Before graduating from the Least Developed Country (LDC) status, Bangladesh needs to build capacity as a production dependent and skills dependent country.
Work in this regard should be completed within the next five years in each of the export oriented sectors, said the economists at a webinar titled "Transition to Developing Countries: Prime Minister's Great Achievement in Development Progress," organised by the Canadian University of Bangladesh on Saturday.
Economists said before finally leaving the Least Developed Country category in 2026, Bangladesh needs to focus on four issues – getting access to markets, managing changes in relations between different countries, making necessary changes to domestic policies, and eliminating the laxity we have in labour and the environment.
At the event, Dr Mustafizur Rahman, distinguished fellow of the Center for Policy Dialogue, said, "We have five years to prepare for a smooth and sustainable graduation. At this point, we need to build capacity as a production dependent and skills dependent country."
He said, "We need to work extensively on getting access to markets, because when we lose duty-free, and quota-free facilities, Vietnam will get these facilities from China, Japan, Korea, and Australia."
"Earlier we took advantage unilaterally, but now if we want benefits from a country, you have to offer it benefits too," he added.
Mirza Azizul Islam, a former advisor to the caretaker government, said, "We need to increase bilateral and regional trade agreements in such a way that the loss of duty-free facility will not create problems."
Referring to the increased cost of borrowing from the Asian Development Bank (ADB) and the World Bank after being recognised as a developing country, he said, "We are already in ADB and the World Bank's Blended Financing. So, I do not think it will hurt us too much."
He further said, "It is difficult to anticipate an increase in foreign investment as Bangladesh's position on the Ease of Doing Business Index was not very satisfactory. The private sector should also be cautious of low interest rate foreign loans."
Ahsan H Mansur, executive director of the Policy Research Institute, said, "In case of our trade, we need to think right now about how to get access to market. We do not have a preferential trade agreement with anyone. We have closed the possibility of it ourselves, because Bangladesh is the most protected market."
"We have about 27% average market protection level, which is 9% in India and China and 7.4% in ASEAN (Association of Southeast Asian Nations) countries. Then why would any other country sign a preferential trade agreement with us," said Ahsan H Mansur.
He further said, "We do not have to do business with facilities. If China can become known around the world as a manufacturing hub without any benefits, why cannot we? We have to prepare for that too."