From Ldc To Developing Country
Challenges ahead of Bangladesh
Father of the Nation Bangabandhu Sheikh Mujibur Rahman's birthday came in with a joyous declaration for the citizens of Bangladesh this year as it was declared that for the first time, Bangladesh has qualified in all three criteria set by the UN for graduation from 'Least Developed Country' (LDC) to 'Developing Country' status. Hence, the UN declared the country is eligible for graduation from LDC in 2024. For around a decade, all can feel that development has been given a lot of emphasis as the government under the valiant leadership of Prime Minister Sheikh Hasina has initiated many development projects along with renewed focus on human assets development. We, as general people, might not sometimes visualise the broader picture but truly we are racing to reach our goals of becoming a developing country by 2021 and a developed country by 2041.
Only within four years of independence in 1975, Bangladesh was included in LDC list under the valiant leadership of Bangabandhu, and it took 43 years to become eligible to graduate from that. The achievement is mostly due to the courageous effort of Bangabandhu's daughter Sheikh Hasina and her party Awami League, who took the challenges of reaching Sustainable Development Goals (SDGs) and diligently worked to achieve those goals during the last decade as they have taken many mega projects like Padma Bridge with own funding upholding the motivation of liberation war. This declaration is indeed a strong recognition of our journey towards that goal. And the government must continue this courageous move.
The Committee for Development Policy (CDP), a United Nations panel, made an announcement on the country's eligibility at a meeting at the UN headquarters in New York. Later, Roland Mollerus, Chief of Secretariat of the Committee for Development Policy (CDP), handed over Ambassador Masud Bin Momen an official letter conveying this announcement. CDP decides the graduation of a country from the LDC category on the basis of three criteria which are Per Capita GNI, Human Asset Index (HAI) and Economic Vulnerability Index (EVI).
Gross National Income (GNI) is a measurement of a country's income. It includes all the income earned by a country's residents and businesses, including those earned abroad. GNI per capita is a measurement of income divided by the number of people in the country. Bangladesh's GNI per capita is 1272 USD against the UN's graduation threshold of 1230 USD, which confirms Bangladesh's eligibility in this particular criterion. The second criterion is Human Asset index (HAI) -- on which Bangladesh worked a lot and still huge improvement scope remains. It refers to an indicator, based on combined improvement in nutrition, health, adult literacy and secondary school enrolment rate. It actually indicates the quality of life as well as the competency of the human assets. A country must have a score of 66 or above while Bangladesh's score is now 72.8, well above the set threshold. The last criterion Economic Vulnerability Index (EVI) is actually a combination of eight different indicators -- population size, remoteness, merchandise export concentration, share of agriculture, forestry and fisheries in gross domestic product, homelessness owing to natural disasters, instability of agricultural production, instability of goods and services exports and the share of population living in low elevated coastal zone. This actually measures how exposed the economy of a country is to the natural and human threats and its capacity to face those challenges. In EVI, Bangladesh scored 25 while it needs to be 32 or below, depicting the improving performance of our country against natural and trade related distress.
The CDP will review Bangladesh's progress in 2021, and the country's official graduation from the LDC category will take place after another three-year transition period in 2024. Maintaining its position in all the three categories for the next six years will eventually lead towards graduating from the LDC bloc. Encouragingly, Bangladesh is the only country to meet all the three criteria at the same time for becoming eligible to graduate from the LDC bloc. The graduation process has just begun through entering eligible list and now progress on these three criteria has to be sustained. Graduation from LDC will open many doors for Bangladesh while generating quite a few challenges as well. Overcoming these challenges is most critical for a smooth graduation process.
Developing country status will help to brand Bangladesh with higher willingness of investors to invest in Bangladesh due to our strength in certain economic areas compared to other LDCs. Bangladesh's credit worthiness reflected through better credit rating will create new opportunities of higher commercial loans from the international market at a competitive interest rate and we will be able to use that at our own discretion. Both the public and private sector will be able to generate capital from the global financial market. Several impacts will be visible through the cost of development finance and higher debt liabilities due to the termination of access to concessional finance for LDCs. Over the years, we transformed itself from aid-dependent to a trade-dependent country and we need to sustain that. The interest rate for all sorts of loans will rise significantly. Simultaneously loan repayment period will be shortened and the grace period will be declined or removed. Moreover, Bangladesh's export will face serious challenges as it might shrink to some extent after we become 'developing country' with loss of the facilities in export that we enjoy now as LDC. We are benefitting from different duty based facilities like duty free access to the European market. Such facilities might be withdrawn along with new conditions added for the export market. We are frequently receiving foreign funds for NGOs but it is certain that such funding will be reduced.
After the graduation in 2024, there will be a grace period of another 3 years when Bangladesh can enjoy all LDC-specific benefits. So, there are approximately 10 years till 2027 to prepare for facing the known challenges. Fighting these challenges will require improvement of overall economic capability through economic diversification, technological development, human resource development and enhanced economic performance. It will be required to improve export competitiveness with diversifying both markets and products for export. Bangladesh must be more active at the regional and sub-regional initiatives for better advantageous partnerships. We must also act active at the global forums to grab any opportunity. To receive the 'developing country' status, Bangladesh must maintain its performance for the next six years on the indices to be evaluated and lots of challenges are inbound to that. The 11th general election is knocking on the door. Our current government, which is secular and in support of liberation war has already been in power for two consecutive terms. It is unfortunate for the Bangladeshis that, there is no strong opposition which upholds the idea of secularism and liberation war. The shifting of power hence will prevent our growth on these development indices as any party which is not secular and disrespectful to national sovereignty cannot continue with these developments. For an example: women empowerment may be seriously hampered contributing in failure to advance in Human Asset Index (HAI). But we cannot deny that an anti-government sentiment is existent now as several parties are trying to bring in focus on the 'autocratic' nature of the government as they are in power for a long time and the non-secular parties are adding fuel to that perception. If the ruling party Awami League comes in power again in the next national poll, then they will face severe challenges. Risk of extremism and terrorist activities can be anticipated to a much higher extent as the non-secular entities will try to create havoc. This up-gradation will create difference between the rich and the poor in the society. So, the government needs to be sharp on allocating national budgets to address that difference and to ensure the social security and financial standing of the low income group so that the extremists cannot capitalise on that.
Moreover, the government will need to declare and act on 'zero tolerance policy' against corruption -- corruption at government offices, corruption in financial sector, corruption inside law enforcement agencies etc. They also need to establish complete democratic practices and rule of law as these will help the government to earn the trust of the mass -- which is very necessary to create a development partnership between the government and the people. This process must start right now if we want to overcome the challenges of 2021 and 2024.
We are proud that Bangladesh has been considered eligible for graduating from LDC to developing country, but we must be aware of the upcoming challenges also. We expect the government will consider all aspects to overcome the challenges ahead, and act upon that. We hope Bangladesh will excel in the 2021 and 2024 evaluation to become a developing country so that we can keep our heads high before the world.
The writer is Chief Editor at Mohammadi News Agency (MNA) and Vice-Chairman, Democracy Research Centre (DRC)