Bangladesh’s LDC Graduation

The most quoted line of modern English: "To be, or not to be, that is the question . . .", as is known, is the opening stroke of a soliloquy from William Shakespeare's celebrated drama The Tragedy of Hamlet, Prince of Denmark. Here the Danish Prince is tormented by the contemplation of death—lamenting the agony and injustice of life, but acknowledging that the alternative might be worse. One wonders whether such a "Hamlet's moment of truth" has arrived for Bangladesh in the context of exiting from the group of least developed countries (LDCs).  

As may be recalled, in 2018 Bangladesh met all three eligibility criteria for leaving the LDC category in the next six years. This is of course subject to two satisfactory reviews by the United Nation's Committee for Development Policy (CDP). The second of these two triennial reviews is to take place in end February 2021. Things were going pretty well for the country till the Covid-19 intervened as a spoiler in the first quarter of the year. Currently, the vexing question fretting the concerned stakeholders (internal as well as external) is: are the Covid-19 induced damages substantive enough to derail Bangladesh from its scheduled path of leaving the LDC group?

Latest available data suggest that two eligibility criteria, i.e. Gross National Income (GNI) per capita and Human Assets Index (HAI) have significantly increased in Bangladesh since the last triennial review (2018). In spite of marginal deterioration, the third criteria, namely Economic and Environmental Vulnerability Index (EVI) also remains quite positive for the country.

Notwithstanding the immediate and visible adverse impacts of the contagion, all the three core criteria of Bangladesh will most probably be above (or below) the required thresholds. This projection is guided by the fact that the pre-pandemic scores had been high enough to withstand certain level of erosion. Moreover, even if the country does not fulfil one of the criteria, it will still be eligible for graduation based on the two other criterions.

Signals from official quarters suggest that the government of Bangladesh remains committed to the current path of exiting from the LDC group. It would be only politically opportune for the country if the triennial review in 2021 provides the final go, coinciding with the 50th anniversary of the country's independence.

Incidentally, none of the fellow LDCs slated for transition in the coming years are yet to indicate that they are looking for a deferment because of Covid-19. For instance, Vanuatu will be going out of the list next month (December 2020), while Bhutan in 2023 and Laos and Myanmar in 2024. And the same may be said about Nepal and Timor-Leste. However, a final decision on all these candidate countries will be informed by an ongoing United Nations Economic and Social Council (UN ECOSOC) mandated study by CDP as well as recommendations by the respective country Rapporteurs, a newly instituted procedure.

Thus, it seems we are going to witness what the celebrated dramatist Bertolt Brecht would have called epic theatre (as against classic theatre). Epic theatre is not characterised by a tidy plot and story, but leaves issues unresolved—often confronting the audience with uncomfortable questions. Brecht believed classical approaches to theatre were escapist and he was more interested in facts and reality. For example, we need to consider a discernible opinion in the country which propagates that Bangladesh, in view of the evolving pandemic situation, should defer its exit from LDC group. Such postponement will allow Bangladesh to enjoy all the LDC-specific international support measures (ISM)—particularly duty-free and quota-free market access of the country's exports—for an extra three-year period.

There are of course instances when a candidate LDC has asked for more lead period given special circumstances affecting their development prospect. Maldives did that after the tsunami in 2008 and Nepal after the earthquake in 2015. Sometimes, such delaying efforts are not successful as was in the case of Sao Tome and Principe.

A three-pronged approach

It may be recalled that Hamlet's tragedy was of a man failing to deal with his critical circumstances. In contrast, recall Brutus in Shakespeare's Julius Caesar. Hamlet and Brutus were both good men, wanted to do the right thing but contemplated too deeply with the tasks in hand. But Brutus was able to act immediately, while Hamlet was not. The lesson? Bangladesh needs to take an evidence-based political decision soonest regarding LDC graduation, keeping the Covid-19 in perspective. Accordingly, the country will be well advised to pursue expeditiously a three-pronged approach to prepare for a smooth and sustainable graduation from the LDC group.

First, Bangladesh has to articulate and campaign for a comprehensive agenda of transitional ISMs for the graduating LDCs. Admittedly, the country cannot expect to exit the LDC group and continue to enjoy all the current preferences for a protracted period. Thus, it is necessary to have a cleverly conceived and carefully crafted design including enabling ISMs ranging from trade measures to access to concessional finance to intellectual property right to availability of Covid-19 vaccines. Indeed, Bangladesh is well poised to lead this initiative globally on behalf of the graduating LDCs. 

Second, the country has to develop and implement an "augmented LDC graduation strategy" in line with the concept of "build back better" from the pandemic impact. Such a strategy has to be coherent with the Sustainable Development Goals (SDGs) of 2030 Agenda and embedded in the upcoming Eight Five Year Plan (2021-25) and the Perspective Plan (2021-41). This will bind together the three projected development milestones of the country, i.e. 2024/25, 2030 and 2041.

Third, delivery of such a heavy-duty strategic design would demand enhanced efficiency and effectiveness of the current institutional arrangement of the Bangladesh government dealing with the LDC graduation. There is a National Task Force (NTF), created in January 2018 under the Prime Minister's Office (PMO), with the SDG Coordinator as the Convenor. Curiously, all the 10 members of the entity are government officials and thus devoid of representation from private sector or knowledge community. Reportedly, last month (October 2020), the NTF met for the first time after one year. However, a well-conceived and comprehensive strategic document is yet to come by from this entity.  

Concurrently, under the External Relations Division of the Ministry of Finance, there is the "Support to Sustainable Graduation Project (2018-2024)"—costing more than USD 16 million of which two-third is coming from Japanese Debt Relief Grant Assistance-Counterpart Fund (DRGA-CF). It transpires from the website of the project that its activities are limited to awareness raising endeavours.

As Bangladesh enters the last lap of its race to the LDC finishing line, it is critical to have: (i) a strengthened work programme of the NTF; (ii) improved inter-ministerial coordination (at least among ERD, Ministry of Foreign Affairs, and Ministry of Commerce); (iii) expanded participation of stakeholders (by inclusion of private sector and knowledge community) in the official process; and (iv) superior internal and external communications (particularly with the international development partners).

If the Danish Prince would have been around today, he would have possibly called upon Bangladesh not to"suffer the slings and arrows of outrageous fortune", but to "take arms against a sea of troubles and by opposing end them". What would that mean in our current parlance? Bangladesh is destined to confront the pitfalls of LDC transition competently and make the best of the potential opportunities to secure a "graduation with a momentum" as planned.

Dr Debapriya Bhattacharya is a member of the United Nation's Committee for Development Policy (CDP) and a Distinguished Fellow at the Centre for Policy Dialogue (CPD).