Anisul Islam Noor :
Though a UN panel has announced Bangladesh’s eligibility to graduate to a developing country category, it needs to overcome a number of domestic challenges, including unemployment, quality education, cent percent enrolment in primary schools, poor health service and corruption to finally become a developing one, said economists.
The Committee for Development Policy, a UN panel, on March 16 announced Bangladesh’s eligibility for the developing country category as it has met the three prerequisite criteria in terms of National Income Per Capita, Human Assets Index and Economic Vulnerability Index.
Talking to The New Nation, an adviser of the former caretaker government AB Mirza Azizul Islam said that as a least developed country (LDC), Bangladesh enjoys duty-free access to the European Union and some other countries
Bangladesh’s export sector will face tougher competition in the global market after losing duty-free market access and preferential trade benefits when it graduates from LDC status and officially joins the ranks of developing countries, he said.
Mirza Aziz said Bangladesh has to focus to overcome some challenges like increase of private investment, ensure proper development of human resources and reduction of poverty.
Despite progress in different sectors, 22 to 23 per cent people are living below internationally recognized poverty level, so poverty reduction initiatives should be given priority, he said.
Mirza Aziz said, quality education and enrolment of 100 per cent in the primary school should be ensured.
Bangladesh’s position at 177th in the World Bank’s business perform index and loan defaulter is a regular matter here that tendency should be removed to be a developing category country, he said.
Former governor of Bangladesh Bank Dr Salehuddin Ahmed said, the country gets the recognition based on some index where institutional transparency, right of expression, accountability and rules of law are not counted.
Without proper exercise of democracy in every decision making level and making discrimination in development Bangladesh cannot be achieved as developing country, he said.
Graduate people are not getting their desire jobs that called indirect unemployment, Dr Salehuddin said.
Professor Anu Muhammad said, “Bangladesh achieved it after 47 years where other south Asian countries like Maldives, Bhutan, even Nepal achieved ahead of us.”
Talking with The New Nation he said, environmental pollution, corruption, capital flight, unemployment, discrimination in development, stability and quality of health service as well as education is not counted to announce the status.
Bangladesh primarily achieve it where Myanmar and Laos are in similar level in this region. The country will have to pass two more reviews in 2021 and 2024 to get rid of the least developed country (LDC) tag. Upon its promotion, Bangladesh will get three more years’ grace period after which it will lose the trade facilities it enjoys as an LDC, he said.
After graduation, Bangladeshi exporters will have to pay an additional 6.7 per cent tariff, making competition against rivals, some of whom enjoy benefits under EU GSP Plus and preferential trade agreements, Professor Anu Muhammad opined.
Probable new tariffs for EU, non-EU, and Canada are 8.7 per cent, 3.9 per cent, and 7.3 per cent, respectively. The United Nations Conference on Trade and Development estimated that Bangladesh may face an export decline between 5.5 per cent and 7.5 per cent, he said.
“Unless Bangladesh manages to renegotiate through bilateral agreements or as part of regional trade arrangements, it will face MFN (most favoured nation) tariff rates following the graduation or reduced preferential margins under standard GSP scheme in EU market,” said Mustafizur Rahman, distinguished fellow of Centre for Policy Dialogue (CPD).
Preference erosion will likely have adverse implications for export competitiveness, and export earnings and consequently, for GDP, balance of payments, employment and poverty alleviation, the economist added.
Once Bangladesh loses duty-free market access, it will leave the country with different challenges regarding the tariff, Mustafiz warned.
He said Bangladesh would have to explore windows of opportunities through smart negotiations and engage proactively with international organizations for preferential treatment.
