WTO and LDC graduation

There is a call for deferring the country's graduation from the Least Developed Country (LDC) category. Some civil society activists and trade bodies have raised concerns about the possible adverse effects of the graduation, which is scheduled to happen by the end of next year formally.  Though the discussion about deferment of graduation is not new, it has become widespread after the fall of the Hasina regime. The ousted regime displayed the decision of graduation, taken by the United Nations (UN), as one of its great success stories.  Due to the oppressive attitude of the Hasina government, it was difficult to raise questions about the move at that time. Nevertheless, some differed with the government for its hurry in pursuing graduation and called for extensive preparation to equip the post-graduation shock. But The autocratic government took little heed of it.

It's important to note that seeking graduation from the LDC category is not inherently negative. In fact, it signifies a nation's ambition to progress, fostering prosperity and reducing poverty. This aspiration can inspire a poor country to strive for a better future, where citizens can enjoy an improved standard of living and the government can rely less on foreign aid.

UN also encourages LDCs to transform themselves into competitive ones. Certain benchmarks have also been set in this connection to measure the advancement of the LDCs and identify whether they are fit for getting out of the category of the poorest nation.  An increase in per capita income to a certain amount (at least $1306), advancement in human development and reduction in economic vulnerabilities are the factors that help a country to become non-LDC.  The LDCs regularly provide information about their development in these areas to the relevant body of the UN, the Committee for Development Policy (CDP), for review. After reviewing the data and statistics so presented, the UNCDP decides which LDCs are moving toward graduation. 

It's crucial to understand that the UN body does not independently verify the authenticity or reliability of a country's data. It's the responsibility of each nation to provide accurate data, ensuring a clear and trustworthy representation of their development.   Similarly, countries must undertake the necessary groundwork and preparations to effectively manage the challenges that come after graduation.

Those urging for deferment of the LDC graduation have provided several reasons for doing so. According to them, the country's socio-economic advancement scenario is based on some flawed and distorted data and statistics. They blamed the ousted Hasina regime for manipulating key data to conceal weakness and provide deceptive advancement in some areas. They also argued that without adequate preparation and measures to reform the key areas, the ousted government pushed the agenda of graduation based on distorted data. 

The arguments are valid to a large extent. The problem is that these can't be presented as reasons before the UN while seeking the deferment of graduation. Trying to do so will tarnish the country's image and severely damage the acceptability of national development. Instead, some prudent and widely acceptable factors need to be presented with strong arguments to substantiate the request for deferment of graduation. But the work is not so easy.

A popular misperception is the role of the World Trade Organization (WTO).  Last month, Chief Advisor Muhammad Yunus met WTO Director General Ngozi Okonjo-Iweala on the sidelines of the World Economic Forum annual meeting in Davos.  At the meeting, the WTO chief said that the multilateral trade body would help Bangladesh graduate smoothly from the LDC category. Taking a cue from the meeting, some expressed disappointment and blamed WTO for pushing the graduation.

Being an LDC, Bangladesh has enjoyed several benefits and flexibilities, especially in the area of global trade. These also help the country become competitive after a certain period when compliance with international trade rules and regulations becomes easier.  WTO is the international organisation that makes trade rules and trade-related dispute settlements. Bangladesh has been a member of the organisation since its formal inception in 1995 and joined GATT, the predecessor of the WTO, in 1972. So, the country is closely associated with the organisation and has been playing an active role in various multilateral trade negotiations under the umbrella of the WTO. Bangladesh also led the LDC group in these negotiations for long. 

There's a common misconception that the WTO determines the graduation of LDCs. This misunderstanding has led some civil society organisations to pressure governments to seek a waiver from the WTO. However, it's important to clarify that the WTO has no authority over a country's inclusion in or exclusion from the LDC category. This decision falls solely under the jurisdiction of the UNCDP. 

In fact, the multilateral trade body cannot offer any unilateral facility. Bangladesh and other LDCs have been frantically trying to extend the trade benefits for graduating LDCs for a couple of years. In other words, these countries want to get the benefits even after they are stripped of the LDC tag for three to six years. They also wish to gradually phase out the LDC-specific benefits to make graduation smooth and sustainable. So far, little progress has been made in this regard, and the LDCs are still negotiating. WTO DG actually referred to the process. And there is no scope for requesting WTO to defer the graduation.

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