Bangladesh is all set to leave the group of least developed countries (LDCs) and get official recognition as a developing country in 2026, as it has met all the three eligibility criteria for LDC graduation for the second time.
Prime Minister Sheikh Hasina described this achievement during the Father of the Nation Bangabandhu Sheikh Mujibur Rahman's birth centenary and on the eve the golden jubilee of the country's independence as "great and glorious". She also said her government is ready to do whatever it takes to face the challenges likely to be posed by the LDC graduation.
"It is a matter of great joy and pride for the entire nation," she said while addressing a virtual press conference from Ganobhaban on Saturday.
Crediting all the people of the country for this feat, the premier also thanked the development partners.
She dedicated this achievement to the new generation of the country and said they will build a developed and prosperous Bangladesh.
"After its graduation from the LDC status, Bangladesh will get its place as a dignified country at the global stage.
"This is a special step for us to achieve the Sustainable Development Goals (SDGs) by 2030, to be an upper middle-income country by 2031 and a developed one by 2041," she added.
The UN Committee for Development Policy (CDP) made final recommendations for Bangladesh's transition to the status of a developing country after reviewing the country's position in three indices –per capita income, human resource development, and economic and environmental vulnerability.
Finance Minister AHM Mustafa Kamal handed over the certificate of the CDP recommendations to the prime minister at Ganobhaban on Saturday.
Earlier in 2018, Bangladesh met these three criteria for the first time.
The United Nations Economic and Social Council (Ecosoc) will convene a meeting next June to approve the CDP recommendations and send it to the UN General Assembly for approval.
If Bangladesh was interested, then it would be recognised as a developing country in the UN General Assembly in 2024. However, due to economic shocks induced by the coronavirus pandemic, Bangladesh has already expressed the desire to become a developing country two years later in 2026.
Bangladesh will lose duty-free export facilities to various countries immediately after its LDC graduation in 2026. However, the country will continue to enjoy the generalised system of preferences (GSP) in some of its major markets – the European Union, the United Kingdom and Turkey – for an additional three-year period.
According to a report by the World Trade Organisation (WTO), Bangladesh's exports could fall by about $5.37 billion due to increased tariffs after its transition to the status of developing countries.
However, the organization thinks that Bangladesh's exports to the United States, Australia and the Middle East may increase.
According to the Planning Commission, the amount of losses in export earnings could be as high as $7 billion following the LDC graduation, which may increase to $13 billion by 2031. The facilities that the pharmaceutical industry of Bangladesh is getting under The Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) are likely to be cancelled as well.
Bangladesh is preparing to sign free trade agreements (FTAs) with various countries to offset the export losses. In addition, it has been emphasising exploration of new markets and the export of new products.
Through this, it will be possible to increase the country's exports by at least $2 billion, hopes Commerce Secretary Md Jafar Uddin.
On the other hand, LDCs, including Bangladesh, will raise the issue at the next WTO Ministerial Conference to make sure that the existing trade facilities remain in place for 12 years even after LDC graduation.
Bangladesh, however, fears that the number of grants and low-interest loans that it gets from various international organisations as a least developed country will also decrease following its transition to the status of a developing country.
All the countries that graduated from the LDC group to that of developing countries earlier saw their international grants getting reduced following the transition.
However, due to an improved image of the country post-LDC graduation, foreign direct investment in those countries went up, which the government hopes will happen in the case of Bangladesh too.
According to a concept paper prepared by the Cabinet Division, the main challenge after the transition from the LDC status is the "middle-income trap".
All the countries that have crossed over from LDCs are still middle-income countries, the paper mentions, adding that pragmatic policies need to be adopted to keep up with the trend of development.
"Strategies need to be adopted to create diversification of export products by attracting local and foreign investment. For this, we have to play a key role in building efficient, accountable and corruption free government institutions."
Prime Minister Sheikh Hasina thinks Bangladesh will move forward facing all kinds of challenges. "We are already preparing to meet the challenges of LDC graduation. We are ready to do whatever it takes to meet the challenge."
"We are going to be recognised as a developing country after doing far better than the standards set in all three indices. We need to consolidate and sustain this achievement. We have to hold on to it and we can do it. Bangladesh is moving forward and will move forward."
The premier further added that various strategies aimed at sustainable transition have been included in the Eighth Five-Year Plan.
Several mega projects including the Padma Bridge, Metro Rail, Elevated Expressway, Karnaphuli Tunnel, Rooppur Nuclear Power Plant, and Maheshkhali-Matarbari Integrated Development Project are being implemented, she mentioned, adding some of these will be launched this year or early next year.
"Constructions of 100 special economic zones, more than two dozen high-tech parks and IT villages are underway across the country. If these are implemented, it will give more impetus to the economy including job creation," the prime minister hoped.
In 1971, the United Nations made a list of LDCs. At that time, 25 countries were on the list.
Bangladesh was included in the list of LDCs in 1975. So far, six countries have achieved the developing country status graduating from the LDC group. At present there are 46 LDCs.
Recalling the time of Bangladesh's inclusion as an LDC, the Prime Minister said Father of the Nation Bangabandhu Sheikh Mujibur Rahman rescued war-torn Bangladesh out of the rubble in just three and a half years and took it to the group of LDCs. During the regime of Bangabandhu, the country's GDP growth rate exceeded 7% and Bangladesh entered the highway of development, she added.
She went on to say the Bangladesh Awami League – formed by Bangabandhu – raised the country to the status of a developing country in the 50th anniversary of the country's independence. "Today's achievement – the transition from a least developed country to a developing one – is the outcome of our relentless planning, hard work and efforts for over the last 12 years."
"The present Bangladesh and the Bangladesh from a decade ago are not the same. Today's country is a changed Bangladesh. It is third in rice production in the world. The country is also at the top in fish, meat and vegetable production.
"The people of the country have done all this. We in the government have only created opportunities," said the Prime Minister.
Replying to a question regarding the stability in the life and livelihood of the people of Bangladesh in the coronavirus situation, the premier said, "I have no magic. This is actually the magic of Bangladesh."
"People have responded to the way the government has called on them to deal with the coronavirus. We have announced incentives in various sectors up to the village so that no one is harmed by the economic impact. We have also taken initiatives to buy vaccines by paying money in advance.
"I have a sense of duty and responsibility to be by the side of the people," she concluded.