Breaking News
April 2, 2021 - Professor Satya Prasad Majumder, VC of BUET along with Abul Kashem Md. Shirin, Managing Director & CEO of Dutch-Bangla Bank Limited, inaugurating a Fast Track at BUET campus premises on Thursday as chief guest. Prof. Dr. Abdul Jabbar Khan, Pro VC of the university
April 2, 2021 - Nagad struggling to tie up with bank
April 2, 2021 - Mahin Mazher, Managing Director of Index Agro Industries Ltd, along with other officials poses for a photo after attending the company’s IPO lottery at the Renaissance Hotel in the city recently. Deputy Managing Director Mamunur Rashid was also present.
April 2, 2021 - MHM Fairoz, Managing Director & CEO of Singer Bangladesh, along with other senior officials launching special edition refrigerators to mark the 50 Years of Independence of the country at the company’s head office on Friday.
April 2, 2021 - Md Mosaddake-Ul-Alam, Managing Director of Ansar-VDP Unnayan Bank, paying tribute by placing wreath at the National Martyrs’ Memorial in Savar on Friday. Bank’s General Mangers Mohammad Alauddin and Z M Hafizur Rahman, among others, were present.
April 2, 2021 - Syed Waseque Md Ali, Managing Director of First Security Islami Bank Ltd, inaugurating CRM Booth at the bank’s Head Office recently. Additional Managing Directors Abdul Aziz, Md Mustafa Khair and Deputy Managing Director Md ZahurulHaque, among others, were present.
April 2, 2021 - FBCCI seeks simple interest rate for doing business easily
April 2, 2021 - Provati Ins posts 30pc profit growth
April 2, 2021 - M Amanullah, Vice Chairman of the Mercantile Bank Limited, inaugurating Dakpara sub-branch in Keraniganj by cutting ribbon at the Head Office of the bank. Bank\’s Managing Director & CEO Md Quamrul Islam Chowdhury, Vice Chairman Akram Hossain (Humayun), a
April 2, 2021 - BPGMEA gets new bosses
April 2, 2021 - Mohammad Shafiul Azam, Head of Card Division of South Bangla Agriculture and Commerce (SBAC) Bank Limited and Gazi K. Rahman, GM of Momo Inn Hotel & Resort, Bogura, exchanging document after signing an agreement at the resort recently. Under the deal, debit-credit cardholders and employees of the bank will get up-to 40 percent discount of different services in the resort. Tariqul Islam Chowdhury, CEO of the bank and senior officials from both sides were present.
April 2, 2021 - Kafil vows for an environment and worker’s safety friendly factory
April 2, 2021 - No shortages of food this year: Razzak
April 2, 2021 - BASIC Bank gets new MD
April 2, 2021 - Dr. Mohammed Haider Ali Miah, Managing Director and CEO of Exim Bank Limited, inaugurating the bank\’s 132nd branch at Shahparan in Sylhet on Wednesday. Md. Firoz Hossain, AMD, Shah Md. Abdul Bari, DMD, other senior officials of the bank and local elites
March 31, 2021 - Dhaka set to host 10th D-8 Summit on April 8
March 31, 2021 - Bangabondhu’s dream journeys 50 years of Bangladesh
March 28, 2021 - ICSB CELEBRATES THE GOLDEN JUBILEE OF INDEPENDENCE OF BANGLADESH ALONG WITH MUJIB BORSHO
March 27, 2021 - India’s involvement is inextricably linked to Bangladesh’s birth: PM
March 23, 2021 - JnU appoints new head of public relations department
March 23, 2021 - ULAB signs MoU with the Peoples’ Friendship University of Russia
March 23, 2021 - Rupali Bank distributes loans to flower farmers in Jashore
March 23, 2021 - Bangladesh reports 18 deaths, 3,554 fresh cases from COVID-19
March 23, 2021 - IBBL signs MoU with Titas Gas
March 23, 2021 - Ridesharing helps working women
March 17, 2021 - Al Emran Chowdhury, Director & CEO of Bangladesh Specialized Hospital Limited and Md. Kamruzzaman, Head of Retail Banking of ONE Bank Limited, exchanging document after signing an agreement at the bank’s head office recently. Under the deal, Debit, Credit & Prepaid card holders of the bank with dependents will enjoy 25% discount on all Pathological test. High officials from both sides were present.
March 17, 2021 - Bangabandhu — the Bengali nationalist: Afsan Chowdhury
March 17, 2021 - Mosharraf, Heme pair up for Eid drama
March 17, 2021 - President urges politicians to take lessons from Bangabandhu’s ideals, works
March 17, 2021 - Nation begins 10-day Bangabandhu Birth Centenary, Independence Golden Jubilee celebrations
LDC graduation: A pyrrhic victory?

LDC graduation: A pyrrhic victory?

Kazi Asszad Hossan: It is heartening that Bangladesh is set to graduate from LDC status. While there is much exuberance regarding this issue, an analysis will prove that the promising future that is being painted contradicts the looming herculean challenges that will ensue. And this blissful ignorance about challenges may undermine the preparation to surmount the hard time that lies ahead.

Bangladesh was under the LDC category since 1975. In 2018, after the fulfilment of the criteria to graduate from LDC, Bangladesh acquired eligibility for the graduation. The eligibility is measured based on three indices namely-GNI per capita income, Human Asset Index (HAI) and Economic Vulnerability Index (EVI).

Committee for Development Policy (CDP) has given another nod to the ultimate graduation of Bangladesh. It is to be mentioned that, following a solicitation by Bangladesh to prolong the period for LDC graduation on the ground of ill-effects of COVID-19, authorities had shifted the time to 2026 from 2024.

The benefits those Bangladesh will have after the graduating is dwarfed by the cost that will be imposed. Admittedly, Bangladesh’s image will be projected as a developing country and a consequent confidence-boost in the potential investors. Perhaps, the most paramount among the benefits is the fact that Bangladesh’s credit rating will upgrade and Bangladesh will decidedly see a high flow of FDI and it will also open the opportunity of external finance.
However, the adverse effects or challenges that will be posed is rather strenuous for a country like Bangladesh. According to UNCTD (United Nations Conference for Trade and Development),Bangladesh will see 7.5 percent decline in its export while Center for Policy Studies(CPD) forecasts a 8.7 percent drop in export earnings.

It is important to understand that the graduation from LDC status has many consequences. Firstly, Bangladesh will no longer be able to access WTO waiver which exempts the country from Trade Related Intellectual Property Rights [TRIPs] with obvious impact on country’s pharmaceutical industries. Secondly, Bangladesh will also fall out of favour of WTO flexibilities regarding subsidies with repercussions for country’s agriculture. Thirdly, Bangladesh will lose MFN (Most Favoured Nations) and GSP (Generalized Systems of Preferences) provided by various regional blocks and trade partners with fallout for RMG sector.

LDCs are exempted from intellectual property hurdles as exacted by an arrangement called TRIPs. While other developed countries had to count an exorbitant sum of money owing to patent and intellectual property related conditions, Bangladesh was exempted because of its LDC status. This exemption came as a windfall for pharmaceutical industries of Bangladesh and stimulated its rise as a major industry of Bangladesh. However, this unique privilege will cease after the graduation–with repercussions for pharmaceutical industries in particular and whole economy in general.

Besides, Bangladesh as an LDC country enjoys zero-duty tariff, preferential trade and regional trade benefit to 38 countries worldwide, 28 of which are within EU. European Union is one of the major export destinations for Bangladeshi RMG and other goods through its GSP facility–a privilege which will cease after LDC graduation. However, Bangladesh can avail GSP+ facility which comes with a constellation of conditions. Among others, GSP facility requires ratification of 27 international conventions relating to Human Rights, ILO and environment protection and good governance.

Bangladesh RMG sector, since its inception, was beneficiary of comparative advantage emanating from cheap labour. However, this industry is now facing strains. One of the significant challenges confronting this industry is the rise of new competitors. Vietnam poses a threat to Bangladesh’s erstwhile unrivalled position and competitiveness in the global market. With the current trend continue unabated, Vietnam is poised to dethrone Bangladesh’s longstanding 2nd position in this sector. With diversified market, increased productivity, decreased lead time, Vietnam had managed unique combination to excel in the industry.

Vietnam has recently inked an FTA with European Union which entails 99% elimination of tariff. Far from harnessing this potential of free trade agreements, Bangladesh is now in jeopardy given the cessation of GSP being on the horizon. To better combat this cessation, Bangladesh has to utilize economic diplomacy and negotiate with regional trade blocks and trade partners for concessions.

Any external shocks, therefore, will be cataclysmic to the whole economy. Therefore, Bangladesh should emphasize developing other sectors, such as leather, glass, ceramics, cement, ships, light engineering products, microchips, smartphones, computer, and IT-related products. If Bangladesh can diversify its export basket, it will reduce the vulnerability from external shocks. Besides diversifying industry, Bangladesh should also diversify product that RMG sector offer. While Vietnam is known for its high-end apparel products and diversified exports, Bangladesh till now is confined to only 4-5 items and low-end cheap products. Besides, Bangladesh lacks a robust a backward linkage industry.

Besides, according to the World Bank (WB) Ease of Doing Business 2020 index, Bangladesh ranked 168. Bangladesh should remove its legal and infrastructural bottlenecks that dissuade foreign investment and should offer more benefits to the prospective investors.

Unfortunately, privileges of our economic growth are not equal to all. A section of the country’s population has accumulated wealth. The Gini Co-efficient measured on a scale of 0 to 1; the closer it is to 1, the higher the inequality rate. A rate of 0.5 point refers to dismal inequality prevailing in a country. While the Gini Coefficient was 0.29 in 2014, it rose steeply and stood at 0.36 in 2020. This rise is illustrative of ominous state of economic inequality. What’s more worrisome is the rampant corruption is eating into vitals of our economy. Government should, therefore, take measures in order to attain much greater progress in the future.

To better coordinate these efforts, government should craft a transition strategy which may contain various goals. To gain uninterrupted international support in form of aid and other facilities should be the focal point of this strategy paper. This strategy paper should as well entail coping up strategies in the event of halt of the prevailing facilities. Free trade deals and other form of economic diplomacy should top the agenda of the strategy paper.

Therefore, rather than relishing in fleeting success, Bangladesh government should put all its efforts in order to better cope up with the challenges that will be posed by this transition. If Bangladesh can combat these emerging challenges with aplomb, then this transition will bring new dawn for country’s economy.
The writer is a student,
University of Dhaka

About author

AWARD

Pori to act in Tauquir’s next

Pori to act in Tauquir’s next

RN Desk;Pori Moni will be seen as the heroine in Tauquir Ahmed’s next film. She will be accompanied by Lux…

Reflection Team

বাংলা

আবদুল্লাহ বঙ্গবন্ধুর আদর্শের পরীক্ষিত সৈনিক ছিলেন: প্রধানমন্ত্রী

আবদুল্লাহ বঙ্গবন্ধুর আদর্শের পরীক্ষিত সৈনিক ছিলেন: প্রধানমন্ত্রী

: প্রধানমন্ত্রী শেখ হাসিনা ধর্ম বিষয়ক প্রতিমন্ত্রী ও একাত্তরের মুক্তিযুদ্ধের প্রবীণ নেতা অ্যাডভোকেট শেখ মোহাম্মদ আবদুল্লাহর মৃত্যুতে শোক জানিয়েছেন। এক…

Recent Video

Photo Gallery

Folder not found
wp-content/uploads/2012/02/