Bangladesh is revisiting its trade ties with some least developed countries (LDCs) as they are in the process of graduating out of the world's poor-country club, officials said.
The reevaluation of trade preferences is taking place since the Department of Economic and Social Affairs (DESA) of the United Nations is preparing impact assessment of Bhutan, Kiribati, Nepal, Sao Tome and Principe, Solomon Island, and Timore-Leste's exit from the LDC bloc.
"The main objective of these studies is to identify the potential implications of graduation, in particular those that might arise from the possible termination of support measures development partners extend to these countries in recognition of their status as LDCs," according to a DESA letter.
The next triennial review of the list of LDCs will take place in 2018, and if they meet the criteria, the new status as developing country will be implemented in 2021 or thereafter.
A senior ministry of commerce (MoC) official told the FE the UN DESA will be informed about Bangladesh's trade preferences with those LDCs after consulting experts and reexamining existing trade relations.
He said among those LDCs, Bangladesh has trade-preference pacts with Bhutan and Nepal. With the rest Bangladesh hardly has any direct trade ties.
Bangladesh, Nepal, and Bhutan are member-states of the South Asian Association for Regional Cooperation (SAARC). They are also members of several other regional and multilateral trade blocs. The trio, thus, maintain trade preferences in several areas, the MoC official added.
In fiscal year 2015-16 Bangladesh exported goods worth US$17.89 million to Nepal while its imports from the Himalayan country cost $9.43 million. During the same period, Bangladesh's export to Bhutan was worth $4.74 million and import from there was worth $21.60 million.
Another MoC official said in 2015 review Bangladesh could not fulfill the criteria for graduating to the developing-country status. It will face the review again in 2018 and 2021 and needs to fulfill criteria for graduation on these two consecutive occasions.
Under the UN system the LDC category is determined based on three criteria: per-capita gross national income (GNI), human assets, and economic vulnerability to external shocks.
For graduation the LDC should have a three-year average GNI per capita of more than $1,242, according to the 2015 triennial review.
The human assets index (HAI) reviews LDCs' indicators in population undernourished, mortality rate for children aged five years or under, the gross secondary school enrolment ratio, and adult-literacy rate.
The economic-vulnerability index is based on indicators of population size, merchandise- export concentration, shares of agriculture, forestry and fisheries, share of population in low-elevated coastal zones, instability of exports of goods and services, victims of natural disasters, and instability in agricultural production.
In July 2015 the World Bank said the GNI per capita of many low-income countries including Bangladesh showed improvement in economic performance for their becoming lower-middle-income countries (LMIC), joining those with annual incomes of $1,046 to $4,125.
Bangladesh is now waiting for completion of a formal procedure regarding its graduation to LMIC from the club of low-income countries under World Bank's calculation.
