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Graduating from the LDC framework

29 January 2010, 18:00 PM
EDITORIAL
Muhammad Zamir

Indicators are positive. Photo: Noor Alam/ DrikNews

WE have recently had an important regional conference in Dhaka -- the 'Asia-Pacific Policy Dialogue' -- on the 'Brussels Programme of Action.' It was of particular interest to me as I was closely involved on behalf of Bangladesh (as its Ambassador in Brussels) in the deliberations carried out during the Third UN Conference on the LDCs held in May 2001 in that city. The objectives of that summit meeting, attended and co-chaired at that time by the then Prime Minister Sheikh Hasina, was to ascertain how we could meet the specific needs of the LDCs and help them eradicate poverty and hunger and also improve the living standards of their people. The meeting in Dhaka, that concluded a few days ago, was jointly organised by the Bangladesh government and the UN Economic and Social Commission for Asia and the Pacific. More than 70 representatives from nearly 20 countries of this region participated along with officials from ESCAP, WTO, UNDP, WIPO, UNIDO and the ITU. The discussions focused on reducing poverty through promotion of substantial and inclusive development, promoting food security through sustainable agriculture, enhancing share of LDCs in global trade, aid and financial flows and promoting their productive capacity. There was also and exchange of views on how to best protect the environment and reduce vulnerability of the LDCs and develop their human and institutional capacities. The conference concluded with a broad- based agreement on how the LDCs of this region would address the above issues during the next LDCs conference to be convened in Turkey in 2011. Emphasis was particularly given to the need for achieving regional integration. It was felt that this measure would assist the LDCs in building their productive capability by providing them with access to larger markets and linkage with regional production chains, necessary for narrowing the development gaps. Bangladesh, in particular, rightly pointed out the need, not only for South-South, but also triangular cooperation, where regional bodies and international organisations can help strengthen the capacities of the LDCs. This approach, I believe, would be particularly helpful in harnessing the opportunities and benefits that may arise from regional and sub-regional cooperation. There was also consensus on another important point -- the need for LDC representation on the Financial Stability Board, established by the G20. This was considered necessary so that LDCs can be part of the efforts being undertaken pertaining to the reform of the international financial architecture. Similarly, there was accord on the need for LDCs being assisted through transfer of technology and finance so that they are able to adopt a new development strategy based on green growth. It was felt that such a measure would help the LDCs to overcome the acute vulnerabilities to which they had been exposed due to the international financial crisis as well as climate change. Such a view was consistent with their demands for being given priority (in the provision of resources) that were made during the COP15 Summit held in December 2009 in Copenhagen. There was also recognition of the fact that the LDCs had not been able to fully use the preferences accorded to them for lack of supply capabilities, poor infrastructure facilities and adequate resources. It was also stressed that the restrictive rules of the preferential agreements had prevented them from developing their full potential. For more reasons than one, the 11-point Dhaka Document will represent a turning point and will be expected to help in effectively addressing the development issues and challenges facing the Asia Pacific region. We now have a common prescription. We also know the areas and factors that will have to be emphasised on by our government in our dealings with our development partners in the long-term as well as in the short-term leading up to Turkey. In recent months, Bangladeshi economists have been focusing on the need for us to adopt an inclusive, comprehensive and sustainable development strategy so that we can climb the ladder and eventually exit from the LDC group and enter the lower middle income category of countries as has already been done by Sri Lanka and the Maldives. There have been differing forecasts about when such an objective might be achieved. However, there is general agreement that it needs to be sooner than later, especially if we are to re-brand our image as a country that is democratic and suitable for foreign direct investment. There is also belief that we can do it. Latest financial reports have indicated many positive factors about Bangladesh. We have made remarkable progress in macro-economic management despite a range of constraints, both internal and external. There has been acceleration of economic development, gradual decline of budget deficit and high rates of growth in both export and import. The country has posted a US$1.7 billion current account surplus in the July-November period of the current fiscal year. There has also been a steady rise of our foreign exchange reserve (which has crossed US$10 billion) thanks to the remittances received from our millions of migrant workers. Due to the prevailing international financial crisis, our GDP growth might have marginally come down to about 5.9 per cent from 6.21 per cent but, at the same time, we have been able to restrict any growth in the rate of inflation. The revenue-GDP ratio which stood at 10.92 per cent last fiscal year is also projected to be 12.2 per cent by fiscal 2012. The trend in government expenditure in the priority social sectors, like human development, building rural infrastructure and poverty reduction has also been increasing. We have also made important strides in achieving gender parity in primary and secondary education and have also reduced the child mortality rate. All these factors have helped us to improve our position within the Human Development Index. The World Bank in its 2010 trade logistics report has been critical of our poor customs clearance process and automated tracking system but has also acknowledged progress in many other areas. In fact, it has included Bangladesh in a group of 'most significant' over-performers along with China, India, Thailand, Vietnam, South Africa and the Philippines. There is no denying the fact that we are moving forward. Our present emphasis on regional connectivity should also enable us to constructively engage in the promotion of our strategic interests. We have the necessary political commitment. However, what we still need is bi-partisanship in the fulfilment of our national interest. We will achieve more within a shorter time frame if this can be juxtaposed with good governance, eradication of corruption and upholding of the due process of law. We have traveled many miles with our friends from the LDC group but time has come for us to implement our own exit strategy and part ways. This does not mean that we will be out of the mainstream of globalisation. We will still interact with the developed and the developing worlds and seek the benefit of technological assistance and investment. However, by 2021, the 50th anniversary of our independence, we must be seen not just as a poor country with potential but one that is able to function without being reliant on external aid. Muhammad Zamir is a former Secretary and Ambassador.
E-mail: mzamir@dhaka.net

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