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LDC graduation may cost Bangladesh $7.0b worth of exports a year

idune

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LDC graduation may cost Bangladesh $7.0b worth of exports a year
FHM Humayan Kabir | Published: November 06, 2020 09:40:10 |

LDC graduation may cost Bangladesh $7.0b worth of exports a year


Bangladesh is likely to lose US$7.0 billion worth of export earnings annually after graduation to a developing nation status in 2024, a government report estimates.
The report said the country could lose the export market, especially in the European Union (EU), Canada, Australia, Japan, India and China.
Bangladesh might also be deprived of the concessional loan benefit from the multilateral and bilateral development partners after its graduation from a least-developed country (LDC) category.

The projections were made at the newly framed Perspective Plan 2021-2041 (PP2041).The state-run General Economics Division (GED) prepared the vision paper where Bangladesh wants to be a developed nation by 2041.Based on the simulation results from the global dynamic general equilibrium model, the plan said: "The loss of preferences in the markets of EU, Canada, Australia, Japan, India and China in 2024 might lead to an annual reduction in the total export of Bangladesh by 11 per cent or equivalent to around $7.0 billion given the current projection of export growth." The vision paper said, "Although the graduation as non-LDC would improve the country's image and rating for attracting foreign direct investments, there will be a number of risk factors." It said Dhaka would lose its preferential trade benefits in the EU market, the largest business destination of the local garment and textile products. Besides, many of the exemptions of WTO provisions, including the cut in tariff and subsides, and adherence to the intellectual property rights (especially for the pharmaceutical sector) will no longer be available after 2024, except for the EU, which allowed a transition period up to 2027.

As an LDC, Bangladesh along with its 48 peers currently enjoys duty and quota-free benefits under the EU's Generalised System of Preferences (GSP).
According to the Export Promotion Bureau, Bangladesh earned US$18.70 billion, 51 per cent of total $36.6 billion earnings, making shipment of goods and services to the European markets in the fiscal year, 2019-20. The vision paper PP2041 said much of the aforementioned perspective benefits are not "automatic" as Bangladesh has to work quite a lot to materialise those.

The paper said though the benefits are not "automatic," almost all of the possible losses would be automatic as soon as the country graduates from the LDC status.
The vision paper has further stated that Bangladesh has to prepare itself over the next seven years to counter or tackle the losses. GED Member Professor Shamsul Alam told the FE that the division had identified the challenges after the graduation. It also suggested some action plans and policy reforms for tackling the losses and protecting the export growth.

Economist Dr Ahsan H Mansur told the FE that Bangladesh's only option is to go for bilateral negotiations with the EU countries as well as other key trading destinations like Canada, Australia, Japan, India and China for getting some preferential treatment. Besides, the government should launch bilateral negotiations with some regional blocs like the ASEAN for tackling its possible export losses after graduating to a non-LDC country, said Dr Mansur, executive director of the Policy Research Institute, a think-tank in Dhaka. For those negotiations, the country also needed to ensure standard international labour rights and trade liberalisation reducing the higher taxes on import products, he added. "If we continue our current tax regime very high and strict for our trading partners, they would not be interested to enter into bilateral agreements on offering possible benefits in their markets after our graduation," he said.

 

DalalErMaNodi

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"The Indian-puppet BAL government should've always had the country remain least developed. They're pushing development to suit their pockets!"


Hahahaha, you're pulling a @Destranator on him.



But he will not tag mods and make allegations of trolling, no that's only reserved for me.



If I so much as comment in any of his threads, he tags mods without fail, already done it once today.



Tagging mods once per day, keeps DalalErMaNodi BCL enforcer away!
 

idune

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Least Developed Country Status: Analyzing the impact of increased protection on insulin prices in Bangladesh

Global Development Policy Centerwww.bu.edu/gdpGEGI@GDPCenterPardee School of Global Studies/Boston UniversityGLOBAL ECONOMIC GOVERNANCE INITIATIVEGEGI WORKING PAPER 038 • 05/2020

DEEN ISLAM, WARREN A. KAPLAN, VERONIKA J. WIRTZ, KEVIN P GALLAGHER

ABSTRACT

In 2021, the United Nations Committee on Development Policy will consider whether Bangladesh should graduate from ‘least developed country’ (LDC) status. If graduation is granted, in 2024 Bangladesh would thus have to forego its exemption to intellectual property (IP) provisions of the World Trade Organization (WTO). Bangladesh has taken advantage of the policy space it was granted under the LDC exemption to the WTO to build a generic medicines industry that not only serves Bangladesh but also other LDCs. Under the WTO, Bangladesh will have to require patent protection of certain medicines. We draw on previous work and develop a model to examine how IP provisions in the WTO will impact the prices of insulin in Bangladesh and its subsequent impacts on wel-fare and poverty. We find that LDC graduation will trigger a significant jump in insulin prices that could cause a up to a 50 percent decline in the welfare of households with one or more members living with diabetes in Bangladesh, increasing the poverty rate of such households up to 36 percent and of those needing insulin up to 60 percent unless policy adjustments are carried out

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bluesky

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LDC graduation may cost Bangladesh $7.0b worth of exports a year
Until BD industrializes itself and depends less upon stitching garments for its economic welfare, the country should effectively resist its graduation from the LDC status.

BD remains a pre-1IR country. Stitching clothes is a pre-industrial economic activity. Since mechanized industrialization is absent, the country imports all its requirement of consumer goods. Only industrialization will cause to cover the loss in exports of post-LDC garments. So, graduation from LDC status is not right.
 
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idune

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Until BD industrialize itself and depends less upon stitching garments for its econoic welfare, the country should effectively resist its graduation rom the LDC status.

BD remains a pre-1IR country. Stitching clothes is a pre-industrial economic activity. Since industrialization is absent, the country imports all its requirement of consumer goods. Industrialization will cause to cover the loss in exports of post-LDC garments.
Exactly...
 

DalalErMaNodi

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4411084976_ccc98da6f4_b.jpg




He has taken it upon himself to negotiate our FTA with the United Kingdom.... What a great leader.



Surely this will address some of the concerns raised here for no other reason than trying to post negative data....


Meanwhile neighbours are experiencing inflation above 10 - 15% but dalals gotta do what they gotta do, Tareq won't pay otherwise.
 

Arulmozhi Varman

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Until BD industrialize itself and depends less upon stitching garments for its econoic welfare, the country should effectively resist its graduation rom the LDC status.

BD remains a pre-1IR country. Stitching clothes is a pre-industrial economic activity. Since industrialization is absent, the country imports all its requirement of consumer goods. Industrialization will cause to cover the loss in exports of post-LDC garments.
So you want BD to game the system until it develops?
 

Michael Corleone

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At this point govt is damned if they keep it least developed category and damed if they move graduate to middle income status because OP can’t decide what he really wants
Until BD industrialize itself and depends less upon stitching garments for its econoic welfare, the country should effectively resist its graduation rom the LDC status.
But stitching garments is itself an industry 🤔
Processing of raw material is all done with machines at large scale, this is no artisanal endeavor.
but I agree, we ought to keep LDC status a bit longer until new agreements are sorted out and other sectors have solid grounds for investment
 

SpaceMan18

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Lmao poor mentality of Bangaldesh , we better establish making automobiles,smartphones,popular apps etc to eventually move away from scamming garment industry.

Japan and U.S is helping us with other technologies cause they see we will have to make other stuff than clothing to smoothly shift out of LDC.


Bangaldesh can't forever be making clothing , it has to start making other high tech and quality products.

We are a small nation , we must be technologically advanced to grow our economy to the maximum.

But as usual corrupt leaders would not want to get out of LDC just for its benefits.

By 2024 other countries except us to make our own quality shît and not clothing for western brands.
At this point govt is damned if they keep it least developed category and damed if they move graduate to middle income status because OP can’t decide what he really wants

But stitching garments is itself an industry 🤔
Processing of raw material is all done with machines at large scale, this is no artisanal endeavor.
but I agree, we ought to keep LDC status a bit longer until new agreements are sorted out and other sectors have solid grounds for investment
Not middle income it's lower middle income and then middle income
 

Destranator

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So you want BD to game the system until it develops?
Every country games various systems; BD Is no exception.
In some ways BD is already gaming the system as there are countries that are behind BD in various economic/social parameters and yet not classified as LDCs.

On the other hand, the economic shock from loss of LDC status is a necessary evil as our commerce and foreign ministries are quite incompetent at their jobs. They need to up their diplomatic and trade negotiation games to keep availing trade concessions from major markets.
Until BD industrialize itself and depends less upon stitching garments for its econoic welfare, the country should effectively resist its graduation rom the LDC status.

BD remains a pre-1IR country. Stitching clothes is a pre-industrial economic activity. Since industrialization is absent, the country imports all its requirement of consumer goods. Industrialization will cause to cover the loss in exports of post-LDC garments.
Agreed.
 

SpaceMan18

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Every country games various systems; BD Is no exception.
In some ways BD is already gaming the system as there are countries that are behind BD in various economic/social parameters and yet not classified as LDCs.

On the other hand, the economic shock from loss of LDC status is a necessary evil as our commerce and foreign ministries are quite incompetent at their jobs. They need to up their diplomatic and trade negotiation games to keep availing trade concessions from major markets.

Agreed.
Well we better start making high tech stuff before its too late
 

Arulmozhi Varman

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Every country games various systems; BD Is no exception.
In some ways BD is already gaming the system as there are countries that are behind BD in various economic/social parameters and yet not classified as LDCs.

On the other hand, the economic shock from loss of LDC status is a necessary evil as our commerce and foreign ministries are quite incompetent at their jobs. They need to up their diplomatic and trade negotiation games to keep availing trade concessions from major markets.

Agreed.
India still hasn't recovered from the losses in the garment sector after LDC like status was withdrawn in 2006 or something. Back then India used to export more garment than BD and the industry was growing at an healthy pace. Now the growth has stagnated or very slowly. BD eventually would face that issue. Only one way to keep it competitive is either very low wages or automation.
 

SpaceMan18

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India still hasn't recovered from the losses in the garment sector after LDC like status was withdrawn in 2006 or something. Back then India used to export more garment than BD and the industry was growing at an healthy pace. Now the growth has stagnated or very slowly. BD eventually would face that issue. Only one way to keep it competitive is either very low wages or automation.
Lmao automation would make less jobs and we will end up with people with no jobs.

The ONLY WAY Bangladesh can graduate successfully out of LDC is to manufacture high tech products like smartphones , computers etc with quality.

Or just apps that solve current issues, Bangaldesh needs innovation not think backward.
 

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