Some seven sub-committees are preparing draft strategies with a time-bound action plan to meet the challenges of LDC graduation.
According to an official document, Bangladesh will be facing some challenges, such as loss of duty free - quota free access, unilateral, preferential market access, reduced scope for concessional or low interest funding from international and bilateral development partners, preference erosion, and strict compliance with stringent standards.
The government has formed a committee under the chairmanship of the Principal Secretary of the Prime Minister's Office to prepare for the possible challenges that Bangladesh will face as a result of its graduation from a least developed country to a developing country.
The document mentioned that there will be seven sub-committees under this committee. Each sub-committee has members from private sector stakeholders and development researchers.
"These sub-committees are preparing draft strategies with a time-bound action plan to meet the challenges of LDC graduation," it said.
The document mentioned that the present government has adopted the policy of executing Bilateral Free Trade Agreements (FTAs) and Preferential Trade Agreements (PTAs) in the context of potential trade challenges arising from LDC graduation.
Strategies for Preferential Market Access and Trade Agreement have been formulated as ways to address these challenges.
In this context, Bangladesh has signed the Preferential Bilateral Trade Agreement (PTA) with Bhutan, under which 34 products of Bhutan will be duty-free in the market of Bangladesh and 100 products of Bangladesh will be duty-free in the market of Bhutan.
In addition, a prioritization list for the execution of PTA/FTA/CEPA with 13 potential trading countries/trade organizations such as India, China, Japan, Singapore, Indonesia, Sri Lanka, Malaysia, Nepal, USA, Canada, Eurasian Economic Union, ASEAN, and Mercosur has been prepared.
"A preliminary draft of the Regional Trade Agreement (RTA) Policy Guideline has been prepared with the aim of signing bilateral trade agreements with various countries," the document said.
In 2021, the United Nations made the final recommendation for the graduation of Bangladesh from the least developed country category for its progress in various socio-economic fields in recent years.
LDC graduation is one of the important milestones that Bangladesh has achieved in its journey towards development.
After graduation, Bangladesh's participation in international trade and productivity in industrial production will rise to the next level fuelled by new-found zeal and confidence.
The transition will improve the country's credit rating, increase productive efficiency, and enhance our ability to compete globally, broadening our scope of export earnings. International financial institutions and credit rating agencies will evaluate Bangladesh more favourably after graduation.
This will enhance our scope of attracting foreign funding both in the public and also in the private sector for investment and development financing purposes. Foreign direct investment will get a boost enabling new developments.
This will lead to massive development of infrastructure in the country, new job creation, and overall better living standards for the people of Bangladesh.
As per the document, Bangladesh is pursuing hard at the WTO, along with other LDCs, to extend this exemption for some more years for the graduating countries.
The loss of the LDC specific benefits will create an obligation for the country to increase its productive capacity and efficiency to compete in the export market, diversify our export basket and create new markets.
Besides, this will both encourage and force the country to go for higher value added products.
The document said that Bangladesh will have to utilise with farsightedness the period from 2022 to 2026 for our preparation to the graduation from Least Developed Countries so that Bangladesh can move forward even after graduation and sustain its position as a graduated country.
To that end, it said, the ongoing development process must continue to ensure smooth graduation.
"The Government of Bangladesh is fully committed to make this graduation smooth and sustainable. In this context, various policies, strategies, programs, and measures have been adopted."
According to the United Nations Capital Development Fund (UNCDP) recommendation, Bangladesh's transition will be effective in 2026. It means until 2026, Bangladesh will be able to enjoy all these benefits applicable to LDCs.
However, under the current rules, Bangladesh will be able to enjoy duty-free and quota-free market access for another three years, i.e. until 2029, into the EU market after completing its graduation in 2026.
The UNCDP upon the request of the government has recommended that against the backdrop of COVID-19 pandemic, the preparation period for the transition will be five years instead of three. During this period, that is, until 2026, all international facilities will continue.
The LDC Group of the World Trade Organization (WTO) has put forward a proposal to ensure that all trade facilities pertaining to LDCs remain in force for another 12 years after transition.
Bangladesh has actively participated in this process, and is continuing its efforts to get this proposal accepted.
The document said that the government has already taken steps to avail the advantage of GSP+ in EU countries after the graduation.
Moreover, the government has taken effective steps to improve its ranking in the Ease of Doing Business Index to increase the flow of foreign direct investment (FDI), although the index itself has been discontinued by the World Bank.
The benefits of these steps are becoming evident, the document reads.
The government is also in discussion with development partners, trade partners and relevant international organisations will continue to ensure that some important international facilities remain available even after the graduation.
Training arrangements will be made for stakeholders to enhance their ability to deal with post-graduation situations.
To develop human resources, steps will be taken to enhance efficiency as per the demand of the market at home and abroad.
"Steps have been initiated to conduct sector-wise research activities on the opportunities created by the graduation and what can be done to meet the challenges," the document reads.