Economy, next election major challenges for Bangladesh: UN

Bangladesh will face some major challenges related to its economy and the next general election in 2023, the UN said.

These challenges were predicated in the “UN Country Team Results Report Bangladesh 2022” released on Tuesday.

The UNCT report said, “The year 2023 brings major challenges and some opportunities. Against the backdrop of global recovery from the Covid-19 pandemic, the war in Ukraine, competing demands for development and humanitarian assistance, and a worsening climate crisis, Bangladesh will seek to stabilize and strengthen its economy, recover from the devastating floods of 2022, implement the reform programme associated with recent IMF loans, and prepare for a general election, among other things."

As Bangladesh approaches the graduation from Least Developed Country in 2026, the government, with support of UN agencies and other partners, will work on a strategy to facilitate this key milestone in the country’s sustainable development progress.

In light of these priorities for the government, the UN Country Team (UNCT) in Bangladesh will focus its support in several areas.

The report states, “After the Fifth United Nations Conference on the Least Developed Countries (LDC5) in Doha in March 2023, the government will work on formulating its Smooth Transition Strategy for LDC graduation. This process involves close consultations between the government, the private sector, civil society and development partners about necessary changes as international support measures associated with LDCs status are phased out.”

In 2023 the government will be managing an acute cost-of-living crisis that continues to affect affordable food and energy out of reach for millions of people, so, livelihoods support, and food security will be key priorities of the UNCT during the year, it said.

The UNTC will also continue ongoing initiatives to develop capacity of households, connect smallholders to markets to make their livelihoods more sustainable and resilient.

“Efforts will proceed to formalize parts of Bangladesh’s large informal sector, alongside actions to strengthen the public food distribution system, making the social safety net more efficient, and supporting the most vulnerable groups. Concurrently, initiatives to integrate improved nutrition security into the social protection system will continue,” the report said.

The report added, “As part of bringing progress on the Sustainable Development Goals back on track after the global upheavals, the UNCT will continue to support children who lost months of schooling, strengthen the system of blended education in preparation for the next pandemic, and strengthen health systems as part of pandemic prevention.”

While gender equality and preventing gender-based violence will continue to be priorities of the UN Country Team in Bangladesh with a special focus on behavioural change.

The UNCT has resolved to strengthen its climate-related work through a more integrated programmatic approach. Noting that a fragmented and project-based approach to climate action will not enable the UN in Bangladesh to achieve impact at scale, the UN in Bangladesh will explore the establishment of a climate-focused pool fund to enhance strategic coordination across its climate programming.

The government has launched its National Adaptation Plan, published its Nationally Determined Contributions outlining climate actions to cut emissions and adapt to climate impacts and recently adopted the Mujib Climate and Prosperity Plan.

The UNCT will work closely with the government and development partners to support the implementation of these plans.

The year 2023 has started with a deterioration of the situation for the Rohingya refugees in Bangladesh. The Rohingya in Cox’s Bazar have been affected by a funding shortfall that forced a cut in food assistance by 17 per cent and a devastating fire that damaged or destroyed over 2,800 shelters, and affected close to 16,000 people.

Given the high humanitarian needs, under the leadership of the Government of Bangladesh, the humanitarian community will continue to provide support to the refugees and reduce the impact on the host communities that have sheltered them.

The prioritized 2023 Joint Response Plan was launched on 7 March 2023. It seeks around $876 million to respond to the critical needs of Rohingya refugees in Cox’s Bazar and Bhasan Char, as well as to mitigate impacts on the host communities in Ukhiya and Teknaf upazilas.

Considering competing humanitarian needs worldwide, funding the plan is expected to get more difficult. Mobilizing sufficient funds to provide life-saving support will be a key priority for the UNCT, alongside continuing advocacy for the Rohingya refugees’ safe, dignified and voluntary return to Myanmar.

The UNCT, under the leadership of the resident coordinator and in consultation with global and regional UN entities, will support the government in this endeavour. A marker of success will be a Smooth Transition Strategy that is inclusive and enables the benefits of development to reach the most disadvantaged people.

The UNCT will also work with development partners in supporting the private sector’s preparations for compliance with the environmental, labour and human rights standards of major trading partners in order to retain preferential access to the relevant markets.

The year 2022 was challenging for Bangladesh. The economy was tested by the overlapping impacts of the war in Ukraine, surging global energy and food prices, and the lingering effects of the Covid-19 pandemic.

The external shocks—especially the spike in energy and food prices—fueled domestic inflation and weighed on people’s real incomes and economic growth. Buyers from developed countries cancelled orders of readymade garments, growth of remittances by Bangladeshis overseas slowed, and the external balance deteriorated.

For the people of Bangladesh, high inflation remained the biggest concern. After staying below 6 per cent for the past several years, inflation rate increased through the first half of 2022, peaking at 9.5 per cent in August. Fuel prices rose sharply, and gas price surged nearly 200 per cent during the year. The impact on the most vulnerable is a continued cause for concern.

Despite these challenges, the GDP growth rate for 2021-2022 exceeded 7 per cent indicating robust recovery from the Covid-19 pandemic. Major transport infrastructure projects like the metro rail and the Padma bridge were inaugurated and these mega infrastructures will have significant implications for the city of Dhaka and the economy of Bangladesh respectively.

The impact of climate change is an ever-present reality, demonstrated by catastrophic floods, and the country continues to host close to one million Rohingya refugees as the conflict in Myanmar continues for the fifth year.

Despite the challenging environment of 2022, the UN has continued to support the people and the government of Bangladesh to strengthen institutions, policies and implementation of a wide range of initiatives and services

UN resident coordinator in Bangladesh Gwyn Lewis said the United Nations has successfully worked over many years with the people and the government of Bangladesh.

“We look forward to continuing our close partnership and friendship. Renewed efforts are needed to advance and achieve the SDGs by 2030 and to support Bangladesh as it prepares to graduate out of the Least Developed Countries (LDCs) category in 2026,” Gwyn Lewis added.