Need concerted steps to ensure smooth LDC graduation: Experts

Experts at a webinar on Sunday stressed the need for concerted steps to ensure smooth LDC graduation for Bangladesh.

They also suggested prioritising only those free trade agreements (FTAs) where export market access is critical, urged becoming selective about FTAs, and offsetting costs to improve competitiveness for Bangladesh.

They made the observations at the 3rd webinar of the Economic Reporters Forum (ERF) workshop series on Covid-19 and the Bangladesh economy, reads a press release.

At a webinar, titled “Getting Ready for LDC Graduation” and organised by the ERF in partnership with Research and Policy Integration for Development (RAPID) and The Asia Foundation, Planning Minister MA Mannan spoke as the chief guest.

He suggested the Ministry of Commerce to boost communication with EU and the UK for taking maximum benefits from them after the country’s graduation from the LDC status.

Mannan also stressed the need for taking continuous efforts to boost trade and commerce with Canada, China and even neighbouring India.

BIDA Executive Chairman Md Sirazul Islam said that they are hopeful of bringing down the ease of doing business index to double digits by the next year, which will positively impact the attraction of both local and foreign direct investment (FDI).

He said once Bangladesh fully graduates from the LDC status, the image of the country will be further brightened in the world, FDI will increase and therefore, employment generation and the country’s economic progress will be expedited.

Noting that LDC graduation is indeed a challenge for Bangladesh, Sirazul said: “But, we want to welcome it, there is no reason to get frightened.”

The BIDA executive chairman also suggested taking all necessary preparations for successful LDC graduation, including increasing the tax-GDP ratio and further expanding the tax net, increasing efficiency, ensuring human resource development, putting emphasis on export diversification and the services sector.

Commerce Secretary Md Jafar Uddin said although LDC graduation would pose a “challenge” for the country, the government is ready to face it.

Jafar said the government has been continuing discussions with the EU and other countries for extending the transition period after LDC graduation while efforts are on to strike some 11 FTAs and PTAs by next year.

Such a bilateral instrument with Nepal is likely to be signed by January 2021, he said.

The commerce secretary said with the formulation of the Halal Food Certification Authority, halal food export could be enhanced to $10 billion from the current level of $1 billion and thus it could help to gain a surplus of $3 billion as the LDC graduation is expected to incur a loss of $7 billion.

He also informed that the government has been putting due importance on leather, plastic products, light engineering, agro-based products, jute and pharmaceuticals to increase competitive edge of those items.

Chairman of RAPID and Director of Policy Research Institute (PRI) Dr Mohammad Abdur Razzaque in his key-note presentation showed that Bangladesh could make 10 percent cost saving through exchange rate adjustments, reducing cost of doing business, productivity improvement, technological upgradation, efficiency gains through improved customs procedures, inland transportation system and capping interest rates.

Noting that the “mad rush” for FTAs is not a good sign, he said the country definitely needs to sign more FTAs and PTAs, but those should have to be done considering their benefits for Bangladesh.

He also suggested for continuing efforts to gain GSP plus facility from EU through proactive influence, continuing persuasion for gradual phasing out of facilities as the tariff for Bangladesh could even rise up to 9.5 to 10 percent after the graduation, and seeking extended transition period from China.

Bangladesh met the LDC graduation qualification criteria in 2018.

The next United Nations triennial review will take place in February 2021 and Bangladesh is almost certain to satisfy the criteria again, leading to its official graduation to ‘developing country’ status – after a three-year transition period – in 2024.