#1Public Dialogue on Bangladesh's Graduation from the LDC Group Pitfalls and Promises Session Three: Graduating in a Brave New World Bangladesh's Pursuit of the 2030 Agenda Will It Facilitate Smooth Transition after LDC Graduation? Presented by Dr Fahmida Khatun Executive Director, CPD 10 March 2018: Dhaka POLICY DIALOGUE CENTRE FOR www.cpd.org.bd#2Bangladesh's Pursuit of the 2030 Agenda: Will It Facilitate Smooth Transition After LDC Graduation? Organised by CENTRE FOR POLICY DIALOGUE Presented by Dr Fahmida Khatun Executive Director, CPD Dhaka: 10 March 2018#3Study Team Dr. Fahmida Khatun Executive Director, CPD Shahida Pervin Senior Research Associate, CPD Masudur Rahman Former Research Associate, CPD For citation Khatun, F. Pervin, S. and Rahman, M. 2018. Bangladesh's pursuit of the 2030 Agenda: Will it facilitate smooth transition after LDC graduation?. In: Bhattacharya, D. ed., Bangladesh's Graduation from the Least Developed Countries Group: Pitfalls and Promises. London: Routledge. (Forthcoming) Bangladesh's Pursuit of the 2030 Agenda 3#4Contents 1. Context 1.1. Literature Review 2. Objectives 3. Methodology and Data Analysis 4. Findings on SDG Linkages 5. Granger Causality and Correlation Analysis 6. Recommendations Bangladesh's Pursuit of the 2030 Agenda 4#5. . CENTRE FOR DIALOGUE 1. Context Bangladesh will cross a number of milestones during its implementation of the 2030 Agenda for Sustainable Development. • The first five years of the SDGs coincide with the last five years of implementation of the Istanbul Programme of Action (IPOA) for the least developed countries (LDCs) for the 2011-20 period, which aims to halve the number of LDCs by 2020. . . . Bangladesh is expected to become eligible for graduation given its progress in gross national income (GNI) per capita and Human Assets Index (HAI). While implementing various global agendas, Bangladesh has to be mindful about possible implications of pursuing one agenda for the achievement of other agendas. On the face of it, efforts towards SDG implementation may facilitate graduation since several objectives of the IPOA and the SDGs have commonalities (UN-OHRLLS, 2016). Many of the SDGs are also similar to Bangladesh's objectives for the medium term outlined in its Seventh Five Year Plan (7FYP) for 2016-20 period. Bangladesh's Pursuit of the 2030 Agenda 5#6• . CENTRE FOR DIALOGUE 1.1 Literature Review Allen, Metternicht and Wiedmann (2017) feel that the success or failure of the SDGs, to a large extent, will rely upon their implementation at the national level. • The Commonwealth Secretariat (2016) reiterates that the goals and targets of the SDGs provide an important opportunity to realise the work plan set out in the IPOA. • GoB has undertaken alignment exercise between the SDGs and the 7FYP (GED 2016). • . UNDP conducted a rapid integrated assessment of Cambodia's National Strategic Development Plan and relevant sector plans and strategies. Coherence and synergy between the SDGs and the IPOA have been explored in UN-OHRLLS (2016). Using network analysis, Le Blanc (2015) suggested that the implementation of one SDG may help implement other connected SDGs. Bangladesh's Pursuit of the 2030 Agenda 6#7CENTRE FOR CY DIALOGUE 2. Objectives • The broad objective of this chapter is to examine whether Bangladesh's pursuit of the SDGs can facilitate smooth transition after LDC graduation. • The specific research questions are: • How are the SDGs and LDC graduation criteria linked? ➤ What are the linkages between the SDGs and IPOA priority areas? ➤ How aligned are Bangladesh's national policies with the SDGs? ➤ Based on the findings, what policy recommendations can be made regarding the alignment of Bangladesh's national policies with the SDGs to facilitate smooth transition after LDC graduation? By addressing these questions, the study reviews the linkages between the SDGs and LDC graduation criteria as well as the IPOA. • Most importantly, the study examines how Bangladesh's national policies are informed by the SDGs and the LDC graduation process. Bangladesh's Pursuit of the 2030 Agenda 7#8CENTRE FOR DIALOGUE 3. Methodology and Data Analysis Three methods were adopted to answer the research questions: ✓ Matching exercises to examine which SDG targets are aligned with the LDC graduation criteria, the IPOA and the national policies. ✓ Network analysis to map the linkages between the SDGs and LDC graduation criteria, the IPOA and the national policies. ✓ Econometric exercise to determine the directions and strengths of relationships between the indicators of SDG targets and LDC graduation criteria identified in the network analysis. Bangladesh's Pursuit of the 2030 Agenda 8#9CENTRE FOR DIALOGUE 4. Findings on SDG linkages Major findings of the Network Analysis are the following: ● Out of 17 SDGs, 16 goals have direct and indirect similarity with the graduation criteria (Figure 1). A total of 50 SDG targets were found to be related with the seven key areas "graduation-plus" - of UNCTAD's strategies for graduation with momentum rural transformation; industrial policy; science, technology and innovation (STI) policy; development finance; macroeconomic policies; and employment generation (Figure 2). Figure 1: Number of SDG targets under each graduation criterion SDG 5 SDG 4 SDG 3 SDG 7 SDG 8 SDG 6 HAI GNI 17 EVI SDG 9 SDG 10 SDG 11 SDG 12 SDG 13 SDG 2 SDG 14 SDG 1 SDG 15 SDG 17 Bangladesh's Pursuit of the 2030 Agenda Source: Prepared by authors based on UN (2015) and UN DESA (n.d.). 9#10CENTRE FOR DIALOGUE 4. Findings on SDG linkages Figure 2: Network of key areas for graduation with momentum and SDG targets 16.4 17.16 1.a 17.3 14.a 8.10 Development finance 17.8 STI policy 17.1 7.b Industrial policy 8.6 8.b 4.4 9.5 9.b 17.9 17.14 Employment generation (8.5 8.8 4.6 Gender (4.5 5.a 5.5 5.c 5.1 9.3 7.a Bangladesh's Pursuit of the 2030 Agenda 17.13 17.15 Macroeconomic policies 17.19 Rural transformation 6.6 6.5 9.a 10.b Source: Prepared by authors based on UN (2015) and UNCTAD (2016). 10 10#11• CENTRE FOR CY DIALOGUE 4. Findings on SDG linkages The first LDC graduation criterion GNI (Figure 3) has connection with: ✓ 17 targets of SDG 17 ✓ 11 targets of SDG 8 ✓ 8 targets of SDG 9 ✓ 5 targets of SDG 10 ✓ 4 targets from each of SDG 7 and SDG 12 ✓ 3 targets of SDG 2 ✓ 2 targets from each of SDG 4 and SDG 5, and ✓ 1 target from each of SDG 1, SDG 3, SDG11 and SDG 14 Bangladesh's Pursuit of the 2030 Agenda 11#12CENTRE FOR DIALOGUE 4. Findings on SDG linkages Figure 3: Network of LDC graduation criteria and SDG targets 8.b 8.1 8.2 8.3 7.b 7.a 5.b 15.1 14.b 15.2 1.5 11.b 2.5 14.2 Share of agriculture Instability of agriculture Victims of disaster 12.8 14.1 4.4 1.a .a 6.6 8.4 GNI 8.5 8.6 8.9 8.10 9. 9.3 10.6 10.0 10.7 12.2 2.a 17.1917.1717.16 17.1417.177.917.8 Bangladesh's Pursuit of the 2030 Agenda 9.1 9.2 Remoteness Merchandise export 17.10 17.11 17.12 8.a 9.b 10.a EVI Instability of exports 11.5 13.b 13.3 Coastal zones 4.6 Adult Literacy 10.4 Population undernourished 4.1 Secondary enrolment HAI Under-five mortality 17.2 3.2 6.2 3.8 Source: Prepared by authors based on UN (2015) and UN DESA (n.d.). 12#13• . CENTRE FOR DIALOGUE 4. Findings on SDG linkages GNI has stronger connections with partnerships (SDG 17), inclusive and sustainable economic growth (SDG 8), industry, innovation and infrastructure (SDG 9), and reducing inequality among the countries (SDG 10). • HAI is connected with SDG 3 and SDG 4 through 4 targets from each goal; with SDG 1 through 3 targets; and with SDG 2, SDG 6 and SDG 10 through 2 targets from each goal. It shows that, good health and well-being (SDG 3) and quality education (SDG 4) have stronger connections with LDC graduation criterion HAI. . EVI is connected with 5 targets from each of SDG 2 and SDG14; with 4 targets of SDG 13; with 3 targets from each of SDG 9, SDG 15 and SDG 17; with 2 targets from each of SDG 11 and SDG 12; with one target from each of SDG 1, SDG 6, SDG 8 and SDG 10. It shows zero hunger (SDG 2), life below water (SDG14), climate action (SDG13), industry, innovation and infrastructure (SDG 9) and life on land (SDG 15) have strong connections with the EVI criterion. Bangladesh's Pursuit of the 2030 Agenda 13#14• CENTRE FOR DIALOGUE 4. Findings on SDG linkages A detailed matching exercise comparing the IPOA priority areas and SDGS indicates that 83 SDG targets have potential linkages with goals, targets and selected actions of 8 priority areas of the IPOA (Figure Figure 4: Network of IPOA priority areas and SDG targets 4). 10.b 17.4 External debt FDI ODA 10.c 17.2 Source: Prepared by authors based on UN (2015 and UN-OHRLLS (2016) Bangladesh's Pursuit of the 2030 Agenda Energy 7.b 8.6 8.5 8.b 4.4 Youth development 54 Remittances 10.4 9.2 9.3 12.2 Mobilising financial resources 1.3 4.3 17.1 Private sector development Domestic resource mobilisation 16.5 Good governance Social protection 16.10 11.1 Education and training Shelter 4.5 4.a 5.a Productive capacity Infrastructure 11.2 9.1 1.4 Human and social development Science 17.10 17.12 IPOA 5.1 Gender equality 17.11 Trade 3.7 9.c 10.a 17.8 8.a 8.2 2.b 5.b 5.c Population and health 2.1 Agriculture Commodities 2.2 Water and sanitation 2.c Multiple crises and challenges 6.4 2.3 5.6 3.b 2.a 9.b Economic shocks 3.3 3.2 Disaster risk reduction Climate change 6.1 14#15CENTRE FOR DIALOGUE 4. Findings on SDG linkages • In case of matching with national policies, six SDG targets match completely with national policies and falls in the 'fully overlapping' category, 40 SDG targets are 'partially overlapping, 37 targets do not match directly with national policies but 'overlap in essence, 21 SDG targets are in the 'no target in 7FYP' category and another 26 targets are 'global in nature' category whose implementation requires global initiatives (Figure 5). Bangladesh's Pursuit of the 2030 Agenda 15#16CENTRE FOR DIALOGUE 4. Findings on SDG linkages Figure 5: Linkages among SDG targets reflected in 7FYP, LDC graduation criteria, graduation with momentum and the IPOA Partially Overlapping EVI 8.9 12.c GNI 17.11 8.8 1.1 9.2 1.5 13.1 1.2 10.c 4.6 7.1 7.3 17.1 4.5 HAI 4.a 5.b 4.1 3.8 6.2 1.3 2.2 16.6 16.5 15.9 IPOA 11.1 6.3 5.2 Bangladesh's Pursuit of the 2030 Agenda 3.7 4.4 3.3 4.3 9.5 17.13 1.b Graduation with momentum 5.a 8.6 5.1 5.c 5.5 Source: Prepared by authors based on UN (2015), UNCTAD (2016), UN DESA (n.d.), UN-OHRLLS (2016) 16#17CENTRE FOR DIALOGUE 4. Findings on SDG linkages Figure 5: Linkages among SDG targets reflected in 7FYP, LDC graduation criteria, graduation with momentum and the IPOA Overlapping in Essence 15.3 15.2 14.4 14.2 14.1 13.3 HAI EVI 17.17 12.b 10.2 GNI 10.1 8.3 11.5 1.a 15.1 3.c 2.a 2.4 2.b 6.6 12.2 2.3 10.4 2.1 16.10 16.3 IPOA 9.c 9.3 2.c 11.2 5.3 5.6 Bangladesh's Pursuit of the 2030 Agenda 17.3 6.5 Graduation with momentum 8.5 10.b 7.b 6.4 Source: Prepared by authors based on UN (2015), UNCTAD (2016), UN DESA (n.d.), UN-OHRLLS (2016) 17#18CENTRE FOR DIALOGUE 4. Findings on SDG linkages Figure 5: Linkages among SDG targets reflected in 7FYP, LDC graduation criteria, graduation with momentum and the IPOA Fully Overlapping HAI 6.1 3.2 3.1 Bangladesh's Pursuit of the 2030 Agenda IPOA EVI (13.2) GNI 7.2 8.1 Source: Prepared by authors based on UN (2015), UNCTAD (2016), UN DESA (n.d.), UN-OHRLLS (2016) 18#19CENTRE FOR IALOGUE 4. Findings on SDG linkages Figure 5: Linkages among SDG targets reflected in 7FYP, LDC graduation criteria graduation with momentum and the IPOA SDG is global in nature No target in 7FYP HAI EVI 13.b 10.a 8.a 3.b 17.12 IPOA 17.7 17.6 17.10 GNI 14.7 12.1 17.16 17.5 9.b 17.19 17.9 8.b 16.8 11.c 15.b 9.a 17.8 Graduation with momentum 12.8 16.7 14.6 14.b EVI 11.b 2.5 9.1 8.2 8.4 10.7 GNI 17.14 8.10 9.4 7.a 17.4 17.15 14.a 17.2 16.1 IPOA 1.4 Garduation with momentum 16.a 16.b 15.a 5.4 11.a 16.4 Source: Prepared by authors based on UN (2015), UNCTAD (2016), UN DESA (n.d.), UN-OHRLLS (2016) Bangladesh's Pursuit of the 2030 Agenda 19#20CENTRE FOR LOGUE Empirical Analysis ● . 5. Granger Causality and Correlation analysis Network analysis in the previous section provides visual representations of SDGs' linkages with LDC graduation criteria, but it is unclear whether they are mutually reinforcing or hinder each other's objectives. Empirical analysis has the potential to improve understanding of the directions and strengths of linkages between the SDGs and LDC graduation criteria if comprehensive data for various indicators are available. This section presents the results of Granger causality and pairwise correlation tests between a number of SDG indicators and LDC graduation criteria for which data are available for the 1990-2015 period for Bangladesh. Bangladesh's Pursuit of the 2030 Agenda 20#21CENTRE FOR DIALOGUE Major Findings 5. Granger Causality and Correlation analysis There is significant causality and correlation between 8 SDG indicators and GNI per capita graduation criteria. SDG indicator 2.a.2 on 'disbursement of project aid to agricultural sector' has a two-way causal relationship (Figure 6). • Three indicators such as 'total airports passenger movement (SDG indicator 9.1.2)', 'total revenue as percent of GDP' (SDG indicator 17.1), and 'proportion of domestic budget funded by domestic taxes' (SDG indicator 17.1.2) are positively related to the GNI per capita graduation criterion. ‘Average per employee constant GDP' (SDG indicator 8.2.1), ‘industry, value addeď (SDG indicator 9.2.1) and ‘manufacturing employment as a proportion of total employment' (SDG indicator 9.2.2) cause GNI per capita positively. Bangladesh's Pursuit of the 2030 Agenda 21#22CENTRE FOR DIALOGUE 5. Granger Causality and Correlation analysis Figure 6: Causal directions between and correlation of the GNI per capita criterion and SDG indicators Personal remittances, received (% of GDP) (17.3.2) Disbursement of project aid to agricultural sector (US$ Million) (2.a.2) Average per employee constant GDP Tk. (8.2.1) Tax revenue % budget (17.1.2) Source: Authors' elaboration based on empirical estimations. Bangladesh's Pursuit of the 2030 Agenda 0.332 0.476 0.132 0.546 GNI per capita 0.332 0.741 0.194 0.032 Air passengers (000) (9.1.2) Total revenue % GDP (17.1.1) Manufacturin g employment Industry, value added (% of GDP) (9.2.1) % total (9.2.2) 22#23CENTRE FOR DIALOGUE 6. Recommendations Two key recommendations for Bangladesh can be drawn from the Network Analysis: • • Bangladesh should pursue global and national objectives simultaneously due to the various linkages between and among many of their indicators ✓ Equal efforts should be put into all global and national commitments. Bangladesh must pay attention to SDG targets that are not reflected in its national and sectoral policies for smooth transition after LDC graduation. Bangladesh's Pursuit of the 2030 Agenda 23#24CENTRE FOR LOGUE 6. Recommendations Five recommendations can be derived from Empirical Analysis: 1) Bangladesh should put continuous efforts into increasing the inflow of remittances by ✓ Developing of the skills of potential migrants ✓ Facilitating and supporting the migration process ✓ Making better arrangements with host countries ✓ Facilitating better use of migrants' earnings ✓ Supporting the foreign exchange market. 2) Aid utilisation should be channeled towards employment generation and productivity enhancement within the sector. 3) The aviation sector should be developed. ✓ Apart from the development of modern and bigger airports, shortcomings in luggage handling, security and management need to be addressed. Bangladesh's Pursuit of the 2030 Agenda 24 24#25CENTRE FOR LOGUE 6. Recommendations Five recommendations can be derived from Empirical Analysis: 4) The industrial sector needs supportive measures, including fiscal policies and technical support, to boost employment generation and productivity. 5) Efforts should be geared towards increasing GNI per capita, which will subsequently increase tax revenue. ✓ These efforts should be coupled with other measures including broadening the tax base, curtailing tax evasion, strengthening institutions and ensuring good governance. Bangladesh's Pursuit of the 2030 Agenda 25#26Thank you