The outcome of the Fourth United Nations Conference on LDCs (least developed countries) which took place in Istanbul in May 2011, aims to halve the 'number of LDCs to meet the criteria for graduation by 2020,' (UN, 2011: 6).
According to UNCTAD, '2015 marks a turning-point for development policies: from a period when development efforts focused on the MDGs (Millennium Development Goals) to a post-2015 development agenda which will be encapsulated in a broader - and much more ambitious set of Sustainable Development Goals (SDGs) to be achieved by 2030.'
In this backdrop it is to be recalled that from October 28-30, 2014, a three-day international conference on Financing Graduation Gaps of Asia-Pacific LDCs was held in Dhaka, Bangladesh. The Conference confirmed that half of the LDCs from Asia-Pacific are poised to graduate or reach the graduation thresholds by 2020. Kiribati, Vanuatu and Tuvalu are moving forward on the path towards graduation, while Bangladesh, Cambodia, Lao PDR and Nepal have formally expressed their commitment to graduate in the next six years.
CRITERIA FOR LDC GRADUATION: The number of LDCs is revised on a triennial basis by the United Nations (UN) Committee on Development Policy (CDP). Since its creation in 1971, the list has almost doubled to include 48 members. Only four have exited from the LDC thresholds so far - Botswana (1994), Cape Verde (2007), Maldives (2011) and Samoa (2014).
LDC status is determined with reference to three considerations:
n Low-income criterion, based on a three-year average estimate of gross national income (GNI) per capita, according to the World Bank's Atlas method.
n Human Assets Index (HAI) based on indicators of: (a) nutrition; (b) health; (c) education; and, (d) adult literacy rate.
n Economic Vulnerability Index (EVI) composed of: (a) population size; (b) remoteness; (c) merchandise export concentration; (d) share of agriculture, forestry and fisheries in gross domestic product (GDP); (e) share of population living in low elevated coastal zones; (f) instability of exports of goods and services; (g) victims of natural disasters; and, (h) instability of agricultural production.
The EVI and HAI thresholds have been permanently fixed at their 2012 levels. The income-only graduation threshold enables a LDC to become 'eligible' for graduation if GNI per capita is twice the normal graduation threshold. In Asia-Pacific, this is the case for five LDCs - Bhutan, Kiribati, Timor-Leste, Tuvalu and Vanuatu.
BANGLADESH IN THE LDC GRADUATION PROCESS: Referring to Table 1, one can deduce that Bangladesh is close to meeting both non-income indicators which could be taken under consideration in the CDP's upcoming triennial review meeting in 2015.
The key messages are:
n Bangladesh is below the GNI threshold according to World Bank's Atlas method. However, the government's recent per capita calculation (with new base years 2005-2006 which includes remittances), has boosted GNI per capita to the LDC graduation threshold.
nThe calculation of CDP, when replaced with more updated data, will move Bangladesh closer to the threshold value of 66.
n Bangladesh met the EVI threshold according to both CDP's 2012 triennial review and government estimates.
In view of the success achieved in both HAI and EVI indicators, Bangladesh is likely to be found 'eligible' for graduation in 2015. If Bangladesh is found eligible for graduation, between 2015 and the 2018, UNCTAD and UNDESA will prepare vulnerability profile and impact assessment respectively. At the 2018 triennial review, CDP will review the latter alongside country inputs, and subsequently, recommend Bangladesh for graduation to ECOSOC and the General Assembly.
From 2018 to 2021, CDP will monitor Bangladesh's development with the three thresholds. After being recommended by CDP, the UN's General Assembly decides within the next three years which will be 2021 - the Golden Jubilee year of Bangladesh's independence. Table 2 offers a snapshot of the UN graduation process.
Nevertheless, Bangladesh's LDC status has been a key enabler of the growth achieved in the trade sector. This has been possible due to a number of economic privileges - most notably within WTO (World Trade Organisation). Many developed countries, including Canada, the European Union, Japan and the US, have designed schemes that grant preferential market access to goods originating from LDCs.
HOW DOES BANGLADESH FARE VIS-À-VIS OTHER LDCS? During the launch of the latest UNCTAD LDC report in November 2014, a local research organisation mentioned many insights (http://cpd.org.bd/index.php/ cpd-press-reports-media-briefing-unctads-ldcs-report-2014/) but shied away from highlighting Bangladesh's achievements with the LDC caucus. The organisation's opinion that Bangladesh has not met any of the LDC graduation thresholds and that it will need at least a decade beyond 2021 to become middle-income country (MIC), is not only a sophisticated rhetoric complicating the established reality, but it is also misleading LDC graduation perspectives.
It is to be distinguished here that low-income country (LIC) and LDC thresholds are mutually exclusive, i.e., they produce two distinct interpretations. This is where the question of sophisticated rhetoric creeps in.
LIC status governs access to concessional lines of finance and not all LDCs are LICs. In case of Asia-Pacific, they range from Tuvalu - an upper middle income country (UMIC) - to Bhutan, Kiribati, Lao PDR, Solomon Islands, Timor-Leste and Vanuatu - low middle income country (LMICs) - and to Afghanistan, Bangladesh, Cambodia, Myanmar and Nepal - LICs.
This article focuses on the development aspect because graduation from LDC status does not necessitate Bangladesh to become a MIC or LMIC. It is thus relevant and useful to highlight some of the features mentioned by the latest UNCTAD LDC report with regard to Bangladesh:
n With regard to structural transformation of the economy (from agriculture to manufacturing), Asian LDCs recorded the best performance, with Bangladesh as the main driver. Most of the increase in the merchandise exports in 2013 was driven by Bangladesh and Cambodia.
n The rise in FDI (foreign direct investment) flows to LDC exporters of manufactured goods remains highly concentrated in two economies: Bangladesh and Cambodia.
n While 10 out of 13 LDC exporters of services saw an increase in investment flows, the increase in FDI to LDC exporters of manufactured goods was driven mainly by higher flows to Bangladesh (up from $1.3 billion in 2012 to 1.6 billion in 2013), which accounted for 50 per cent of total flows to this category of LDCs.
n Bangladesh alone accounts for 45 per cent of total remittances to LDCs. In absolute terms, Bangladesh continued to be the largest recipient of remittances, receiving almost $14 billion in 2013.
n Aid flows to Asian LDCs increased by $0.8 billion to $12 billion in 2012, largely owing to increased flows to Bangladesh ($0.7 billion).
2015 AND BEYOND: The graduation of Bangladesh is inevitable - whether during its Golden Jubilee or later.
In 2015, the government should work towards inclusion of LDC graduation strategies in the Seventh Five Year Plan (7FYP) 2015/16-2019/20. It should set up a body to review the progress being made with the latter and also achievements recorded with regard to the strategic objectives of the ten-year Perspective Plan 2010-2021. The Perspective Plan will expire on the Golden Jubilee of independence and work must be initiated so that a revised national plan, alongside a post-LDC graduation strategy, can be formulated to take Bangladesh beyond 2021.
The writer is a researcher. zaman.h1984@gmail.com
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