The UN endorsement for Bangladesh's graduation to a developing country is sure to stir up joy and excitement among all sections of people. With the UN General Assembly (UNGA) adopting a resolution unanimously to this effect, all procedures relating to Bangladesh's entry into the developing country grouping are now completed. The country will have unhindered entry to the club of developing countries, leaving behind the stigma of an LDC. The change of status will brighten the image of the country internationally.
Elevation of the country's status comes as international recognition to its improved scorecard in areas of human development, economic vulnerability and per capita income---three necessary conditions for graduation. All these have not happened in a year or two. Combined efforts of all, including people in both private and public sectors, non-governmental organisations (NGOs), academia and the researchers for the past few decades have helped the cherished dream come true.
But the elevated status brings with it several challenges. Concessions that the country has been enjoying since its birth as an LDC in areas of trade and international borrowing would no more be available after graduation. This would create a void, and the task of filling it up could prove to be a daunting one. The European Union (EU) and the UK would continue to offer preferential trade benefits until 2029, but others would withdraw the same soon after graduation. The country, however, is lucky because it has got five more years to be facing the upcoming challenges.
The government, it seems, is alive to the challenges. Several committees under the Prime Minister's Office are working to identify and address the post-graduation challenges. A project under the supervision of the PMO is also in place to help conduct multifarious researches involving graduation. What, however, will be important is getting the country ready to face the challenges effectively during the post-graduation days. Borrowing from the multilateral institutions at relatively higher interest rates will be a problem, but not an insurmountable one. Prudent borrowing could be one of the ways of dealing with the problem.
Trade and investment are the areas that deserve far greater attention from both the government and the private sector operators. The government will have to offer the right policy support to the private sector and foreign investors. The private sector will have to be proactive and take measures to improve the skill level of workers, produce more high-end products and cut the cost of production to be competitive in the international market.
Investment has been an area of concern in recent years. Private investment remains almost stagnant. The inflow of foreign direct investment also has been insignificant compared to many other regional countries. The country has not been able to cash in on the relocation of many industries out of China in recent years due to the absence of the kind of business environment the foreign investors want to see. An improvement in investment climate should thus be a priority task for the government. In sum, both the government and the private sector will have to devise an appropriate transition strategy so that the country can effectively address the post-graduation challenges.