UN high-ups for postponing LDC graduation of Bangladesh

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Bangladesh needs to reconsider the time it all planned to take to graduate from a least developed nation (LDC) to a growing one particular as the coronavirus pandemic has severely damaged the economy, said United Nations (UN) high-ups and economists yesterday.

Although almost all monetary indicators were performing strong in case of Bangladesh in the pre-Covid 19 pandemic period up to February this season, the situation started worsening because the outbreak.

Like many other countries, various people have previously lost their jobs and creation in the factories declined substantially. The economical activities contain fallen and disrupted the source chain abnormally.

Up to now, some 12 million persons became "latest poor" in Bangladesh due to the ongoing epidemic. Moreover, the deadly disease uncovered the indegent state of the healthcare system of the united states.

Analysts made the remarks at a virtual conversation on "Influence of Covid-19 on Bangladesh's LDC graduation and way forward" organised by UN found in Bangladesh and Bangkok-headquartered UN ESCAP.

Gurus and economists perceive that the financial situation may possibly worsen further if the virus will not die out soon therefore advise that Bangladesh delay the graduation.

This is because following the graduation, Bangladesh will lose the preferential trade benefits which many created countries offer on the globe markets for the monetary emancipation of the LDCs.

The graduation may cause localized exporters to count an additional 8.7 % in tariffs on shipments to europe (EU), Bangladesh's major trade bloc where 64 per cent of its goods are destined.

Moreover, exports are anticipated to fall by 5.7 %.

Erosion of trade rewards mean losing competitiveness on earth markets which might also affect local expenditure and job creation. So this is not the time to graduate as Bangladesh needs to enjoy considerably more preferential trade benefits.

Some economists suggested waiting at least 10 additional years as Covid-19 has been damaging the global overall economy severely.

But on the other hand, some economists suggest the UN and developed and developing countries to extend a good generous grace period to Bangladesh for 10 extra years to enjoy the preferential trade rewards.

Officially, the graduation is scheduled in 2024 and the united states will be given three years more simply because a grace period for preparations.

That means Bangladesh will start facing extra tariffs on exports from 2027. But many desire the grace period to end up being extended for Bangladesh to at least a decade due to the devastation of Covid-19 on global economies.

Nepal will probably graduate next year despite facing just about the most severe earthquakes in 2015 and Maldives did so despite being strike by a tsunami found in 2004.

Bangladesh has the durability to graduate regardless of the Covid-19 effects however the grace period ought to be extended as a result that the united states can enjoy the preferential trade benefits.

Among the LDCs, Bangladesh made the highest make use of the trade benefits given by the developed and producing countries.

For example, it utilised 97.5 % of trade benefits given by the EU, 93 per cent by Australia, 94 % by Japan and more than 90 per cent by Canada.

Bangladesh is doing extraordinary in socio financial development and poverty lowering but the Covid-19 affected the standard economic growth. Therefore the country should have a break therefore that it could perform well following the graduation, explained the economists.

"That is a watershed point in time for individuals. Great uncertainty in market. Bangladesh should reconsider for an inclusive method in graduation," said Mia Seppo, UN resident coordinator in Bangladesh.

"Graduation is a good political decision of the federal government. But this decision ought to be taken predicated on broad examination like including universal wellbeing system," she said.

Nagesh Kumar, director of the UN Economic and Social Commission for Asia and the Pacific (UN ESCAP), said some 12 million Bangladeshis have previously entered new poverty as a result of pandemic and 132 million in South Asia.

So this isn't the time to graduate although Bangladesh outperformed in every the three required conditions collection by the UN for graduation, he said.

Moreover, the tax-GDP ratio found in Bangladesh is very low at 8 per cent whereas it really is 12 per cent found in other LDCs and also higher in developed and developing countries.

"Bangladesh should revisit the graduation process by five or a decade. Bangladesh should take considerably more LDC rewards. Bangladesh should act extra realistically. Although the graduation is normally a political decision," said Fahmida Khatun, executive director of the Center for Plan Dialogue (CPD).

She spoke while presenting a keynote paper at the virtual debate.

Bangladesh must be given some more time for enjoying the LDC benefits for the reason that local investors invested lots of money for compliance creation, said Mohammad A Momen, a director of the Bangladesh Garment Suppliers and Exporters Association.

Bangladesh features been contributing extraordinarily found in global peacekeeping and facing the Rohingya crisis, he said.

"And we must develop our backward linkage industries in the garment sector," Momen said.

Deferment of graduation might not be possible however the UN should extend the grace period for Bangladesh, said KAM Morshed, senior director of Brac.

"We should not forget the informal economy that includes a contribution of 80 % in the GDP," he said.

Bangladesh is still good positioned for the graduation, said Monowar Ahmed, ex - secretary to the Economic Relations Division, even while echoing Morshed's views.

"Bangladesh will move forward with its original ideas of graduation," he explained.

Bangladesh should preserve lives first and protect persons before going on to take into account the graduation, said Mercy Tembon, Bangladesh nation director of World Lender.

The human spirit is at the centre of any development, said Subhra Bhattacharjee, head of UN Resident Coordinator's office in Bangladesh, while moderating the discussion.
Source: https://www.thedailystar.net

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