Bangladesh is scheduled to leave the category of Least Developed Country (LDC) in November 2026. This significant transition follows the country’s fulfillment of all three required criteria for graduation, as assessed triennially by the United Nations’ Committee for Development Policy (CDP): Gross National Income per capita, Human Assets Index, and Economic and Environmental Vulnerability Index, which assess economic health, human development, and resilience to shocks, Bangladesh first met these criteria in 2018 and then again in February 2021, securing the final recommendation for graduation from LDC country, a classification it has held for 46 years.
Bangladesh has set several key strategic milestones in its development trajectory. In 2015, it achieved the Millennium Development Goals (MDGs), followed by the realization of a Digital Bangladesh in 2021. Looking ahead, Bangladesh targets attaining Upper Middle Income Country status by 2030, with a vision to establish a SMART Bangladesh by 2041. Additionally, the Delta Plans/Delta Goals focus on leveraging the Blue Economy to position Bangladesh as a major player in global trade by 2100. These milestones not only demonstrate Bangladesh’s achievements but also lay the groundwork for the country’s future in the post-LDC scenario.
As Bangladesh marches toward its official graduation from the LDC category in 2026, the nation faces transformative opportunities and challenges. This graduation marks a commendable leap forward, fueled by sustained economic growth and developmental strides, including notable advancements in the Information and Communication Technology (ICT) sector under Vision 2041. However, as we transition to a developing country status, the dynamics of international aid, trade preferences, and economic policies will inevitably change. It’s crucial for Bangladesh to recalibrate its strategic approach to safeguard and further propel the ICT sector’s growth.
Understanding the Post-LDC Landscape
The graduation from an LDC status brings an end to several concessions that helped burgeoning industries thrive under less stringent global market conditions. These include exemptions from certain World Trade Organization (WTO) agreements that offered competitive advantages in the international arena. For the ICT sector, which has been a cornerstone of Bangladesh’s economic strategy, this shift necessitates a robust framework to handle increased global competition and reduced trade barriers.
Strategic Vision and Economic Projections
Bangladesh’s strategic visions have laid a strong foundation for economic growth, with targets aimed at transforming the country into a Digital Bangladesh by 2021, achieving upper-middle-income status by 2030, and aspiring to become SMART Bangladesh by 2041. These milestones are not only aspirational but also aligned with pragmatic economic growth projections. By 2050, Bangladesh is set to rank as the 23rd largest global economy, showcasing its burgeoning economic strength and strategic significance in the Asian market landscape. The ICT sector, in particular, has been pivotal in this journey. For the fiscal year 2022-23, Bangladesh reported a GDP growth rate of 6.03%, with ICT as one of the primary drivers. The government’s target for ICT exports is ambitious, aiming to boost figures from US$ 1.8 billion to US$ 5 billion by 2029. Achieving this will require an orchestrated effort across various facets of the economy and policy framework.
New Challenges
The graduation from an LDC brings with it the cessation of certain international supports and preferential treatments in trade agreements. These include exemptions and concessions under the World Trade Organization (WTO) frameworks that Bangladesh has been benefited from, which cushioned and sometimes boosted the ICT sector by making the market access relatively easier and more competitive.
Intellectual Property and Innovation: The post-LDC era will demand stronger intellectual property (IP) protections to foster innovation and secure technological advancements. The unfortunate cracking of the Bijoy keyboard highlighted vulnerabilities that must be addressed through stringent IP laws and enforcement mechanisms. Moreover, funding for research and development needs significant enhancement to support homegrown technologies and innovations.
Global Market Integration: As Bangladesh prepares for more rigorous global competition, integrating with international markets become crucial. This includes not just enhancing the quality of ICT products and services but also ensuring compliance with international standards and trade regulations. The ICT sector must focus on building capabilities in high-demand areas like cybersecurity, data analytics, and cloud computing.
Trade Policy and Market Access: The graduation will recalibrate Bangladesh’s trade relationships. The nation’ needs to negotiate new trade agreements that reflect its developing status while protecting its trade interests. Market access for ICT products will depend on how well Bangladesh can leverage its geopolitical and economic position to secure favorable terms. Sectoral Reforms for Enhanced Competitiveness: Key sectors such as customs, judiciary, and technology need reforms to facilitate smoother operations of ICT businesses. Reducing si bureaucratic hurdles and improving operational efficiencies will be crucial for attracting foreign investments and partnerships.
The Roadmap for Growth
International Branding and Collaboration: To compete on a global scale, Bangladeshi ICT firms must forge alliances with international partners. This not only aids in brand building but also reduces trade and production costs through economies of scale, leading to better market competitiveness.
Revamping (C) Trade Policies: It’s crucial to negotiate and secure favorable terms in international trade agreements. We must ensure that our trade policies are robust enough to handle the pressures of global markets while supporting local industries’ growth.
Innovation and R&D Investments: Increasing funding for research and development is vital. An innovative approach backed by solid research will pave the way for advanced technological solutions and new product development, key for international competitiveness.
Fostering a Skilled Workforce: There is an urgent need to enhance the skills of our workforce to meet the demands of a burgeoning ICT industry. This involves not only technical skills but also understanding of international market dynamics, intellectual property rights, and global trade regulations.
Cybersecurity and Public Awareness: As digital adoption widens, cybersecurity becomes paramount. Public awareness campaigns and education on cyber risks and safeguards are critical to ensure that citizens and businesses can protect themselves against potential cyber threats. The impending LDC graduation is a pivotal moment for Bangladesh. It offers an opportunity to redefine the ICT sector’s trajectory towards greater innovation, competitiveness, and integration into the global economy. While challenges lie ahead, with strategic planning, investment in technology and people, and robust policy support, Bangladesh can transform these challenges into catalysts for growth. This journey requires collective efforts from the government, industry leaders, and the citizenry to ensure that the ICT sector not only survives but thrives in the post-LDC era, contributing significantly to the nation’s dream of a prosperous, technologically advanced future.
28 April, 2024. M Rashidul Hasan. The author is the CEO and managing director of Systech Digital. From The Financial Express.