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LDC graduation comes well ahead of time

UN in resolution endorses country's status change

FE REPORT | November 26, 2021 00:00:00

In an epoch change in the nation's history, Bangladesh graduates from the world club of least-developed countries (LDCs) ahead of time as the UN General Assembly unanimously adopted a resolution endorsing completion of all the requisite procedures.

The landmark resolution was adopted on Wednesday night, senior ministers of the government said Thursday on a high note of appreciation of the development, and that at a time when the world is reeling from a rare upset forced by the coronavirus pandemic.

Terming the event 'a historic milestone in the development journey of Bangladesh," Finance Minister AHM Mustafa Kamal said this outstanding achievement came through the visionary and determined leadership of Prime Minister Sheikh Hasina.

"This is a reflection of the progress for more than decade. People of all walks of life are part of this success," he added.

Meanwhile, in his reaction over the country's status upgrade among the comity of nations, Foreign Minister Dr AK Abdul Momen said this is a landmark moment and that it became possible due to "prudent and bold leadership" of Prime Minister Sheikh Hasina.

However, the foreign minister outlined some challenges the change entails in the post-graduation regime in respect of trade and finances in particular.

"We will be deprived of many facilities we were enjoying as an LDC," he said, adding that the country is negotiating with the nations concerned so that tenures of some facilities can be stretched beyond the timeline.

For example, the duty-free market-access facilities given under the Everything But Arms (EBA) scheme need to be extended and the European Union has in principle agreed to extend it, the foreign minister said.

"We wanted 12 years of extension but they are likely to extend it up to 2029," he told reporters about the grace period in preferential-trade regime.

"We also need fair prices of our RMG products, and we have requested our buyer countries for that. They are giving very low price compared to their sale prices. We have urged them to look into human aspects behind the price as it also affects the poor workers of Bangladesh," he mentioned.

"Another issue is the rise in lending rate for being a developing country. We have to give higher rates than the present for our borrowings from other countries. We are working on it," he said.

When the UN included Bangladesh in the LDC group way back in 1975, the country's poverty rate was 83 per cent. The rate of poverty declined over the years and it was 20.5 per cent in 2019-20 before the pandemic devastated jobs and income opportunities for many.

According to reports, Bangladesh met all the three eligibility criteria for the graduation: per-capita income, human assets index (HAI), and economic and environmental vulnerability index (EVI).

Earlier, a statement from the Bangladesh Permanent Mission at the United Nations said this landmark achievement in Bangladesh's development journey coincides with the celebration of the 50th anniversary of Bangladesh's independence and the birth centenary of Father of the Nation Bangabandhu Sheikh Mujibur Rahman.

Speaking after the adoption of this graduation-certification resolution, the Permanent Representative of Bangladesh to the United Nations, Ambassador Rabab Fatima, thanked all the member-states, especially the development partners, for their support in reaching consensus for the adoption of this resolution.

She said, "Prime Minister Sheikh Hasina envisioned transformation of Bangladesh into a middle-income country by 2021 and a developed country by 2041. She has led us from the front in this exciting journey despite the unprecedented challenges posed by the COVID-19 pandemic."

Stressing that the graduation of an LDC is not only a success of the country itself but also a testimony to the strength of multilateral partnership led by the UN, she said, "Graduation should not be a punishment; it should be a reward."

She highlighted the importance of ensuring an incentives-based international- support structure to graduating and graduated LDCs.

She also called for tailored and clearly laid-down roadmaps to address every aspect of graduation challenge, namely, post-graduation international-support measures, smooth transition, Financing for SDGs implementation etc.

The diplomat said that the upcoming 5th United Nations Conference on the LDCs (LDC5) to be held in Doha, Qatar, provides the development partners with a good opportunity to come up with a transformative programme of action for the LDCs for the next decade.

The Draft Doha Programme of Action (DPOA) identified graduation as one of its priority areas.

It has set a target to enable 15 additional LDCs to meet the criteria for graduation by 2031.

The success of this ambitious target will largely depend on enhanced support and solidarity from the development partners.

Ambassador Rabab Fatima and Ambassador Robert Rae of Canada are co-chairing the preparatory process of the LDC5 conference.

Meanwhile, business leaders and economists view the graduation as a challenge and opportunity, too. "Exporters face image problem of LDC having natural disaster and political instability, even though offering big discount. Buyers remained hesitant on delivery of the products and sustainability of production," one renowned businessman said recently, ahead of the WTO ministerial conference meant to deal with LDC issues.

Import letters of credit (L/C) of most of the local banks are not accepted in the western world and it has to be reconfirmed by the international banks like HSBC, City Bank NA paying 3.0-to 5.0-per cent charges, he said about the business status of a member of world's poor-country club or LDCs.

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