BD on the way to leave LDC group
Bangladesh is going to compete in the second review of a UN panel next year. Dhaka has already sent the latest status report on the three eligibility criteria to the United Nation's Committee for Development Policy (CDP). The CDP makes assessment for the graduation on the basis of the indices: Gross National Income (GNI) per capita, Human Assets Index (HAI) and Economic Vulnerability Index (EVI). Hopefully, in all the three criteria, Bangladesh is well ahead of the minimum requirement. Reportedly, this time Bangladesh has performed better in two categories--GNI and HAI--than that in 2018.
Bangladesh was included in the LDC list in 1975. In 2015, it crossed the threshold of the World Bank-defined lower middle-income country and became eligible for graduation in 2018. The CDP will scrutinise Bangladesh's progress towards the graduation for the second time at its triennial review in February next year. The country's official graduation from the LDC category will take place after a three-year transition period. If the country maintains its position in all the three categories for the next three years, it will be recognised as a developing country in the UN General Assembly in 2024.
However, a country must exceed the threshold on two of the three criteria in two consecutive triennial reviews to be considered for graduation. According to the UN's graduation threshold, the GNI per capita of a country has to be minimum $1,230, while Bangladesh's GNI per capita is now $1,640. In terms of the HAI, a country must have a score of minimum 66. Bangladesh's score in this criterion is 75.3. In the EVI criterion, a country's score has to be below 32, while Bangladesh's score is 27.3.
Even though Bangladesh will have privileges after being promoted it will face some financial losses regarding export. If Bangladesh gets out of the LDC bloc in 2024, it will be given a three-year transition period before it loses duty-free and quota-free market access to the European Union. Moreover, the benefits of technical cooperation and other forms of assistance such as fund support for scholarship, fellowship, participation in special training as well as research will be withdrawn. The scope for credit accessibility will also be reduced. As a result, initially Bangladesh would lose $7 billion in export earnings every year after the end of the transition period and by 2031, the amount would be $13 billion.
We believe that Bangladesh will get the recommendations in the second review. To tackle the loss in export, Bangladesh should talk with international bodies for export duty waivers on its products after the end of transition period so that steady economic growth is ensured.