Webinar report: Bangladesh on the Brink of LDC Graduation: An Institutional Diagnostic
As part of EDI’s Bangladesh Institutional Diagnostic, the South Asian Network on Economic Modeling (SANEM), in collaboration with Oxford Policy Management (OPM) and EDI, held the webinar “Bangladesh on the Brink of LDC Graduation: An Institutional Diagnostic” on 12 April 2021.
The webinar, which drew heavily on the findings of the Synthesis Chapter of the Diagnostic, was the last in a series, following previous webinars on the Thematic Study Chapters: banking, tax and export diversification. Hosted by SANEM in Dhaka and OPM, the event featured an introduction by the authors of the Synthesis, Dr Selim Raihan, Dr Umar Salam and Professor François Bourguignon, followed by a joint presentation by Dr Raihan and Professor Bourguignon, a discussion by a panel of distinguished experts: Professor Wahiduddin Mahmud, distinguished economist and former Minister of Finance, Professor Kunal Sen, Director of UNU-WIDER, Helsinki, and Professor Harun-ur-Rashid, former vice-chancellor of Bangladesh National University, and then a wider discussion amongst all participants.
The purpose of the webinar was both to present the findings and argument of the Diagnostic and also to apply them to future development challenges facing Bangladesh, specifically those regarding the imminent graduation from LDC status. This graduation, which received its final approval at the UN Committee for Development Policy in February 2021, will take effect in 2026 and is a recognition of the sustained developmental successes that Bangladesh has achieved over the past few decades. Yet, it also presents challenges, such as the loss of certain trading privileges and a likely increase in the cost of raising foreign funds, both of which have been important in the past. Underlying these particular issues is a more general question concerning the sustainability of Bangladesh’s growth model, heavily reliant on the growth of the Ready-made Garment (RMG) sector and on remittances, and its capacity to build on past progress in various social areas, including education, health and female empowerment. This question, the centrepiece of the Synthesis, and indeed of the Diagnostic as a whole, requires a careful analysis of the complex institutional and political economy factors that have both enabled and constrained development in Bangladesh and the main argument presented in the webinar concerned the interplay between three such factors – the ‘Deals’ environment, weak state capacity and inefficient regulation. It was argued that without significant reform in these areas, Bangladesh would struggle to diversify its export base and to finance and implement an effective industrial policy, infrastructure and the delivery of public goods. Yet, should the political will be found to achieve these reforms, there does exist a path through which Bangladesh can sustain and build upon its developmental progress.
The Diagnostic was warmly received by both the panel and general audience, with Professor Sen saying it was ‘one of the best studies’ he had seen of Bangladesh, although Professor Harun-ur-Rashid felt more credit should have been given to the government. In the debate that ensued, there was a recognition of the crucial role that institutions and institutional analysis, and so a vindication of the methods developed within the EDI programme. OPM would like to thank SANEM, and Dr Raihan in particular, for their role in organising the event and look forward to similar collaboration in the future.