Md Khorshed Alam

During LDC graduation period Bangladesh must build its capacity in meeting demands for cheaper foreign currency loans to attract more foreign direct investments.

Bangladesh will have to pass a crucial next six-year period after it has entered the developing nation groups from LDC (least developed country) status in March.

Once the country becomes a developing country the interest rates on loans from various countries and international agencies will rise. Grace periods to repay the loans will be shortened or will be unavailable. Moreover, the period for paying back loans will be reduced.

As a result foreign loan related costs are likely to push up and export market may shrink to some extent. There could be risks, particularly with new products.

Traders fear that for the old products, the cost for entering export market may rise and all sorts of duty facilities may end while new conditions may be added in the export market, in the process of the graduation. Also the foreign funds for NGOs (non-government organisations) may  go down or the funding may be stopped.

To avoid such situation the capacity and infrastructure for backward linkages industries should be developed, said Md Khorshed Alam, Director Bangladesh Textile Mills Association (BTMA) while exchanging his views with the Daily Observer.

He said in the post LDC status, the country's own financial backup must be developed with the next six years through diversifying, knowledge based high value added exports to new destinations, attracting more FDIs and enhance manpower skills that they can get high value added jobs in the international job market instead of existing low skilled and low value added jobs.

He observed that Bangladesh will have to face a number of challenges after shedding its LDC status. Failures to meet the challenges will give rise to fears that Bangladesh will lag behind.

But as six years time is a long duration so it is possible to address barriers of becoming a developing country.

He making examples of few African countries said they lagged behind due to social and regional problems despite being on the path of development.

He said there has to be more industrialization in Bangladesh particularly for increasing productions and increasing jobs. And for this Bangladesh needs to invest more in industries and mobilise internal resources.

 "Our stature will rise once we make it into the developing country list. Bangladesh's image will be brightened," he said and added, "Nobody will be able to call Bangladesh poor anymore."

 "It is a matter of pride for any country. Once this feat is achieved, a sense of relief will be created in the country," the BTMA leader added.

He said the overall banking sector needs to be more transparent and accountable in providing loans and in recovery.

Mr Alam said as Bangladeshi entrepreneurs are currently getting low cost foreign loans mainly in power generation and export based industries which amount has already crossed USD8 billion, such facilities must be protected once Bangladesh becomes a developing country.