In 1975, Bangladesh was included in the LDC as its poverty rate was almost 83 percent, and over years the poverty rate had declined and by 2019-20 it was at 20.5 percent.
Earlier this week the United Nations General Assembly adopted a resolution under which Nepal, Bangladesh and the Lao People’s Democratic Republic have graduated from the least developed country (LDC) category.
“This development means Bangladesh will be in an advantageous position for negotiating with other developing nations on Free Trade Agreements,” opines Gautam Lahiri, senior journalist and Bangladesh commentator.
After an extended preparatory period of five years instead of standard three, under the Resolution A/76/L.6/Rev.1, these three countries will graduate from the LDC category. The five years period will help the countries in implementing strategies and policies, expected to help them recover from the economic and social damage due to the global pandemic of COVID-19.
According to the UN Committee for Development Policy (CDP), 46 countries are on the LDC List presently and out of these including Bangladesh six other countries are graduating to the next level – Developing Nations.
Graduation of Bangladesh
In 1975, Bangladesh was included in the LDC by the UN as its poverty rate was almost 83 percent, and over years the poverty rate had declined and by 2019-20 it was at 20.5 percent.
Now, by 2026, it will officially become a developing country in 2026.
It all started in March 2018. It has fulfilled the requirements in the three criteria which are to be taken into consideration before the country can be graduated. The CDP had declared that the country was ready to be graduated.
Earlier this year, according to reports the CDP had recommended Bangladesh’s graduation after a second round of review.
Per capita income of USD 1,230 is one of the requirements for transitioning into a developing nation as per the UN; also the Economic Vulnerability Index (EVI) must be below 32 points and the Human Assets Index is taken into account.
What does it mean for India – Bangladesh Relations?
Sharing his views with Financial Express Online, Gautam Lahiri, a senior journalist and Bangladesh commentator, says, “As Bangladesh became qualified to graduate into a developing nation it’s now poised for higher economic growth among many developing nations including all SAARC nations.”
What is the implication of this?
“Though during the pandemic growth rate slipped to 5.4 percent now the entire international economic organization has already projected a higher growth rate of more than 7 percent in the next financial year.”
“Graduating to a developing nation means FDI will flow to Bangladesh more as an attractive destination. Now their per capita income has gone up to USD 1827 in 2019. Above all, credit rating will be more for them. And, also, multinational banks will find a credible lending opportunity in Bangladesh. Last but not least, the country will be seen as a powerful economic base among the developing nations,” he opines.