Home ›› 12 Mar 2023 ›› Opinion
Currently, there are 46 least-developed countries (LDCs) in the world. The concept of classifying the countries in the category of LDC came in 1971 at the UN General Assembly. Income, human assets, economic and environmental vulnerability situation is brought under screening by the UN body in order to be qualified as LDC. The countries belonging to LDCs are entitled to exclusive international support measures (ISMs) in the areas of trade and development cooperation. Ultimately, the UN body and the World Trade Organization (WTO) help the LDCs in many ways in a bid to pull them from economic vulnerabilities.
Preferential market access for goods and services is widely provided to the LDCs as part of support measures. Besides, special treatment in the area of regional trade agreements and technical assistance is given to the LDCs under the WTO rules. The LDCs avail the facilities concerning Generalised System of Preferences (GSP), duty-free and quota-free (DQFQ) market access, special market access facilities in the Regional Trade Agreements (RTAs) and flexibilities under WTO’s Trade-Related Aspects of Intellectual Property Rights (TRIPS) agreement. The LDCs came under the Everything But Arms (EBA) facility from the European Union (EU). A South Asian country, Bangladesh is also a beneficiary of EBA facilities among other LDCs. Basically, under the Generalised System of Preferences (GSP), EBA, GSP plus, GSP standard facilities are provided to the economies based on assessing criteria for being eligible in enjoying these three facilities.
The LDC, Bangladesh, which is now known as the fastest growing economy, has been qualified to be graduated as a developing country. Nepal and Lao PDR with Bangladesh also qualify themselves as developing nations.
The criteria for being graduated as a developing country are critically reviewed by the committee for development policy (CDP). Later, the Economic and Social Council (ECOSOC) formed by the UN verify the report submitted by CDP. It is important to know that the review works are done after every three years. If any country turns into a developing nation as recommended by CDP, the concerned country has to lose many related to trade facilitation provided by the WTO. Like others, Bangladesh would be deprived of the WTO-provided facilities soon after LDC graduation era. Bangladesh has to face lots of challenges from 2026, the year of graduation.
There are more than 250 pharmaceutical companies that enjoy Trade-Related Aspects of Intellectual Property Rights (TRIPS) granted by the WTO. According to a news report, Bangladesh saw pharmaceutical export growth by 269 per cent from $ 45.7 million in FY 2009 to $ 169 million in FY 2021. The significant growth came due to having Intellectual Property Rights (IPRs) in the sector. The IPR facility has been extended until 2033 for LDCs. As LDC Bangladesh will no longer get the IPR facility once the graduates in 2026, happily saying that Bangladesh’s position among LDCs in exporting pharmaceuticals products is the highest (about 55.4 per cent). Even though the GSP facility now availed by Bangladesh will automatically be cancelled as per WTO rules after graduation.
LDC graduation challenges are familiar to all. The Head of the government in Bangladesh is aware of the challenges. Now, Bangladesh is in thinking as well as working level in addressing the possible challenges.
Recently, the fifth United Nations Conference on the Least Developed Countries (LDC5) began and subsequently ended with the presence of the Head of the government of Bangladesh, Sheikh Hasina. Prime Minister Sheikh Hasina joined the conference at the invitation of Emir Sheikh Tamim bin Hamad Al Thani and UN Secretary-General Antonio Guterres. The LDC5 conference was held at Doha in Qatar. The conference in this title is arranged every after one decade. The conference serves the interests of the LDCs facing economic challenges. The LDCs are in a race to fulfil Sustainable Development Goals by 2030. In fulfilling the goals concerning SDGs, there needs the cooperation of development partners. The need for global partnership in going ahead is badly needed. LDC5 conference is a once-in-a-decade opportunity in a bid to accelerate sustainable development. The conference will help the LDCs make progress on the road to prosperity in the days to come.
Recalling the LDC graduation challenges, the premier urged all to move all together in the programmes during her stay. The programmes styled “Sustainable and Smooth Transition for the Graduating Cohort of 2021”, “The Rise of Bengal Tiger: Potential of Trade and Investment in Bangladesh”, “Investment in Research and Development in LDCs for Smart and Innovative Societies”, “Enhancing the participation of LDCs in International Trade and Regional Integration”, “Global Partnership for Smooth and Sustainable Graduation: Marching towards Smart Bangladesh” and Regional Envoy Conference were held in presence of Prime Minister Sheikh Hasina. The premier sought five supports in mitigating as well as addressing the probable challenges and existing problems. The key supports are (1) Providing appropriate incentives to the international private sector for impactful technology transfer to LDCs, including for climate action, (2) Invest in digital infrastructures to reduce broadband divide and tech discrimination in LDCs, (3) Foster collaboration among research professionals and institutes to address issues and challenges facing LDCs, (4) Continuation of LDC waivers under TRIPS Agreement, also beyond graduation, especially for pharmaceuticals and agrochemicals, (5) Support in developing an intellectual property regime conducive to both innovation and development in LDCs. The demand for five key supports was put in place in the programme titled “Investment in Research and Development in LDCs for Smart and Innovative Societies”.
Considering LDCs’ trade share in the world, the focus should be given to free and preferential trade agreements in a bid to see significant trade volume. The share of trade is still low which accounts for 1.0 per cent. Bangladesh’s economy, which is hit hard by the Coronavirus pandemic and Ukraine-Russia war, might experience a bottleneck in managing macroeconomic issues in the days to come. The country is in the state of fast moving toward achieving SDGs coupled with addressing LDC graduation-related probable challenges. The pressures will be removed if global-level cooperation is made sure.
The need for signing FTA/PTA/RTA is a pressing demand now in respect of solving trade-related complexities. In absence of economic diplomacy, no agreements are possible. Prime Minister Sheikh Hasina always emphasize strengthening economic diplomacy which would help Bangladesh to be connected in the future under relaxed terms and conditions. TRIPS waiver and preferential market access were key demands from the Bangladesh side at the LDC5 conference. If these two issues are confirmed, Bangladesh will get enough time in managing all.
The writer is an economic affairs analyst. He can be contacted at mazadul1985@gmail.com
