds for development after graduation.
Olivier Cattaneo, head of the policy analysis and strategy unit at the Organization for Economic Co-operation and Development, gave a presentation and said more funding helps to scale up multilateral development financing, but present risks in the whole system still remain.
Nisha Arunatilake, research fellow at Institute of Policy Studies, Sri Lanka, and Paras Kharel, executive director, South Asia Watch on Trade, Economics & Environment, Nepal, addressed the webinar.