Context: Recently, the United Nations Committee for Development Policy (CDP) recommended the graduation of Bangladesh from the category of Least Developed Country (LDC).

• The proposal will be sent to the United Nations Economic and Social Council (ECOSOC) for endorsement in June which will be finally approved by the UN General Assembly (UNGA) in September 2020.

About

• Least Developed Country (LDC): They are low-income countries confronting severe structural impediments to sustainable development.
• LDCs are low-income countries confronting severe structural impediments to sustainable development.
• They are highly vulnerable to economic and environmental shocks and have low levels of human assets.
• There are currently 46 countries on the list of LDCs which are reviewed every three years by the Committee for Development (CDP).
• Elimination of Bangladesh out of LDC: A country must achieve at least two of the three criteria at two consecutive triennial reviews to be considered for graduation.
• Bangladesh fulfilled all three eligibility criteria in terms of per capita income, human assets and economic and environmental vulnerability.
• It also fulfilled all the criteria necessary for its elevation to a developing country in 2018.
• Bangladesh will get time up to 2026 to prepare for the transition to the status of a developing country.
• Usually, countries are given three years for transition but this year due to the Corona pandemic, Bangladesh has been given five years for the process.

Impacts of Graduation from LDC

• Graduation from LDC has a double-edged impact on countries.
• Negative: Certain preferential provisions in export, provision of subsidy to agriculture and infant industries and access to climate finance are likely to cease after transitioning from LDC.
• Positives: Enhanced confidence of international financial bodies, improved credit rating and higher FDI is expected to benefit Bangladesh after the transition period is completed.