Enhanced productivity, competitiveness crucial for post-LDC era: Experts

Policymakers, experts, and economists advised strengthening resilience by improving productivity, competitiveness, and negotiation skills to address the challenges Bangladesh will encounter post-graduation from the least developed country (LDC) status.

At a dialogue hosted by the Centre for Policy Dialogue (CPD) in the capital Monday (11 March) to discuss the outcome of the recently concluded MC13, they emphasised the need for diversifying exports to lessen dependence on a single item, preparing reciprocal trade facilities and enhancing the preparation of Free Trade Agreements (FTAs), Preferential Trade Agreements (PTAs), and bilateral trade relationships.

Professor Mustafizur Rahman, a distinguished fellow at CPD, said the World Trade Organisation's 13th Ministerial Conference (MC13), held recently in Abu Dhabi, failed to reflect the wide expectations and concerns of the soon-to-be-graduating LDCs.

He said the conference made a decision regarding the extension of duty-free and quota-free market access through bilateral negotiation, but did not specify the duration of this extension for the LDCs after graduation. However, countries without schemes for LDCs, such as the US, would not be included in this decision.

The CPD organised the event "What did WTO-MC13 Deliver for the Graduating LDCs? Perspectives from Bangladesh" in partnership with FES Bangladesh.

Bangladesh is expected to graduate from the LDC status in 2026.

Emphasising several initiatives for the graduation period, State Minister for Commerce Ahasanul Islam said, "Even if Bangladesh fails to graduate from the LDC status by 2029, it would be considered a failure for the country, not the World Trade Organisation."

He also mentioned the country's ongoing preparations for several Free Trade Agreements (FTAs), Preferential Trade Agreements (PTAs), and Comprehensive Economic Partnership Agreements (CEPAs).

The state minister also said special emphasis is being placed on pharmaceuticals, leather and jute products. Handicrafts will receive special attention.

Dr Debapriya Bhattacharya, a distinguished fellow at CPD, believes that additional time for continued trade facilities, achieved through negotiation between LDCs and offering developed countries, will be futile if not utilised effectively. 

He emphasised the need to identify a new export sector outside of the ready-made garment industry within this timeframe.

Debapriya said Bangladesh has now multiple identities which demand multiple initiatives. Preparing for reciprocal facilities for trade should be the top priority for the government. He also stressed transforming from an incentive-addicted trade policy to a preference-oriented policy.

He said out of 45 LDCs, 18 are at the different stages of graduation. But only four including Bangladesh are on a good path.

"Bangladesh may face some serious problems due to dependency on a single product," he said, placing an example of Angola — a country in Central Africa which relies solely on one product for export: oil. A significant drop in fuel prices has had adverse effects on the country's economy.

Tapan Kanti Ghosh, senior secretary of the commerce ministry, also expressed concern over export concentration and said "We have only four products beyond RMG with export value each over $1 billion."

CPD Fellow Mustafizur Rahman said most of the LDCs are in the process of recovering from the pandemic's adverse impacts and the negative impacts of the Russia-Ukraine war. Many of the graduating LDCs remain susceptible to different types of vulnerabilities.

The protectionist tendency of developed countries is reducing trade labialisation, he said, adding the number of protectionist and trade restrictive measures in developed countries exceeds the number of liberalising and trade facilitating measures.

Mustafizur Rahman said that losing preferential market access is the biggest concern for Bangladesh. If the preferential market access is removed, around 90% adverse impact would be on Bangladesh.

Richard Kaniweski, the interim resident representative of the Friedrich-Ebert-Stiftung (FES) Bangladesh, delivered the introductory remarks at the event.

He said the graduation will come with challenges and opportunities. Careful navigation and strategic planning are required to ensure sustained development after graduation. Collaboration with global partners will be one of the key drivers of trade and development.