Experts at a dialogue on Thursday said that losing preferential market access for exports and tough conditions for foreign loans would be two major challenges for Bangladesh when it would graduate to a middle-income country.
Bangladesh should adopt a strategy involving public and private sectors for a smooth graduation from least developed country to middle-income one for the sustainability of the promotion, they said at the dialogue titled ‘Bangladesh and the LDC Graduation Challenges’ organised by the Centre for Policy Dialogue at the Lakeshore Hotel in the capital Dhaka.
They also made suggestions including enhancing competitiveness, market and product diversifications, industrialisation and efficient use of foreign loans for addressing the graduation challenges.
CPD chairman Rehman Sobhan chaired the event while Mustafizur Rahman, distinguished fellow of the organisation, presented the keynote paper.
Former caretaker government adviser Wahiduddin Mahmud, state minister for foreign affairs Md Shahriar Alam, Federation of Bangladesh Chambers of Commerce and Industry first vice-president Md Shafiul Islam Mohiuddin and GEMCON Group director Kazi Anis Ahmed spoke at the dialogue.
Mustafizur Rahman in his keynote paper said that there was a high possibility that Bangladesh would be considered for graduation in 2018, and would hopefully finally graduate from the group of the LDCs following the two subsequent triennial reviews, in 2024.
Following the graduation from LDCs, Bangladesh would need to adjust with the new realities as the conditions for foreign loans and grants would be tightened and preferential market access would not be eligible, he said.
Unless Bangladesh manages to renegotiate through bilateral agreements or as part of regional trade agreements, the country will have to face tariff rates in export after 2027, Mustafiz said.
He said that Bangladesh was well positioned for graduation from the LDC group and more emphasis would need to be put on drivers of structural transformation in the economy in view of attaining the goals of the 2030 sustainable development agendas.
Wahiduddin Mahmud said, ‘Bangladesh will be graduated strongly from LDCs and we should welcome the upcoming change.’
He said there are challenges for Bangladesh as the US and Vietnam are going to sign bilateral trade agreements.
Terming Bangladesh’s readymade garment sector as an enclave industry, Wahiduddin said the industry has grown up only for export but the manufacturing sector should cater to the domestic market and then export.
He said that low wages should not be basis of the competitive advantage of the RMG sector.
Wahiduddin suggested adopting better technology for a productivity increase.
We have to shift from a replication mood and the manufacturing sector should have to replicate with latest technology, skilled workforce for higher competitive strength,’ he said.
Md Shahriar Alam also emphasised adopting technology and increasing of productivity to address the post-LDC challenges.
He said an economy-wise assessment is needed to identify what types of initiatives would be required to address the post-LDC challenges.
Md Shafiul Islam Mohiuddin said, ‘The issue of labour standards will be a big issue in graduating from LDC status though we have implemented all the requirements of labour laws in the readymade garment sector.’
Kazi Anis Ahmed said that high cost of financing, insufficient power and gas supply and corruption were increasing the cost of doing business in the country.
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