Bangladesh currently belongs to the official United Nations recognised group of Least Developed Countries (LDCs), along with another 48 developing countries, mostly in sub-Saharan Africa. Membership of the LDC Group is based primarily on per capita incomes and countries in the Group receive special benefits such as duty free access of their exports and also access to grant and low interest based Official Development Assistance (ODA) as well as Climate Change Finance (CCF). However Bangladesh is aspiring to graduate out of LDC status in less than a decade. Many of the other LDCs are also hoping to graduate before 2030 by implementing the Sustainable Development Goals (SDGs) which are meant to be achieved by 2030. At the same time the government is planning to prepare a new Vision 2040 to replace the Vision 2021 that we had before. The LDC Group was formed several decades ago when the original General Agreement on Trade and Tariffs (GATT) which preceded the World Trade Organization (WTO) was negotiating trade and tariffs on export and import of goods and services between countries. The poorest countries at that time were allowed duty free exports of their goods and were termed the LDC Group. Since then the group has also operated as a special negotiating block in the climate change negotiations under the United Nations Framework Convention on Climate Change (UNFCCC) as well as the negotiations leading to the Sustainable Development Goals (SDGs). There is also an LDC specific Istanbul Plan of Action in which many rich countries have pledged to provide grants and concessional loans to the LDCs. However, it is also expected that over time many of the LDCs will graduate out of the LDC status as they enhance their per capita incomes and governance. Bangladesh is well on track to graduate on most of the indicators in less than a decade. So what would that mean for us? Graduation from an LDC status to Middle Income Country (MIC) status will bring with it one down side Bangladesh will no longer be eligible for grant based Overseas Development Assistance (ODA) or even the very low interest loans under the International Development Association (IDA) window of the World Bank and Asian Development Bank (ADB). However, even if Bangladesh is no longer an LDC (which in my view will be a good thing) it will still be vulnerable to the adverse impacts of climate change. Hence, even if it is no longer eligible for ODA it will remain eligible for Climate Change Finance (CCF). It is therefore advisable for the Ministry of Finance, and in particular the Economic Relations Division (ERD) to start to access climate finance from all sources , not just from the Green Climate Fund (GCF) but elsewhere as well, so that Bangladesh can look to CCF to replace ODA over next five to ten years. Although government plans, policies and incentives are the necessary conditions for Bangladesh to make this transition in status, the government alone cannot make it happen in practice. The main engine of growth, which needs to be green or sustainable growth, has to be the private sector. Fortunately Bangladesh has a thriving private sector to build upon. However, there has been an over concentration in the garment and textile sectors and reliance on cheap labour as our main attractions. We need to diversify into other sectors and even in the garments and textile sectors into higher value products that don’t rely chiefly on cheap labour. A new opportunity for entrepreneurs and business houses in Bangladesh is to tackle climate change, either through mitigation actions such as renewable energy or adaptation such as in agriculture. This will also allow private sector to access global climate change funds. Another aspect of the graduation process is the need to develop robust and capable national research and knowledge based institutes including both public and private universities to be able to assist the government as well as other citizens to use sound research and evidence in decision making. This is in contrast with the past tendency to rely on foreign consultants for much of the intellectual work that needed to be done. I am not arguing that foreign consultants and experts should no longer play any role, but rather that they should be brought in as and when required by us and not as a condition of donor funding (which is often the case with ODA funding). Finally the most important element in making an effective graduation from LDC to MIC is a change in mind set of all the relevant stakeholders in the country including government, private sector, research community, media and NGOs to become more confident and self-reliant in taking the country forward. If we get all the above things in place Bangladesh will transform itself from being a poor and vulnerable developing country to become a resilient middle income country in less than a decade.
2016 / thedailystar.net