Opportunities of LDC graduation for Bangladesh
Estiaque Bari, Former Senior Research Associate, CPD
It is now a decade since I first heard the term Least Developed Countries (LDCs). But, only since last year, the term is really vibrant in national media. It was expected as Bangladesh is likely to meet two out of three LDC graduation thresholds in 2018. Three indicators are income criteria measured by a country’s gross national income, human assets index and economic vulnerability index. To be specific, Bangladesh is projected to meet other two indicators while come close to meet income criteria.
It is definitely a leap for Bangladesh. I am proud too. It shows our combined effort has helped the country perform better than other countries, not only in economic but also in socio-economic indicators. But there are pessimistic friends around us, one of them who is a businessman by profession, once asked me, how this LDC graduation is going to bring positive change to him or marginal section of people. Just because my friend is a pessimist, I cannot deny his/her contribution in the development process while not disregard his question either.
I tried to share my views with that friend! I started with positive facts, then introduced opportunities. See, my friend, “first of all, it is a global recognition that Bangladesh as a nation has made good economic and social progress – our efforts being appreciated. Second, though caveats are there, it’s a signal to investors that our economy is performing. Thus, we can expect an increase in foreign direct investment. Expected increase in investment if translated into better manufacturing sector may create more job opportunities for people”.
Others are apparently costs of graduation that I have described to my friend as opportunities. “This is like, once we graduate from school, despite admire about golden years of life, never go back, in anticipation greater opportunities. Though not comparable, similarly, with the graduation, if not negotiated further or alternatively, Bangladesh will be no more eligible to receive the export preferences at least from forty countries. Business rules will be more stringent, compliance requirement would be higher – but I see opportunities lie there – our businessmen will be more innovative, more dynamic to maintain their profit margin, subsequently businesses will be more capable, competitive and, hope, will generate more employment”. After a long time, my friend smiled, as he is aware of his enthusiasm and caliber as a businessman!
However, the list of costs, Oh! Sorry, opportunities do not end here. Once graduated, Bangladesh will no longer be eligible for aid for trade, climate fund for LDCs, some technological assistants and few others facilities. Students from Bangladesh will not get any concession or scholarship just because they are applying from an LDC. All these will happen at a time when project financing will be more costly. In simple words, Bangladesh will not get foreign aid or concessional finance from development partners, rather it has to propel its economic journey on the basis of non-concessional type loanable funds. Here, I see the opportunity to improve service delivery by the government in search of mobilised funds through domestic revenue. Now! My friend has shown some reaction “don’t you (I) becoming too foolishly optimistic by calling these costs as opportunities?”
I smiled and replied, whether I am thinking like a fool or cool, depends on how our policymakers prepare themselves within next six to nine years of LDC graduation process. LDC graduation may push policymakers to think alternatively, sharpen their ideas, negotiation skills and execute plans in an efficient manner. At the same time, if efficiency does not take place, the government of Bangladesh will face more cost to manage and complete a development project in future than now. Therefore, I expect, thrive from the government to bring efficiency in project negotiation, management and its implementation. Grossly, my point is that it’s an opportunity for Bangladesh to push for next frontier – as failing apart from that is not desired when a branch of youth are getting ready to lead future Bangladesh, may be silent as it has always been.
My friend still thinks I am very optimistic. I do not mind only to be very optimistic rather being a fool!