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BANGLADESH is scheduled to graduate out of the least developed country status in November 2026. An LDC’s graduation status depends on meeting the threshold in terms of income, human asset and vulnerability (economic and environmental).

A country’s condition is assessed by the Committee for Development Policy of the United Nations triennially. The Committee also assesses whether a country has an adequate strategy for a smooth transition so that it does not face serious challenges when special support measures for LDCs are withdrawn. That is, a graduated country should not fall back into a condition akin to LDCs.

The Committee for Development Policy then recommends to the United Nations Economic and Social Commission whether a country is ready for graduation and when it should occur. A country may request a deferment based on changed circumstances. The Solomon Islands, which was scheduled to graduate in December 2024, has been granted an additional preparatory period of three years on the request of the government.

Bangladesh passed CDP’s triennial graduation thresholds in 2018, 2021 and 2024. This was hailed as a great development achievement.

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But it’s the data, stupid

SOME respectable economists and international institutions, including development partners, have highly praised Bangladesh and termed it as a role model. For example, the former UK prime minister Rishi Sunak called Sheikh Hasina a ‘role model’ for growth and said, ‘Sheikh Hasina is an inspiration to us… You are an effective leader in the economy. You serve as a wonderful role model for my two girls’.

However, as the draft white paper on the economy revealed, the fascist regime succeeded in fooling domestic and international observers largely by manipulating data to epic proportions. The white paper struggled to explain how ‘Bangladesh [was celebrated] as one of the fastest growing countries in the world’ and concluded, ‘The excess growth paradox is a figment of statistical manipulation’ (p. 8).

It is pertinent here to note that the Committee for Development Policy uses, as all other international agencies, the data supplied by the country. Supplying data that discredits a regime is just stupid.

Darrell Huff, in his 1954 book, How to Lie with Statistics, showed how manipulating statistics is not as difficult as we might think. Although statistics is about presenting hard numbers, that does not mean that they cannot be skewed or framed in a way to make the data look better to serve a certain purpose. ‘The crooks already know these tricks,’ Huff wrote.

However, Tim Hartford, the author of the 2022 book How to Truth with Statistics, noted, ‘Statistics can be used to deceive, but they are also a vital tool in our quest to understand the world around us, like a telescope for an astronomer’.

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Bangladesh’s Shakespearean dilemma

THE white paper has rightly pointed out the weaknesses in Bangladesh’s preparations for a smooth transition out of its LDC status. It notes, ‘One major concern is the lack of adequate preparation in promoting private investment to assist the country in overcoming post-LDC graduation challenges… the country runs the risk of being confronted by slower economic growth, less competitiveness, and an inability to adapt to the changing market dynamics worldwide’ (p. 135).

It also observes, ‘Bangladesh’s external trade faces critical challenges, including a gradual decline in trade orientation, limited export diversification, capital flight concerns, RMG sector issues, tariff liberalisation hurdles, and weak participation in FTAs... Unfortunately, the previous government failed to address these issues effectively, leaving Bangladesh’s external trade sector vulnerable and hindering its path toward sustained, diversified growth’ (p. 168).

The white paper is also aware of the additional challenge posed by Bangladesh’s other graduation, ie, from the World Bank’s list of low-income countries to a middle-income country (MIC) in 2015. Prior to its middle-income graduation, most loans were on highly concessional terms (p. 313). That is no longer the case.

Of course, the country can negotiate for a mix of concessional and the rates applicable for middle-income countries. However, the white paper doubts whether the country has the necessary professional capacity and institutional strength to negotiate complex borrowings (p. 322).

It also expresses concerns about the lack of a robust and credible statistical ecosystem that would be required to monitor the country’s smooth transition, identify lapses in implementation, and respond effectively with agility (p. 357). The paper remains concerned about coordinated implementation of a Smooth Transition Strategy, including the challenge of institutional and policy leadership (p. 380).

Thus, the white paper believes smooth transition ‘will require putting forward a transition plan to counteract the negative fallouts of Bangladesh’s graduation out of the LDC group and enable the required structural transformation of the economy’ (p. 380).

Yet, the white paper concludes, ‘Notwithstanding the reservations expressed by certain exporters’ groups, there is hardly any plausible reason, as of now, for Bangladesh to request a deferment of the exit date from the LDC group’ (p. 380). It posits that this is because, ‘It will not be out of place to mention that the postponement or deferment of Bangladesh’s LDC graduation date is going to invite political backlash from the expected quarters’ (p. 380).

So, the white paper fuzzily concludes, without evidence or explanations, ‘Indeed, even the recent dampened economic performance during the current fiscal year is not expected to bring the country down below the stipulated thresholds. Further, the concern raised recently about the inflated nature of certain critical indicators will have little relevance in this case’ (p. 380).

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Way out of the dilemma

SHOULD fear dictate sound public policy making? Clearly not.

Hamlet, in his famous soliloquy, is torn between perception and reality. He feels it is better to die rather than live and mutely bear the pangs that life has sent him. But he does not know what happens after death, so it seems to him that before diving deeper into the regions of the unknown and unseen, it is better to wait and see.

Instead of passive wait-and-see, the interim government can take some active measures. First, in light of massive data fudging and poor preparations by the previous regime and the downgrading of economic outlook by the World Bank and Moody’s, Bangladesh can justifiably request UN bodies such as ESCAP or CDP to do an independent assessment.

Second, it can initiate national dialogue involving all stakeholders, especially the business leaders and workers of the sectors most likely to be affected. The dialogue will discuss preparedness and work out detailed strategies for a smooth transition.

Third, the smooth transition strategy should be complemented by active industry and human resources development policies aimed at dynamic structural transformation of the economy. The interim government needs to give a clear signal that the economy cannot continue to remain in a comfort zone like an infant and never grow to be an adult. So, the government support measures for a smooth transition and economic diversification should have agreed-upon, monitorable performance indicators, as well as gradual but clear end dates.

Fourth, the interim government should request some additional period of preparations — the specific period to be determined by the outcomes of the above processes.

Fifth, the interim government should immediately act to implement reforms of the statistical ecosystem as the white paper recommended. This is critical for monitoring the transition and economic diversification strategies.

These actions will give the newly elected government — likely to be in office less than half a year before graduation — some breathing space for facing the headwinds of graduation. The newly elected government will also inherit well-developed, smooth transition and dynamic structural transformation strategies, including skill development measures.

The authors of the white paper should support the above actions, which will ensure the white paper’s domestic buy-in and will constitute an external validation of their findings, especially by the United Nations.

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Anis Chowdhury is emeritus professor, Western Sydney University, Australia. He held senior United Nations positions in New York and Bangkok.