Bangladesh has been proudly celebrating fifty years of its Independence. This great achievement has coincided with the United Nations' acknowledgement of the country's graduation from LDC to the developing country group. Bangladesh attained the required indicators including GNI per capita, human asset index and economic vulnerability index for graduating from LDC to Developing country in 2018. Since then Bangladesh has been maintaining the economic and social indicators. We all have reasons to celebrate the achievements. However, there are suggestions that the country's graduation to developing nation's group will bring for us a number of challenges in the future.
The current duty free access to export markets for several commodities of the country will cease to exist once we leave the LDC group and step into the developing country category. Also Bangladesh will not be given low interest loans or grants for financing its development projects. A number of concessional treatments the country so far has been enjoying as an LDC will be no longer available once our status will be elevated. Besides, loans and financial supports at a concessional rates will not be offered, rather we have to ensure our export commodity accesses to international markets paying normal duties and taxes (unless we sign free trade agreements with the countries of export). Various published reports project that the country may lose approximately 8-10 per cent exports due to the erosion of preferential benefit, especially duty free access to the developed and to some developing country markets.
Experts believe that the country will require among others to improve its economic capabilities and productivity as well as substantially diversify export of commodities and services to maintain its export momentum. Our cost of business must be reduced and productivity should be improved to offset the costs for financing businesses to remain competitive in the export and domestic markets.
The elevated position and acknowledgement of Bangladesh as a member of the developing nations will secure its credit worthiness and therefore, should allow more opportunities for getting commercial loans from international market with competitive rates as a less risk borrower. The country needs to achieve economic diversity, technological up-gradation and skill developments as part of human resource development. Also, it will need to put additional efforts to minimise climate vulnerability and ensure inclusive development.
Bangladesh got five years time to prepare itself for the challenges for stepping in to the developing nations group. Policy planners, business groups and executing agencies should work out appropriate strategies to meet the upcoming challenges for the new realities and reform the deficiencies in scores of areas, including infrastructure and service delivery by the public sector. A comprehensive plan and strategy need to be worked out for sustainable human resource development for the new realities.
Already a number of business enterprises have been preparing themselves for competitive international businesses. As for example, a good number of textiles and garments manufacturers have converted themselves into 'Green' factories and secured international recognition for 'Leadership in Energy and Environmental Design' (LEED). There are several highly rated green denim, knitwear and textiles mills in Bangladesh. So far, nearly seventy garments factories have achieved LEED certification and another 280 factories are in the process of obtaining the same from the US Green Building Council. Of the top 11 LEED Platinum certified factories, eight are from Bangladesh. Attaining LEED certification has given opportunities for the Bangladeshi factories in garments and textiles sector to secure solid reputation and market leadership of quality products, timely delivery and top class service. The LEED certified factories have to care for environment protection and sustainable business plan and practices through reduction of carbon footprint in production processes, reduction of water and artificial energy uses, ensuring safe and healthy work environment and better labour protection. These factories have been demonstrating the fact that investments in environmental care and workers' health, safety and welfare improve productivity and lessen migration of work force from their factories.
Harvesting rain water and solar energy and utilising them in a circular economic chain in the factory, wise combination of natural and artificial ventilation additionally help the LEED factories to save artificial energy use and carbon emissions. The renowned global retailers and major brands place work orders at a relatively higher prices (the green factory owners enjoy advantageous negotiation benchmark for better prices from their customers) to the Bangladeshi factories and have been comfortable to do business with them. The green initiatives have been helping Bangladeshi textile and apparel factories to brighten the country image and the industry sector which in turn help export growth of the sector despite the global economic recessions and Covid-19 pandemic.
Mushfiqur Rahman is a mining engineer and writes on energy and environment issues.