Steps needed to increase competition capacity

Since 1975, Bangladesh is in the list of LDCs, but the country is now going to inclusion in the list of developing countries. The United Nations’ Economic and Social Council (ECOSOC) will finalize the issue of Bangladesh’s graduation from the LDCs to the list of developing countries in March this year.

To become a developing nation by 2021, Bangladesh has to comply with the three criteria. Bangladesh has already complied with the criteria to become a developing country. According to the UN’s graduation thresholds, gross national income (GNI) per capita of a country has to be $1,242 or above. Bangladesh’s GNI per capita rose to $1,610 at the end of fiscal 2016-17. Secondly, human assets index of a country has to score 66 or above. Bangladesh’s score in the human assets index stood at 70. Thirdly, economic vulnerability index should be below 30, but Bangladesh has below 26.

The United Nations has divided its member states into three categories-LDCs, Developing and Development. Bangladesh is in the LDCs list since 1975. To grade from the LDCs to the list of developing countries, the GNI per capita is the prime criteria. Two other indexes--human assets and economic vulnerability–are also important. Bangladesh has been promoted to the list of lower-middle income countries from low-income countries in July of 2015. In this context, World Bank Dhaka office’s lead economist Dr. Zahid Hossain said, Bangladesh will get the first recognition of its graduation from the LDCs to the list of developing countries in March this year. In 2024, the United Nations General Assembly will approve the graduation. But after graduation to a developing country, Bangladesh will have to face some difficult realities. New challenges will come. Bangladesh will lose some facilities in foreign trade. Low interest rate and some flexible conditions for foreign loans will also be limited. Bangladesh has to face these challenges with its capability. For which the economists have advised to take preparations early.

According to the World Trade Organization (WTO) rules, the LDCs are getting some benefits from the developed countries. For example, tariff and quota-free market facilities, GSP facilities, etc. But Bangladesh will not be able to get these benefits after being included in the list of developing countries. That's why we have to be ready to face the situation.

After graduation, Bangladesh will not have any duty-free access to the developed countries for exporting its products. For this reason, preparations should be taken to take advantages from regional organizations like BIMSTEC and BBIN. It is very important to increase competitiveness further as the competition will increase after abolishing duty-free access.

A research report of the Center for Policy Dialogue (CPD), a non-governmental organization, said that due to giving extra tariff after entering the list of developing countries, Bangladesh could lose $ 2.7 billion in exports. So, Bangladesh has to take preparations to deal with the situation from now. In this context, the commerce minister said, this will be a pressure on our export. This is true, but the country’s entrepreneurs have the ability to deal with it. We expect that the government will take appropriate measures, and the concerned people will work with the highest priority in this regard.

risingbd/Dhaka/Jan 26, 2018 / Ali Nowsher/Mukul