With its graduation from the Least Developed Countries (LDCs) group, Bangladesh is set to arrive at an important juncture of economic growth. Now the country requires right policies and timely actions in order to avoid falling into the 'middle-income trap' like a number of countries that have already fallen. A number of countries across the world are stuck in the lower-middle income status and are unable to move up for long.
Bangladesh should now be prepared for the probable impact of graduation. To formulate effective strategies to avoid that risk, it is high time for the country to face the challenges of graduation to move forward. It is because the country will gradually lose preferential opportunities that the LDCs usually enjoy in trading with the developed countries.
The probable impact of Bangladesh's loss of preferential facilities in major export destinations will be felt on its exports, Gross Domestic Product (GDP) growth and other socio-economic indicators. The country is now enjoying preferential trade access benefits of varying degrees offered by more than forty countries. According to the prediction of economists, once the country graduates from the LDC bracket, it is likely to lose about USD 2.7 billion in export earnings every year. Experts believe that to overcome this, it is necessary for the government to ensure the much needed (i) political stability, (ii) financial sector reform, (iii) access to reliable and affordable power, (iv) efficient infrastructure - including improved port facilities and highways, (v) export diversification, and (vi) enforcement of law to reduce cost of doing business in the country. All these are also necessary in order to achieve 8.0 per cent plus GDP growth as the country is set to achieve.
Bangladesh is currently faced with a worst man-made disaster created by the influx of more than a million refugees from neighbouring Myanmar. The United Nations (UN) estimates that as of February 2018, about 1.1 million Rohingya refugees fled Myanmar's ethnic cleansing and entered Bangladesh. Bangladesh had no option but to give shelter to the Rohingyas by opening its border and hosting them for an indefinite period of time. The influx of Rohingya refugees has created a considerable pressure on the economy and overall security of the Bangladesh society. About 6,000 acres of hilly land has already been deforested by the Rohingya camps in Cox's Bazar. A Bangladesh's premier think-tank, Centre for Policy Dialogue (CPD), estimates that the total value of 6,000 acres of deforested land in the Rohingya camps is equivalent to over Taka 7.41 billion or USD 86.67 million. Such a heavy socio-economic burden for a country like Bangladesh is to risk the expected growth level. It is hoped that the recent visit to Beijing by the Bangladesh Prime Minister will convince the Asian Super Power China to influence Myanmar to take back its Rohingya population at the earliest and thus ease Bangladesh economy to move ahead as planned.
However, apart from all these, Bangladesh being a low lying deltaic region is almost regularly attacked by seasonal floods in the monsoon accompanied by other natural calamities like droughts and cyclones. Such calamities cause heavy losses of lives, standing crops, livestock and properties. Nevertheless, the country with its own resources has to get along with all these disadvantages and at the same time move forward. The only strength is that the country is inhabited by time tested brave people who courageously face such natural calamities that frequent the country. This make us believe that the country will keep on moving forward without being trapped in the 'middle-income' bracket if appropriate and timely socio-economic policy measures are taken.
Sarwar Md. Saifullah Khaled is a retired Professor of Economics, BCS General Education Cadre.
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