Income inequality and poverty rate have gone up side by side a slump in production and external trades, induced by the Covid-19 pandemic.The pandemic has also put negative impacts on food, nutrition, education and other human asset development indexes.
However, Debapriya Bhattacharya, distinguished fellow of Centre for Policy Dialogue (CPD), thinks the three indexes essential for Bangladesh's graduation from the least developed country (LDC) status will not be much affected by Covid-19.
Reviewing the latest data, he said Bangladesh in 2021 will be ahead in the three indexes for the LDC graduation in the evaluation of the Committee for Development Policy (CDP) of the United Nations Economic and Social Council.
The government has also made a positive decision in moving out from the LDC group. Besides, there will not be much scope for staying in the LDC after becoming eligible for the developing country status, he said at an event titled "Conversation with Dr Debapriya Bhattacharya on Bangladesh Bangladesh's Graduation from the LDC Group" on Thursday.
In this situation, Debapriya urged the government to formulate a strong action plan to deal with the possible impacts the country will face after its LDC graduation.
In 2018, Bangladesh for the first time fulfilled all the three criteria for the LDC graduation.
Before the coronavirus hit, Bangladesh had successfully been advancing on three indexes – per capita gross national income, human assets and economic vulnerability to external shocks, he pointed out.
Production and exports nosedived owing to the Covid-19 effects. Under these circumstances, if Bangladesh moves out of the LDC status, it will lose special benefits on exports. The subsidies in the agriculture sector and relief on the intellectual property rights will also go for the country, he said.
Besides, this will hurt some industries, especially the pharmaceutical industry. Apart from that, the country will no longer enjoy benefits from various multinational organisations, he said.
The issue of shifting from a low-income country to a low-middle-income one should also be taken into account when formulating a policy for the LDC graduation, Debapriya added.
The conditions for availing foreign loans will become stricter when the country promotes to the lower-middle-income group. The amount of grants also decreases, he said.
In Bangladesh, 2,260 people tested positive for Covid-19 after testing 12,274 people per 10 lakh. Some 33 out of every 10 lakh people died from the deadly virus, he said adding that the death toll from Covid-19 in Bangladesh is much higher than in neighboring Nepal and Bhutan, he informed.
There is no chance to say that the pandemic impacts on the country's health and economy are less. However, the government has claimed that per capita gross national income has increased by more than 5% at this time. The skeptics have also said the income has increased from 1% to 3%.
In the CDP's assessment, Bangladesh's achievement in terms of national income will be more than what it requires, he commented.
The economist said necessary information to assess the progress of indexes other than the per capita gross national income index has not been published yet.
However, the rate of school-going girls has decreased and the prevalence of violence against women and child marriage has increased. Gender inequality in education at the secondary level might also go up, Debapriya said.
Till now, there has been no increase in infant or maternal mortality rate. But, malnutrition has increased and food availability has decreased. People whose incomes reduced because of the shutdown had to reduce food intake.
He thinks that it will take one more year to get information on all these sectors.
Bangladesh will remain on a positive position in all three indexes, even though Covid-19 hits various indexes of human assets. Even if the virus impact is calculated, the country will be on the way to graduating from the LDC status, he added.
Debapriya further said Bangladesh and Bhutan are on the way to moving out from the LDC despite having Covid-19 impacts. Myanmar and Laos, like Bangladesh, are working on achieving the target.
Nepal has lagged far behind due to its overdependence only on tourism. The situation in Angola and Timor-Leste – which depend on oil exports, has also deteriorated.
Talking about delaying the LDC graduation, he said the Maldives had earlier delayed its graduation because of the tsunami. Three months ago, the United Nations Economic and Social Council advised the CDP to conduct a study to assess the Covid-19 impacts.
The final decision will be taken based on the survey results, he added.
A person has been assigned to review the situation in each country, Debapriya said adding that a letter has been sent to the governments to find out which country wants to delay its graduation owing to coronavirus.
In the 50 years of independence, the Bangladesh government has taken a positive political decision to move out from the LDC status.
Urging that this decision be announced as soon as possible based on data, he said the more time it takes to inform the decision, the lesser time it will get for the preparation for the graduation.
Debapriya suggested a quick and realistic two-pronged action plan to move out from the LDC status.
A concept and a supportive programme needs to be added in favour of the least developed countries in the fifth UN conference on LDCs to be held in Doha early 2022, he said.
He also called for formulating a strategic paper and an international memorandum of understanding on what kind of foreign aid should continue in the countries during the transition period.
Debapriya said there is an opportunity to continue assistance from rich countries for several years in many other fields beside trade, agriculture and intellectual property rights.
A new action plan needs to be drawn up considering the Covid-19 issue, he also said.
He suggested that countries waiting for the LDC graduation should also be offered free Covid-19 vaccines if supplies for the least developed countries are ensured.
Responding to a question, he said the countries on the way to come out from the LDCs need to raise their voices collectively to ensure sustainable development. And in this case, Bangladesh has to lead from the front.
The economist added that the government will require a strategic paper during the country's transition period to overcome the coronavirus impacts.
Measures to overcome Covid-19 impacts and specify requirements for LDC graduation need to be given more importance in documents such as the fifth Five-Year Plan and the Perspective Plan alongside the Global Development Programme.
Growth and foreign aid of the countries that came out of the LDC status has decreased but foreign direct investment and revenue generation increased.
"If we do not create an environment conducive to increasing revenue and foreign direct investment, the graduation target will not be met," he said.
The government needs to reform the existing structure to work for the LDC graduation.
He also suggested the inclusion of representatives of the private sector in various structures of the government to determine the next course of action.