Congratulation to Bangladesh as the country is now scheduled to become a developing nation by 2026. The ray of hope comes true from the historic resolution on the graduation of Bangladesh from the LDC category unanimously adopted by the UN General Assembly on Wednesday (November 24). Bangladesh with Nepal and Lao People’s Democratic Republic has clinched an exceptionally extended preparatory period of five years (the standard period is of three years) to enable it to be finally prepared for being a developing country. The Committee for Development Policy (CDP), a subsidiary body of the Economic and Social Council (ECOSOC), will re-evaluate the progress of the countries in 2024. Afterwards, the economic and social development of Bangladesh must continue till 2026. Otherwise, if the UN General Assembly wants, it can further delay the approval to leave the LDC status. However, we have time and resources yet to be geared up.
Obviously, it is a good lead and great news for our country and it’s time not only to welcome the immense achievement but also to start working from now to attain the desired goals until 2024 and afterwards. There are both the prospects and challenges of Bangladesh's graduation from LDC status. The major challenges for Bangladesh to be a developing county are more competitive of international trade, loss of some of the ongoing benefits such as tariff benefits that we now enjoy from India, China, Australia, USA and some other developed countries. Potentials that Bangladesh will be able to enjoy duty and quota-free benefits in the European Union (EU) market for another three years after 2026, i.e. till 2029 but the major challenges will have to be overcome from 2033 when our pharmaceutical industry will be discontinued to get duty-free benefits in the developed world. After graduation, the other major challenges would be the reduction of allocation of Development Aid, the uncertainty of the Covid-19 pandemic as such fear of cancellation of huge amount RMG orders and the Rohingya burden. These issues should be kept in consideration when formulating policies from now.
Among the first countries to recognise Bangladesh after it achieved independence in 1971 was Australia establishing its resident mission in Dhaka on 31 January 1972. Since then it has been enjoying a strong trade and development relationship with Bangladesh. Canberra shared interests in a secure, prosperous and inclusive Indian Ocean region; and support independent, sovereign and resilient state of Bangladesh which is an enormous geopolitical and economic favour for Bangladesh.
Australia and Bangladesh are pursuing new opportunities to promote trade & investment and on 15 September 2021, both the countries signed the Trade and Investment Framework Arrangement (TIFA). Under this deal, officials will meet regularly to find ways of energising economic ties and bringing down barriers to trade and commerce issues through discussion. This is the second such bilateral trade-related platform for Bangladesh as the country also signed the Trade and Investment Cooperation Forum Agreement (TICFA) with the USA in November 2013.
It is to be highlighted that TIFA is not related to the duty preference but mainly to the investment issues between Australia and Bangladesh. Such an agreement, the first of this kind between Dhaka and Canberra in the last five decades, is expected to provide a platform for institutionalised economic interactions and to open newer opportunities for doing business and dealing between the two countries. A Joint Working Group was instructed to form under TIFA, with due representations from relevant sectors and sub-sectors.
Australia is a very potential country for us for investment and it is an important export destination too. Bangladesh High Commission to Canberra depicts that Bangladesh is now the 32nd largest trade partner of Australia and the two countries’ bilateral trade has grown six times over the past decade, reaching US$2 billion from less than USD 300 million and two-way goods and services trade grew to over $2.6 billion in a decade. Dhaka’s export to Canberra is concentrated on RMG (knit and woven wears) and textile products (about 93%). Other export items are leather goods and footwear, processed food, fish, jute goods etc. Even after growing manifold in the past decade, Bangladesh’s export to Australia in 2019-20 was US$ 762.9 million, constituting 0.3% of Australia’s total import putting Bangladesh at 33 in the rank. Whereas, Bangladesh’s imports from Australia in 2019-20 was US$ 695.7 million, accounted for 0.2% of Australia’s total export, putting it at 29 in the rank. Dhaka must keep up with the trends and increase more exports to Canberra.
Australia extended the Duty-Free Quota Free (DFQF) facility to LDCs in 2003. The country believes that Bangladesh has achieved impressive economic growth in the last decade. According to the Department of Foreign Affairs and Trade (DFAT) of Australia, while challenges remain in doing business in Bangladesh, the country offers increasingly long term commercial opportunities to Australian companies operating in education services, food and beverages, agribusiness, energy and minerals. Australian businesses are well placed to provide services and equipment for energy and infrastructure developments in Bangladesh. Bangladesh’s geographic position, including its seaports, provides further economic opportunities through regional integration. DFAT reveals that weak infrastructure, shortage of skills and the governance environment are, however, key constraints to growth and doing business in Bangladesh. We need to overcome these barriers and expand more export to Australia and look for FDI from them.
1. Regular follow up of TIFA and Joint Working Group (JWG); 2. turning TIFA into free trade agreements (FTA) / preferential trade Agreements (TFA); 3. arranging Trade Exhibition Fairs of Bangladeshi products in Australia; 4. collaborating with Business associations, Chambers of Commerce & Industries both in Bangladesh and Australia to uphold a series of dialogues, seminars and roundtables on bilateral trade relations between the two nations; 5. inviting policy experts, researchers and academicians to research the above-stated issues from both countries; 6. enchaining Public Diplomacy in Australia engaging Non-Resident Bangladeshis (NRBs)/ Diaspora in Australia; 7. promoting more Bangladeshi goodwill Ambassadors in the Australian Educational Institutions through Fellowships and Scholarships; 8. expansion of online and virtual trading mechanism between the two countries; 9. promoting safer ‘Doing Business Environment’ in Bangladesh for Australian counterpart; 10. inviting Australia to set up a single self-country Economic Zone in Bangladesh and 11. tagging Australia Bangladesh Chamber of Commerce and Industry (ABCCI) in the above process.
These are some glimpses of what can be done from now to uplift the potentials of a developing Bangladesh. Such measures should also be taken as regards all the other potential countries gradually to protect against the challenges that may come in the due course.
The author is a Freelance Journalist and CEO
of Ra’dia Inc. He can be reached at: [email protected]