We are extremely happy hearing that the Committee for Development Policy of the United Nations has recommended taking Bangladesh out from the list of the least-developed countries.
Bangladesh met the criteria in all three indexes, first in 2018 and lastly in 2021, to graduate from the LDC category. Now the fact is that Bangladesh, being a developing country, will need to lose a number of facilities reserved for the least-developed countries.
Due to the coronavirus pandemic, Bangladesh gets a two-year extension to be categorised as developing country by 2026. The graduation will brighten the country’s image. Moreover, there will be opportunities of business because of higher credit ratings as well as a huge opportunity of foreign investment. But the graduation will not be a tonic for all problems. There will be risks. Bangladesh will lose duty-free market facilities in some export destinations.
Moreover, the World Trade Organization relaxes policy bindings for the least-developed Bangladesh to provide subsidy in the agriculture sector and to our industries. Bangladesh’s pharmaceutical industries have flourished as a result of the special exemption from duties regarding patent protection for the pharmaceutical products.
We are doubtful that the access to the facilities will be shrunk after the graduation. The WTO Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) gets an extension to 2033 while Bangladesh’s graduation will happen in 2026. Uncertainty looms whether Bangladesh could enjoy the facilities in the interim seven years and beyond.
Bangladesh can lead the LDC forum. How? In this phase, three countries will be graduated from LDC to developing ones. And there are some other LDCs who would soon be graduated to the upper level. Bangladesh, on behalf of the emerging developing countries, could raise voice in the international forums for continuation of some benefits entitled for the LDCs.
This is to be noted that benefits for the LDCs will be expired ‘automatically’ after the graduation. On the other hand, benefits for the developing countries will not be ‘automatic’. To avail the benefits, Bangladesh will need to do more works.
For example, Bangladesh will need to achieve the Generalised System of Preferences or GSP Plus scheme on some exports to the European Union.
To face the challenges, we need to prepare in the next five years. We have to improve working environment, foreign investment ecology, business index, competitiveness and etcetera in case Bangladesh receives no benefits during the post-graduation period.
The upcoming five years will be very challenging period for Bangladesh.
*Selim Raihan is a professor at the department of economics of University of Dhaka.