Home ›› 02 Jan 2022 ›› Editorial
The United Nations General Assembly (UNGA) adopted the resolution A/RES/76/8 for Bangladesh's graduation from LDC to a developing country status on November 24, 2021, during the 40th plenary meeting of its 76th session based on the recommendation of the Committee for Development Policy (CDP). The country was included as an LDC in 1975 by the United Nations and received the first nod for upgrading in 2018. During the next three years, Bangladesh managed to maintain satisfactory performance in all the three criteria and thus would officially gain the status of a developing country in 2026 after five years, instead of three years in consolidating for ultimate elevation. Thus, the next four years are vital for Bangladesh in this graduation episode in attaining a benchmark in a few criteria related to productivity, global competitiveness, marketing, and skills formation in meeting the emerging requirement of up-gradation and post-LDCs graduation challenges. Bangladesh is poised above the benchmark in all three criteria of graduation: per capita gross national income [GNI], the human asset Index [HAI], and the environmental vulnerability index (EVI). The two criteria HAI and EVI are self-supporting and indeed augment GNI in the process. EVI captures the resilience of the structural vulnerability to exogenous economic and environmental shocks. Bangladesh with a per capita income is well above the threshold level of per capita of $ 1,222 but marginally meets the requirement of HAI and EVI. The country's score stood at 75.4 points in the HAI, a bit above the requirement of 66. Bangladesh's score in EVI in the vicinity of 27 is also below 32.
This excitement needs to be addressed with a definite work plan and policy support on the domestic front to face future multifarious challenges. The efforts also need to be backed by international cooperation through deft diplomacy. There are challenges both on the economic and environmental fronts such as high export concentration, dependence on external finance predominantly on the migrant remittances, exposure to the effects of climate change in the deltaic region, and heightened frequency of natural disasters. The gaps in skill formation, infrastructures bottlenecks, and rationalization of tariff structure need to be addressed during these four years to circumvent the post-LDC graduation challenges. The multiple waves of the Covid-19 pandemic could derail the smooth track of attainment in both HAI and EVI. HAI is a composite index of education and health and with a population of 170 million, human resource management is a challenge in this pandemic aura. Trade shocks constitute one-fourth and merchandise export concentration with weights of one-sixteenth measures the vulnerability. The country in a few years loses all the privileges as an LCD and should be prepared to cope with headwinds in this arduous journey. Indeed, we would lose many facilities in trade concessions and intellectual patent rights mainly in the pharmaceutical sectors. The withdrawal of existing GSP facilities after LDC graduation may have an adverse impact on the export earnings unless certain measures are not initiated both on the domestic front and international support with major trade partners with whom the country enjoys a historical trade surplus. The country should aggressively pursue strategies to promote regional trade and reconfigure bilateral trade through preferential or free trade area agreements with symmetry in the trade balance. We may not receive concessionary finance from the climate fund after graduation. Again after graduation, Global Alliance for Vaccines and Immunization, GAVI Alliance helping LDCs in immunization with donor support may not be easy as we are now being helped by many countries with Covid-19 immunization drive.
The structural transformation of the economy in terms of relative sectoral contribution of agriculture and manufacturing is another requirement. Indeed, there are spectacular changes in weights of different sectors in GDP contribution during the past fifty years. The proposed Industrial Policy 2021 envisages manufacturing sector contribution to 40 per cent of GDP but the urgency lies in the efficiency and product diversification and inclusion of new industries such as automobiles in the ambit. The stakeholders in the industrial sector at a virtual participatory consultation workshop suggested the incorporation of an academic-industry interface for skilled human resources development in improving efficiency to reap the benefits of the fourth industrial revolution. The forward and backward linkage in the manufacturing sectors needs to be engineered and harnessed for the complementary role of small and medium industries in generating employment and overall productivity growth. The interests of workers and entrepreneurial development will be given the utmost importance in formulating the new national industrial policy. There is a shortage of skilled workers in the industrial sector. The new policy will stress the need for training.
The education sector, especially tertiary education, can play a crucial role in this graduation episode through human capital formation. Unfortunately, Bangladesh hires foreign nationals for management jobs from India, Pakistan, Nepal, Sri Lanka, and the Philippines. Between January 1 and November 29, 2021, the Department of Immigration and Passport gave an extension to employment visas for 7,822 foreign nationals. The country needs an extensive database on foreigners both documented and undocumented to assess the required skill gap in designing an appropriate policy in both tertiary and vocational education sectors for gainful employment of natives that could save hard-earned foreign currency to the tune of over 6 billion.
The transparency and sanctity of the political and economic manifesto during the next four years should be designed in a manner that ultimately translates into an enhanced influence in regional and international forums through trust and civility. Graduation typically constitutes an exciting moment of national pride, which allows reaffirmation and strengthening of the country’s long-term development vision. I quote the optimism in the statement of Bangladesh Prime Minister Sheikh Hasina on graduation status. “This achievement is an outcome of our relentless planning, hard work, and efforts over the last 12 years. The people of this country have made it possible.” However, it is not fair for a country to sit on the razor edge and be complacent with the current status since it is the milestone and not the winning post. At the end of the year, let us catalog all the merits and demerits in our achievements and make a determined calculation to outline sensible strategies to cope with these challenges.
The writer is the Treasurer and a Professor at the School of Business and Economics, United International University. He may be contacted at obaidur@eco.uiu.ac.bd
