[🇧🇩] LDC Graduation For Bangladesh

[Saif]

Date of Event: Nov 11, 2024

Source : https://thefinancialexpress.com.bd/economy/bangladesh/bangladesh-prioritises-smooth-ldc-graduation-says-salehuddin Short Summary: Monitoring the events towards LDC graduation.

Bangladesh prioritises smooth LDC graduation, says Salehuddin
FE ONLINE DESK
Published :
Nov 10, 2024 22:28
Updated :
Nov 10, 2024 22:28

Adviser to the interim government on the Ministries of Finance and Commerce Dr Salehuddin Ahmed has said Bangladesh is prioritising to ensure smooth and sustainable graduation from the Least Developed Country (LDC) category.

“Bangladesh will prioritise smooth graduation from LDC. It will not happen suddenly.

It will happen at a reasonable time. The graduation will be in the interest of Bangladesh, in the interest of the people,” he said.

Salehuddin came up with the comments while speaking at the negotiation launching ceremony of the Bangladesh-Singapore Free Trade Agreement (FTA) at the Ministry of Commerce in Dhaka on Sunday, reports BSS.

“The decision will be taken considering the situation that can be overcome easily,” he said about the country’s graduation from the LDC.

Salehuddin said the government will take initiatives to sign FTA with as many countries as possible.

He mentioned that Singapore is a potential country for Bangladesh's trade expansion. “In addition to products, there is also the possibility of developing Bangladesh's relations with Singapore in the service and investment sectors,” he added.

He said the initiative to sign a FTA has been taken initially with an aim to increase the trade and investment between the two countries.

High Commissioner of Singapore in Dhaka Derek Loh said that Bangladesh, especially Chattogram, is very important for Singapore due to its geographical location.

Singaporean shipping company PSA is investing in Chattogram Terminal, which will become a major international port through Bay-Terminal Transformation, he added.

Based on this, the trade between the two countries will increase, he opined.

Chief adviser’s Special Envoy on International Affairs Lutfe Siddiqui, Bangladesh Investment Development Authority (BIDA) Executive Chairman Chowdhury Ashik Mahmud Bin Harun and Secretary of the Ministry of Commerce Md Selim Uddin, among others, spoke on the occasion.

Earlier, Singapore’s High Commissioner Derek Loh had a courtesy call on Salehuddin Ahmed in his secretariat office​

 

[Saif]

LDC GRADUATION: Bangladesh’s to be or not to be moment

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)...

www.newagebd.net

LDC GRADUATION: Bangladesh’s to be or not to be moment
Anis Chowdhury 14 January, 2025, 00:00

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.

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’.

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).

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.

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

 

[Saif]

Is deferment of LDC graduation a viable option for Bangladesh?

Bangladesh’s best course of action would be to prepare for smooth and sustainable graduation from the LDC group.

www.thedailystar.net

Is deferment of LDC graduation a viable option for Bangladesh?

Visual: Anwer Sohel

As may be recalled, Bangladesh is set to graduate from the Least Developed Country (LDC) category on November 24, 2026. However, some stakeholders in the country argue for a deferment of this graduation for an unspecified period. An objective analysis of the issue and an assessment of the veracity of these divergent views hold practical significance in shaping Bangladesh's stance in this context.

Some clarity in this regard is necessary. While specific criteria exist for including a developing country in the LDC group, it is ultimately up to the concerned country to decide whether it wants to be categorised as such. On the contrary, graduation from the group is contingent upon the LDC meeting the graduation thresholds and fulfilling the graduation procedures. In this sense, inclusion in the LDC group is "voluntary," while graduation is somewhat "mandatory."

To reinforce this point, in 2006, Zimbabwe rejected the UN Committee for Development Policy's (CDP) determination to categorise it as an LDC, stating that it "refuses to be downgraded as an LDC." On the other hand, as noted above, there is a defined procedure for an LDC's graduation. An LDC must meet the criteria for graduation and sustain the record over two successive triennial reviews conducted by the CDP. The CDP then recommends the LDC in question to the UN Economic and Social Council (ECOSOC) for graduation. Based on these recommendations, and following consultations and deliberations, the UN General Assembly (UNGA) makes the final decision regarding the graduation of the concerned LDC and the effective date of the decision. For Bangladesh, the UNGA decided that its graduation would take effect on November 24, 2026 (alongside Nepal and Lao PDR).

It is worth noting that the graduation of LDCs has been deferred in the past, even when eligibility for graduation was met. For instance, the graduation of several Pacific Island LDCs (e.g., Small Island Developing States such as Vanuatu and Kiribati) was deferred multiple times due to their vulnerability to environmental challenges. These countries were eligible for graduation primarily based on the "income-only" criteria. Similarly, Nepal, which first met the graduation criteria in 2015 (three years before Bangladesh), will graduate simultaneously with Bangladesh, as it was not recommended for graduation in 2018 due to the 2017 earthquake.

Understandably, the call for Bangladesh's graduation deferment is being led by the export-oriented RMG sector, which accounts for about 85 percent of the country's total exports. The implications of the loss of preferences for this sector and the country are significant. Since tariffs on apparel items in major markets range from 10-15 percent, the adverse impact of preference erosion on RMG competitiveness will undoubtedly be considerable. Deferment of graduation would allow Bangladesh to continue enjoying various "Special and Differential" treatment provisions in the World Trade Organization (WTO), specifically targeted at LDCs.

Indeed, among the LDCs, Bangladesh has benefited the most from preferential treatment due to its relatively higher supply-side capacities compared to most other LDCs. Not surprisingly, the country also stands to lose the most in the absence of such preferences. WTO estimates (2020) show that of the potential losses from preference erosion (in terms of foregone export earnings) for the 12 LDCs eligible for graduation at the time, 90 percent would be incurred by Bangladesh alone.

While it is conceivable that the government might, at some future point (before the November 2026 deadline), decide to request a deferment of graduation, such a request would need to be strongly justified. The CDP will closely monitor and assess the smooth transition process. Ultimately, the UNGA must be convinced of the validity of the request.

In the end, any request for deferment must also be seen as a "political call" that Bangladesh must weigh carefully. Nepal and Lao PDR are progressing towards graduation without considering deferment, while Bhutan graduated in December 2023 without seeking a deferral. Should Bangladesh choose deferment, it will be the only South Asian country, aside from war-ravaged Afghanistan, to remain an LDC beyond 2026. Is this a position Bangladesh would find acceptable?

In this context, Bangladesh's best course of action would be to prepare for smooth and sustainable graduation from the LDC group. Bangladesh has already developed a "Smooth Graduation Strategy," with concrete recommendations from seven sub-committees, awaiting approval by the National Committee on Graduation. According to the most recent triennial review by the CDP (February 2024), Bangladesh's eligibility for graduation has been reaffirmed, and as noted in the white paper committee report, "there is hardly any plausible reason, as of now, for Bangladesh to request a deferment of the exit date from the group." However, the white paper also highlights concerns about the coordinated implementation of the strategy, including challenges related to institutional and policy leadership. These concerns must be addressed with urgency and within a time-bound framework.

To this end, Bangladesh should focus on necessary reforms and structural transformations to ensure smooth and sustainable graduation. Trade policies, incentives, and import duties should be scrutinised to ensure compliance with global obligations associated with graduation. The country must transition from preference-based competitiveness to one based on skills and productivity. Adequate measures should be taken to ensure compliance with Trade-Related Aspects of Intellectual Property Rights (TRIPS) obligations, the Trade Facilitation Agreement, and other WTO-mandated agreements applicable to non-LDC developing countries. Compliance with International Labour Organization (ILO) conventions and protocols must also be ensured and enforced. Comprehensive Economic Partnership Agreements (CEPAs) should be negotiated, and "offensive" and "defensive" strategies should be designed appropriately in view of this. In the absence of membership in such trading partnerships and groupings, Bangladesh may find itself in a situation where it will need to export on a non-preferential basis, while its competitors, such as India, Pakistan, Vietnam, China and Cambodia, will enjoy preferential access to many markets (thanks to bilateral and regional free trade agreements and CEPAs to which these countries are members).

The global trading landscape is evolving rapidly, with an increased emphasis on greening trade, enhanced compliance requirements, and stricter environmental, gender and labour standards. Many of these requirements are being demanded not only by governments but also by brands, buyers, advocacy groups, and consumers.

Bangladesh's priorities must focus on domestic preparations and the implementation of its smooth graduation strategy. Reforms and structural changes must be implemented, the capacity to access regional and global markets from a position of strength must be enhanced, compliance with the newly emerging global trading regime must be ensured, and triangulation of transport, investment and trade connectivity must be established.

The discussion on deferring Bangladesh's LDC graduation should not divert attention from undertaking the urgent tasks required to address the challenges of smooth graduation and ensure its sustainability. Gaining a few additional years (if at all) must not serve as an excuse to avoid taking the necessary steps. Bangladesh's policy measures and implementation efforts must be aligned with the new and upcoming phase of its journey as a non-LDC developing country.

Dr Mustafizur Rahman is distinguished fellow at the Centre for Policy Dialogue (CPD).​

 

[Saif]

WTO to support Bangladesh’s LDC graduation, its DG tells Dr Yunus

World Trade Organisation (WTO) Director General Dr Ngozi Okonjo-Iweala on Friday said the global trade body would help Bangladesh graduate smoothly from Least Developed Country (LDC) and persuade top businesses to shift their supply chains to the South Asian nation. The WTO Director General made t

thefinancialexpress.com.bd

WTO to support Bangladesh’s LDC graduation, its DG tells Dr Yunus
UNB
Published :
Jan 24, 2025 21:19
Updated :
Jan 24, 2025 21:19

World Trade Organisation (WTO) Director General Dr Ngozi Okonjo-Iweala on Friday said the global trade body would help Bangladesh graduate smoothly from Least Developed Country (LDC) and persuade top businesses to shift their supply chains to the South Asian nation.

The WTO Director General made the comments when she met Chief Adviser Prof Muhammad Yunus on the sidelines of the World Economic Forum annual meeting in the Swiss mountain city of Davos.

Referring to Bangladesh’s impending graduation from the LDC category, Dr Ngozi said that the WTO would make sure that the process is smooth.

“We have established principles. We will be working with you,” Chief Adviser’s Deputy Press Secretary quoted her as saying.

The WTO DG also said she was talking with top global businesses and trying to persuade them to relocate their supply chains to Bangladesh as part of global logistic decentralisation.

“I told them, why not Bangladesh? We are doing more pushes to have more supply chains in Bangladesh,” she added.

Chief Adviser Prof Yunus praised the leadership of Dr Ngozi, saying she has brought dynamism to the global trade talks.

Dr Yunus also said Bangladesh is now open for business, after the misrule and oligarchs-linked business deals ruined the country’s economy.

He said Bangladesh can easily be one of the largest manufacturing hubs with millions of young and tech-savvy skilled workers.

The Chief Adviser said the interim government was carrying out vital reforms in the economy and eased congestion in Chittagong Port in an effort to attract more foreign investment.

“We’ve also launched a fight against corruption,” he said, adding people linked with the ruling family were involved in corrupt international deals.

Dr Ngozi said she was impressed by the spirits of the young protesters during the July mass uprising. “They have set an unprecedented example sending the most impactful messages.”

She also praised the leadership of Professor Yunus in bringing stability to the country and putting Bangladesh back on the global map. “You are an image of stability. And stability and calm have returned to Bangladesh.”

During the talks at a Davos hotel, Dr Ngozi urged Bangladesh to ratify the fisheries subsidy agreement. Bangladesh will look into it, the Chief Adviser said.

On Dr Ngozi’s request on the Fish-2 agreement, Ambassador Tareq Md Ariful Islam, Bangladesh’s Permanent Representative to the UN in Geneva, said Bangladesh is constructively engaging in its negotiation.

Dr Ngozi also requested Bangladesh to facilitate other instruments under negotiation at the WTO, including the investment facilitation for development agreement.

Lamiya Morshed, SDGs Affairs Principal Coordinator, also attended the meeting.​

 

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Defer LDC graduation by 3 years: BCI

The government should take steps to defer Bangladesh’s United Nations status graduation from a least developed country (LDC) to a developing one by at least three years, said the Bangladesh Chamber of Industries (BCI) yesterday.

www.thedailystar.net

Defer LDC graduation by 3 years: BCI

The government should take steps to defer Bangladesh's United Nations status graduation from a least developed country (LDC) to a developing one by at least three years, said the Bangladesh Chamber of Industries (BCI) yesterday.

"We are not ready for LDC graduation right now. Why should we consciously commit suicide?" said BCI President Anwar-ul Alam Chowdhury at a press briefing organised by the BCI in the capital.

He also shared his concerns over the country's economic challenges and business climate.

Chowdhury alleged that the previous Awami League government pursued the LDC graduation based on inflated economic figures in order to portray an achievement.

"If the graduation is not deferred, the economy will face a massive collapse," he said.

The garment and textile sector, which accounts for 40 percent of manufacturing employment and contributes roughly 85 percent of exports, will bear the brunt of the challenges, he added.

Chowdhury said Vietnam would enjoy zero-tariff access to the European Union from 2027, while European importers of Bangladeshi garments would face a 12 percent duty from 2029.

"We strongly believe that the graduation period should be deferred by at least three more years," he said.

Other business platform earlier also recommended the deferment.

But Education and Planning Adviser Wahiduddin Mahmud had pointed out that Bangladesh had no option to adopt the deferment.

Members of a committee which prepared a white paper on the state of Bangladesh's economy also advised the government not to defer the LDC graduation.

About the current economic situation, Chowdhury alleged that the incumbent government was trying to steer the country based on the International Monetary Fund's (IMF) prescriptions.

"It will not suit the nation's existing economic conditions," he said.

Bangladesh Bank has adopted contractionary policies, reduced liquidity, and taken "unfavourable" steps for the economy, industries, and businesses, he said.

"While partial adherence to IMF prescriptions can help meet compliance requirements, full implementation will adversely impact the economy," said Chowdhury.

The BCI president criticised the government for "not prioritising economic reforms".

"High-interest rates, contractionary monetary policies, unresolved energy crises, and potential fuel price hikes clearly show the government's approach is not supportive of industrial growth," Chowdhury said.

He warned that such policies would not only deter new investments but also make survival difficult for existing industries.

On the political front, Chowdhury expressed disappointment over a lack of focus on economic issues.

"The government and political parties have overlooked pressing economic issues and the challenges faced by businesses, diverting their attention to less critical priorities," he claimed.

He also urged the interim government to expedite the electoral process to stabilise the political climate.

Chowdhury pointed to recent statements by Bangladesh Bank Governor Ahsan H Mansur and Finance Adviser Salehuddin Ahmed downplaying the impacts of rising interest rates and VAT hikes, labelling them as "misleading".

He criticised the government's decision to increase reliance on VAT hikes instead of expanding the tax net.

"Such measures are creating confusion among industrial entrepreneurs, who are already grappling with rising costs and operational uncertainties," he said.

Chowdhury also raised concerns about branding entrepreneurs as classified or defaulters without considering the systemic challenges they face.

"The burden of banking irregularities caused by a few individuals or groups is being unfairly placed on the shoulders of all entrepreneurs. Many defaulters are victims of rising operational costs and adverse conditions," he said.

Calling for the introduction of bankruptcy laws, Chowdhury added, "If the government fails to provide protection, entrepreneurs will be forced to shut down their businesses. This gap in legal infrastructure must be urgently addressed."

BCI Senior Vice-President Priti Chakraborty and directors Shahidul Islam, Delowar Hossain, S M Shah Alam, and Zia Hayder were present.​

 

[Saif]

High external trade costs should be reduced for LDC graduation

EXTERNAL trade costs, the costs incurred in trading in goods and services internationally in addition to the price for which producers sell the goods and services, are significantly high. They are also higher than such costs in India, Malaysia, Vietnam and Singapore. Such high costs of external...

www.newagebd.net

High external trade costs should be reduced for LDC graduation
29 January, 2025, 00:00

EXTERNAL trade costs, the costs incurred in trading in goods and services internationally in addition to the price for which producers sell the goods and services, are significantly high. They are also higher than such costs in India, Malaysia, Vietnam and Singapore. Such high costs of external trade — which cover the cost of transport, taxes, infrastructure, communications, foreign exchange, insurance, customs clearance and trade documentation — work as a curb on import and export. A former Trade and Tariff Commission member, who delivered the keynote speech at a seminar on ‘reforms in customs, income tax and value-added tax management to address LDC graduation challenges’ that the Economic Relations Division organised in the National Economic Council conference room in Dhaka on January 27, blamed delayed customs clearance, lack of competence and improper logistic services and poor trade and transport infrastructure for the high external trade costs, noting that the overall export could increase by 7.4 per cent if the time needed for customs clearance would be cut by a day and the easing of customs procedures could boost the competitive domestic products by at least 5 per cent. The finance adviser who attended the seminar as chief guest, therefore, calls for an increased competitiveness of domestic trade before the graduation of Bangladesh from one of the least developed countries to a developing country in November 2026.

The graduation will come without duty- and quota-free access to some major export markets, which is why it is imperative to increase the efficiency of all the agencies involved to cut down on the high external trade costs as a leverage against the loss of entitlements. The government would also need to phase out subsidy on export products. All this makes reforms in tax measures, value-added tax management and customs procedures imperative. Representatives from the private sector who attended the seminar put out a call for the deferral of the graduation by a few more years so that the country gets some time to prepare for the challenges that would be forthcoming. They, perhaps, believe that the graduation, for which Bangladesh qualified for in 2021 and was initially set to take place in 2024 but was deferred by two years on a government request, could be further deferred to prepare to fully reap the benefits of the graduation. A further deferral could hardly be an option as it would mean the deferral of the graduation entitlements. And, it would also mean that Bangladesh has not made the preparation all these years. The adviser calls for an increase in the competitiveness of the local business before the graduation by also maintaining labour and environmental compliance, putting out a call for the private sector to be proactive along with the government in meeting the graduation challenges and effectively implementing the transition strategy adopted in November 2024, which could also be reviewed in the changed political context.

It is already time that the government, along with the private sector, took steps to reduce the high external trade cost to stay competitive after Bangladesh, in effect, graduates to a developing country in 2026.​

 

[Saif]

Should Bangladesh defer LDC graduation?

As Bangladesh approaches its scheduled graduation from the United Nations' Least Developed Country (LDC) category in November 2026, concerns are mounting among industrialists and exporters about the potential impact on their businesses. With the impending loss of trade benefits typically enjoyed by

thefinancialexpress.com.bd

Should Bangladesh defer LDC graduation?
Atiqul Kabir Tuhin
Published :
Jan 29, 2025 23:54
Updated :
Jan 29, 2025 23:54

As Bangladesh approaches its scheduled graduation from the United Nations' Least Developed Country (LDC) category in November 2026, concerns are mounting among industrialists and exporters about the potential impact on their businesses. With the impending loss of trade benefits typically enjoyed by LDC countries, there is a growing call from business leaders for a deferment of this graduation.

Recently, the president of the Bangladesh Chamber of Industries (BCI) Anwar-ul Alam Chowdhury also voiced concerns about the potential consequences of LDC graduation. He warned that Bangladesh's economy could face severe consequences if the LDC graduation proceeds as scheduled. Highlighting the country's ongoing economic challenges, including a depressed business climate, he noted that approximately 100 garment factories have already been closed in the past year, and another 200 are on the verge of closure. He concluded that amidst this challenging environment, "LDC graduation would be suicidal for Bangladesh."

There is no denying that the economy is in the throes of a multitude of crises, including persistent high inflation, foreign exchange imbalance, dollar shortage, dwindling foreign reserves, decline in investment, widening fiscal deficit, and a surge in non-performing loans in the banking sector. Initially, the economy started facing headwinds due to a confluence of external shocks - COVID-19 pandemic and Russia-Ukraine war. Then, internal political instability, widespread corruption, and an estimated $16 billion in annual money laundering during Sheikh Hasina's autocratic rule have exacerbated the country's economic woes. And then, following the August 5 changeover, a prolonged political chaos and uncertainty, coupled with gas crisis have led to widespread factory closures and labour unrest. This has made many weary of the country's economic future and prompted calls for the deferment of the graduation.

While graduation from the LDC category marks a significant milestone in Bangladesh's development trajectory, it will present new economic realities and challenges. As an LDC, Bangladesh has historically enjoyed a range of significant benefits, including duty-free and quota-free market access to major markets, which has particularly helped the garment sector to thrive, access preferential treatment and extended implementation periods under World Trade Organization (WTO) agreements, eligibility for significant financial and technical assistance from donor countries and international organizations under the Official Development Assistance (ODA), and lowered budgetary contributions to international organisations such as the United Nations.

These benefits have played a crucial role in Bangladesh's economic development. However, upon graduation from LDC status, Bangladesh will lose access to these preferential treatments. For example, according to a recent government strategy paper, 75 per cent of Bangladesh's exports enjoy duty-free access to international markets due to its LDC status. Once Bangladesh graduates to a developing country, it will no longer be eligible for this preferential treatment. Instead, an average tariff of 20 per cent could be imposed on exports, depending on the importing country. This raises concerns about the future of the country's export-oriented industries. Will exporters be able to maintain their competitiveness without these privileges? Can the economy withstand a potential decline in exports as a result of loss of preferential trade benefits in export?

Given these impending challenges, many are of the view that the government must carefully consider the implications of the graduation and determine the timeframe for a smooth transition based on economic realities. But the question is, will it be feasible for Bangladesh to request a deferment?

Precedents for deferment exist. For instance, Nepal, which first met the graduation criteria in 2015, requested to defer its graduation following a devastating earthquake in 2017. Now, Nepal will graduate from LDC in 2026.

However, any request for deferment would require strong justification and would undergo rigorous scrutiny by the United Nations Committee for Development Policy (CDP). The CDP will closely monitor Bangladesh's progress and assess the country's readiness for a smooth transition.

It is important to note that Bangladesh has already met the graduation criteria on two previous occasions (2018 and 2021). The CDP's latest triennial review (February 2024) reaffirmed that Bangladesh has comfortably met the criteria for LDC graduation. According to the latest assessment, Bangladesh's Gross National Income (GNI) per capita stands at $2,684, significantly above the graduation threshold. The Human Assets Index (HAI) of 77.50 also surpasses the graduation requirement and the LDC average. Additionally, Bangladesh's Economic and Environmental Vulnerability Index (EVI) of 27 in 2024 meets the graduation criteria of 32 or below. Even considering the recent subdued economic performance, it is unlikely that Bangladesh will fall below the required thresholds for LDC graduation.

Moreover, a deferment would position Bangladesh as an outlier among its South Asian neighbours. Bhutan graduated in 2023, and Nepal is set to graduate in 2026, leaving only war-torn Afghanistan to stay in the LDC category after 2026. Would Bangladesh find it comfortable to remain in such a position?

Considering this, some observers opine that the best option for Bangladesh will be to focus on necessary reforms and capacity building for a smooth and sustainable graduation, rather than getting distracted by calls for deferment. The panel of experts that prepared the white paper on Bangladesh's economy has also recommended proceeding with the scheduled graduation. It advised the government to formulate a robust transition plan to mitigate potential adverse impacts and facilitate structural transformation.

Experts suggest that to tackle post-LDC challenges, Bangladesh must diversify its economy and export basket, reduce reliance on preferential trade agreements, and develop competitive advantages in skills, productivity, and innovation. By enhancing trade competitiveness, improving export quality, negotiating bilateral and regional trade agreements, and complying with WTO regulations, intellectual property rights, and labour standards, Bangladesh can avail itself of preferential access to many markets. Equally important will be compliance with evolving global trade trends, which increasingly emphasise sustainability, environmental responsibility, and social equity. By addressing these challenges and implementing a comprehensive strategy, Bangladesh will be better equipped to navigate the post-LDC challenges and position itself as a more competitive and competent player in the global market.​

 

[Saif]

WTO and LDC graduation

There is a call for deferring the country's graduation from the Least Developed Country (LDC) category. Some civil society activists and trade bodies have raised concerns about the possible adverse effects of the graduation, which is scheduled to happen by the end of next year formally. Thoug

thefinancialexpress.com.bd

WTO and LDC graduation
Asjadul Kibria
Published :
Feb 01, 2025 23:24
Updated :
Feb 01, 2025 23:24

There is a call for deferring the country's graduation from the Least Developed Country (LDC) category. Some civil society activists and trade bodies have raised concerns about the possible adverse effects of the graduation, which is scheduled to happen by the end of next year formally. Though the discussion about deferment of graduation is not new, it has become widespread after the fall of the Hasina regime. The ousted regime displayed the decision of graduation, taken by the United Nations (UN), as one of its great success stories. Due to the oppressive attitude of the Hasina government, it was difficult to raise questions about the move at that time. Nevertheless, some differed with the government for its hurry in pursuing graduation and called for extensive preparation to equip the post-graduation shock. But The autocratic government took little heed of it.

It's important to note that seeking graduation from the LDC category is not inherently negative. In fact, it signifies a nation's ambition to progress, fostering prosperity and reducing poverty. This aspiration can inspire a poor country to strive for a better future, where citizens can enjoy an improved standard of living and the government can rely less on foreign aid.

UN also encourages LDCs to transform themselves into competitive ones. Certain benchmarks have also been set in this connection to measure the advancement of the LDCs and identify whether they are fit for getting out of the category of the poorest nation. An increase in per capita income to a certain amount (at least $1306), advancement in human development and reduction in economic vulnerabilities are the factors that help a country to become non-LDC. The LDCs regularly provide information about their development in these areas to the relevant body of the UN, the Committee for Development Policy (CDP), for review. After reviewing the data and statistics so presented, the UNCDP decides which LDCs are moving toward graduation.

It's crucial to understand that the UN body does not independently verify the authenticity or reliability of a country's data. It's the responsibility of each nation to provide accurate data, ensuring a clear and trustworthy representation of their development. Similarly, countries must undertake the necessary groundwork and preparations to effectively manage the challenges that come after graduation.

Those urging for deferment of the LDC graduation have provided several reasons for doing so. According to them, the country's socio-economic advancement scenario is based on some flawed and distorted data and statistics. They blamed the ousted Hasina regime for manipulating key data to conceal weakness and provide deceptive advancement in some areas. They also argued that without adequate preparation and measures to reform the key areas, the ousted government pushed the agenda of graduation based on distorted data.

The arguments are valid to a large extent. The problem is that these can't be presented as reasons before the UN while seeking the deferment of graduation. Trying to do so will tarnish the country's image and severely damage the acceptability of national development. Instead, some prudent and widely acceptable factors need to be presented with strong arguments to substantiate the request for deferment of graduation. But the work is not so easy.

A popular misperception is the role of the World Trade Organization (WTO). Last month, Chief Advisor Muhammad Yunus met WTO Director General Ngozi Okonjo-Iweala on the sidelines of the World Economic Forum annual meeting in Davos. At the meeting, the WTO chief said that the multilateral trade body would help Bangladesh graduate smoothly from the LDC category. Taking a cue from the meeting, some expressed disappointment and blamed WTO for pushing the graduation.

Being an LDC, Bangladesh has enjoyed several benefits and flexibilities, especially in the area of global trade. These also help the country become competitive after a certain period when compliance with international trade rules and regulations becomes easier. WTO is the international organisation that makes trade rules and trade-related dispute settlements. Bangladesh has been a member of the organisation since its formal inception in 1995 and joined GATT, the predecessor of the WTO, in 1972. So, the country is closely associated with the organisation and has been playing an active role in various multilateral trade negotiations under the umbrella of the WTO. Bangladesh also led the LDC group in these negotiations for long.

There's a common misconception that the WTO determines the graduation of LDCs. This misunderstanding has led some civil society organisations to pressure governments to seek a waiver from the WTO. However, it's important to clarify that the WTO has no authority over a country's inclusion in or exclusion from the LDC category. This decision falls solely under the jurisdiction of the UNCDP.

In fact, the multilateral trade body cannot offer any unilateral facility. Bangladesh and other LDCs have been frantically trying to extend the trade benefits for graduating LDCs for a couple of years. In other words, these countries want to get the benefits even after they are stripped of the LDC tag for three to six years. They also wish to gradually phase out the LDC-specific benefits to make graduation smooth and sustainable. So far, little progress has been made in this regard, and the LDCs are still negotiating. WTO DG actually referred to the process. And there is no scope for requesting WTO to defer the graduation.​

 

[Saif]

Bangladesh cannot unilaterally defer its LDC graduation timeframe: Dr. Zahid

Former lead economist of the World Bank Bangladesh Office Dr. Zahid Hussain has said Bangladesh cannot unilaterally defer its LDC graduation timeframe. “The United Nations Committee for Development Policy (UN-CDP) had recommended Bangladesh’s graduation from the LDCs in 2021. This reco

thefinancialexpress.com.bd

Bangladesh cannot unilaterally defer its LDC graduation timeframe: Dr. Zahid
BSS
Published :
Feb 01, 2025 18:36
Updated :
Feb 01, 2025 18:36

Former lead economist of the World Bank Bangladesh Office Dr. Zahid Hussain has said Bangladesh cannot unilaterally defer its LDC graduation timeframe.

“The United Nations Committee for Development Policy (UN-CDP) had recommended Bangladesh’s graduation from the LDCs in 2021. This recommendation, while not automatically enforcing graduation, is seen as largely mandatory since the UN General Assembly tends to follow the CDP's recommendations,” he said.

Zahid Hussain said this in a recent interview with the national news agency at his residence while sharing his insights on the country's graduation from the Least Developed Countries (LDCs) category.

Dr. Hussain noted that several countries that faced setbacks during the graduation process were granted an extended preparatory period before graduation.

This provides them with additional time to address any concerns or challenges identified. Bangladesh has already got a two-year extension.

Addressing reservations from the business community about Bangladesh’s LDC graduation slated for 2026, Dr. Hussain clarified that once a country qualifies for graduation, the responsibility falls on them to ensure that all concerns are adequately addressed.

As Bangladesh prepares for its graduation in 2026, it is imperative for the country to address the concerns of the business community and ensure a smooth transition.

The renowned economist shared these perspectives providing a comprehensive view of the challenges and opportunities that lie ahead for Bangladesh from LDC graduation.

Elaborating on the matter, Dr. Zahid said, “Now, I think there is limited scope for deferring the country’s graduation through changing data and statistics. There is also less scope for bringing down the statistics below the threshold level on per capita income, human development, and vulnerability indices,” he said.

Bangladesh is the first country recommended for graduation by meeting all three criteria, Dr Zahid said adding “We’ll have to accept that we’ll graduate and acting on tackling the possible impact on our competitiveness. We should be prepared.”

In the last Ministerial Conference of the World Trade Organization (WTO) held in Abu Dhabi, the ministers decided to allow the continuation of the LDC trade benefits to the graduating LDCs for three more years.

The European Union (EU) will continue the LDC trade benefits for Bangladesh up to 2029, offering a three-year grace period to the graduating LDCs.

A few other countries like Canada, the UK, and Australia will also continue the LDC trade benefit for Bangladesh even after the graduation.

When asked about the ‘middle-income trap’ that many are apprehending Bangladesh is already in, Dr. Zahid said if political stability and structural economic reforms are not ensured, then nothing will get us out of the trap.

“We’ll have to bring about necessary changes in three areas in particular- in export diversification, investment and skill development. We’ve a big opportunity ahead of us which is the new economic policy of US President Donald Trump,” Dr Zahid said.

Under this circumstance, the multinational companies which have businesses in China are searching for alternate places to relocate their businesses ...like Vietnam, Indonesia and the Philippines, he noted.

Dr. Zahid said many are also talking about Bangladesh on the global stage...but Bangladesh is still not fully ready in terms of investment climate like addressing complexities in getting visas, readiness of the economic zones, and complexities of business regulation, money repatriation, and so on.

“If we can become fully ready, then there could be a quantum jump in FDI and thus the door of immense opportunities would be opened,” he hoped.

As Bangladesh approaches this crucial transition, Dr Zahid said the government’s proactive stance on economic zones is a laudable step. Instead of an ambitious plan to establish 100 economic zones, the focus has shifted to creating five well-equipped zones urgently.

“This strategic move aims to provide the necessary facilities and regulatory reforms to foster a ‘plug-and-play’ environment for investors,” he added.

Dr Zahid observed that by streamlining business regulations and ensuring the readiness of these special economic zones (SEZs), Bangladesh can hope to attract significant foreign direct investment (FDI) and boost the country's economic prospects.

Dr. Zahid acknowledged the issues raised by the business community about their concerns over current business environment. The state of the financial sector and the inconsistent supply of gas and electricity are two major factors contributing to low business confidence to some extent, he said.

The former World Bank lead economist further highlighted the challenges related to the supply of LNG. The government faces difficulties in maintaining sustainable supply while selling LNG below the buying price, he said.

In the new Monetary Policy Statement (MPS), Dr Zahid said some forward guidance is likely to come in which way the central bank would run its policy and programs.

“With the unveiling of the FY26 budget in June this year, he said, all will be able to know in which way the economic policy and management will move forward and then the cloud in the sky will clear.”

Asked whether the government’s economic reforms agenda is getting less importance than other reform agendas, he said the government certainly has the realization that they would have to carry out economic reforms and there is no doubt in this regard.

“But, despite having strong will, they often couldn’t translate those into actions as the initiatives should have to come from the administration itself and from the concerned ministries,” he said.​

 

[Saif]

Diversification can meet post-LDC challenges

The government's initiative to speed up export diversification in preparation for post-LDC challenges is a complex task requiring both persistent efforts and innovative approaches. A FE report says the relevant authorities are developing a strategy to maintain the competitiveness of four major expo

thefinancialexpress.com.bd

Diversification can meet post-LDC challenges

Published :
Feb 13, 2025 23:47
Updated :
Feb 13, 2025 23:47

The government's initiative to speed up export diversification in preparation for post-LDC challenges is a complex task requiring both persistent efforts and innovative approaches. A FE report says the relevant authorities are developing a strategy to maintain the competitiveness of four major export products-excluding ready-made garments (RMG)-after Bangladesh graduates from its Least Developed Country (LDC) status in 2026. These include leather and leather goods, jute goods, agricultural and agro-processed products, and pharmaceuticals. Upon graduation, Bangladesh will no longer be permitted to provide export subsidies under the World Trade Organisation (WTO) regulations. In anticipation of this transition, the government has been gradually phasing out cash incentives to mitigate the impact of subsidy withdrawal. Currently, leather and leather goods sector benefits from a 10 per cent cash incentive, jute products receive 10 per cent, agricultural and agro-processed goods enjoy 10 per cent, and pharmaceutical products receive 6.0 per cent. Last year, the government reduced cash incentives for nearly all sectors, signalling the gradual elimination of these benefits. However, a complete withdrawal of subsidies will significantly impact competitiveness of industries here, necessitating strategic interventions to sustain export growth.

Export diversification is a package comprising scores of issues from product development, adaptation, quality assurance, market demand analysis, compliance fulfilment, competitive pricing and so on. So, when it comes to diversification of exportable products, it must not be seen as a remedy readily available. It has to be worked on, in a planned manner taking into account all relevant factors as a package. In the past, the Export Promotion Bureau undertook many foreign-aided export diversification projects. However, as many of the projects approached the aforementioned package only partially, the outcome was far from satisfactory.

The reason why diversification figures so prominently is because of its many tangible benefits. Diversification of export composition protects a country from the risk of an unpredictable declining trend in international prices of exportable commodities that, in turn, leads to unstable export earnings. Export diversification could, therefore, help stabilise export earnings in the long run. Diversification provides the opportunities to extend investment risks over a wider portfolio of the economic sector which eventually increases income. It can also be seen as an input factor that has the effect of increasing the productivity of other factors of production. Furthermore, economic growth and structural change depend upon the type of products that are being traded. Thus export diversification allows an economy to achieve some of its macroeconomic objectives namely sustainable economic growth, satisfactory balance of payment situation, employment, and redistribution of income.

The four selected sectors are well-chosen given their strong growth potential and market demand. However, two additional sectors, light engineering and plastics, also warrant consideration. These have demonstrated remarkable potential and could further contribute to export diversification efforts. As the government develops its strategic framework, it is crucial to engage all stakeholders, including industry representatives, exporters, and policymakers, in order to build a comprehensive and consensus-driven approach to remain competitive in the post-LDC era.​

 

[Bilal9]

relevant authorities are developing a strategy to maintain the competitiveness of four major export products-excluding ready-made garments (RMG)-after Bangladesh graduates from its Least Developed Country (LDC) status in 2026. These include leather and leather goods, jute goods, agricultural and agro-processed products, and pharmaceuticals.

The four selected sectors are well-chosen given their strong growth potential and market demand. However, two additional sectors, light engineering and plastics, also warrant consideration. These have demonstrated remarkable potential and could further contribute to export diversification efforts.

Light Engineering and Plastics (as well as Pharma) are going to need strong investment encouragement policy regimes in absence of export subsidies, which are banned by WTO rules and which Bangladesh govt. has been providing so far, which helped.

Letting Pakistani light-engineering investors to invest in Bangladesh will also be wonderful as that sector is very well-developed there. These guys have made a science out of value-added products out of ship-scrap alone (motorcycle parts and lathes among other thousand things) and their involvement in Bangladesh will be a Godsend. We should also encourage stainless steel surgery implement makers as well as sports good folks from Pakistan to set up shop to supply locally in Bangladesh to help import substitution. These companies are based in the Sialkot area.

In particular I refer to API manufacturing (for basic Pharma Ingredients) and plastic pellets manufacturing (as well as mold-making expertise) for plastic molders locally in Bangladesh. These and other backward integration encouragement steps need to be taken immediately, to foster competitive advantage for exports.

Look how many Pharma API companies Indian entrepreneurs invested in (I'm sure India Govt. subsidized some of this. Ours efforts are quite poor in comparison.

28 Top Companies Manufacturing Active Pharmaceutical Ingredients

Discover the top 28 active pharmaceutical ingredients manufacturing companies, including global giants like Novartis and specialized firms like Ipca Laboratories. Explore their contribution to the healthcare industry

www.inven.ai

 

[Saif]

Are we prepared to seize the new global opportunities?

We must build domestic institutions and strengthen negotiation capacity to leverage opportunities after LDC graduation.

www.thedailystar.net

Life after LDC graduation
Are we prepared to seize the new global opportunities?

VISUAL: SHAIKH SULTANA JAHAN BADHON

As Bangladesh prepares to graduate from the Least Developed Country (LDC) category in November 2026, a pressing question looms: should the new government reconsider its strategy for this monumental transition?

It is important to recognise that this graduation is a collective leap forward for its people and businesses, who will be at the forefront of both the challenges and opportunities that come with this transition.

Bangladesh presents a sui generis case for two primary reasons. First, it is the largest LDC to graduate, with a population of 171 million. Second, according to a WTO study on the "Trade Impacts of LDC Graduation," 90 percent of the graduation-related trade losses would be incurred by Bangladesh alone. It is estimated that graduation will result in a 14.28 percent decline in Bangladesh's exports.

Bangladesh is set to graduate at a pivotal moment marked by unprecedented global and domestic instabilities. Serious questions are now being raised about the veracity of the development narrative upheld by the past regime of nearly two decades, which relied on questionable public statistics.

As critics argue that the decision to pursue LDC graduation was, to a large extent, politically motivated, and as part of the business community voices its resistance to this move, it is critical to qualitatively assess Bangladesh's preparedness for sustainable LDC graduation. It must be taken into account that, for countless entrepreneurs, this is not merely a policy shift but a direct threat to the survival of their businesses, livelihoods, and the health of their communities.

Bangladesh should urgently establish a structured consultative mechanism to engage all key stakeholders—businesses, civil society, and experts—in deliberating the best course of action: whether to delay LDC graduation by a few more years after 2026 or to embrace it now.

If the consultative mechanism determines that Bangladesh should proceed with graduation, as generating "real" statistics within the stipulated time is practically challenging, the existing transition strategy, which began nearly a decade ago, can be revisited. A National Committee was formed in 2021 to assess the impacts and draft an action plan. The committee's recommendations are currently under government review for final approval.

The recommendations of that committee should be highlighted, as they rightly suggest strategically navigating Bangladesh's evolving status to capitalise on current and future opportunities. The approach is threefold. First, as an LDC, Bangladesh should actively advocate for the implementation of existing LDC-specific policy flexibilities. Second, Bangladesh must proactively push for the creation of multilateral rules to support sustainable graduation. Third, assuming its new status as a developing country, Bangladesh must prepare and act upon forward-looking strategies to seize emerging global opportunities.

By now, Bangladesh has made significant progress on the first two counts. Notably, it has played a leading role at the WTO, representing the LDC Group and ensuring that concerns surrounding LDC graduation receive due attention. In 2020, the LDC Group tabled a proposal requesting a 12-year extension of all LDC-specific trade support measures after graduation.

After intense discussions, WTO members partially adopted a few elements of this proposal by: i) encouraging preference-granting countries to provide "a smooth and sustainable transition period" for the withdrawal of preferences; ii) extending LDC-specific technical assistance for three years after graduation; and iii) maintaining the peace clause for dispute settlement for three years after graduation.

While these developments are steps in the right direction, they fall short of the original 12-year request, reflecting the systemic reluctance of some developed countries, particularly the US, to prolong LDC-specific flexibilities. As a result, Bangladesh must prepare for the reality of losing access to LDC-related benefits.

Bangladesh's priority must now be building domestic institutions, strengthening negotiation capacity, and leveraging new economic opportunities. LDC graduation presents a chance for Bangladesh to rethink its development model and position itself as a competitive, sustainable, and digitally driven economy.

Trade will remain the cornerstone of Bangladesh's integration into the global economy. To translate these opportunities into tangible benefits, Bangladesh must immediately implement a set of strategic action plans.

First, LDC graduation could make Bangladesh more attractive to foreign investors. However, this requires significant domestic legal and regulatory reforms. Outdated regulations, infrastructure gaps, and bureaucratic inefficiencies must be addressed to create a conducive investment climate. The demand for dedicated commercial courts continues to grow. The government must not only establish these courts in Dhaka and Chattogram as initially planned but also prioritise their creation in at least six divisional headquarters, followed by an expansion into every district.

Second, Bangladesh's strategic location in the Asia-Pacific region offers immense potential for regional integration and connectivity. This region is growing rapidly and is home to over 200 regional and free trade agreements (FTA). Deeper economic integration with regional economies can diversify Bangladesh's exports and enhance economic resilience. Bangladesh should actively pursue FTAs with key trading partners.

Third, LDC graduation should be viewed as an opportunity to embrace sustainable industrialisation. Bangladesh should capitalise on its comparative green advantages, such as eco-friendly jute products and renewable energy. A roadmap for green economic transformation must be developed to align with global sustainability goals and standards.

Fourth, Bangladesh holds immense potential in digital trade, particularly in digitally delivered services. The country has already emerged as a leader in freelance digital services. To scale up, Bangladesh must develop a regulatory framework that enables and facilitates cross-border e-commerce. To pursue this, the domestic e-commerce sector must be strengthened by developing a trust-based business model that follows global best practices.

Fifth, SMEs are vital contributors to GDP and employment. To mitigate the negative impacts of graduation, particularly in cross-border trade, targeted policies must be developed. These should include granting SMEs greater access to Export Processing Zones (EPZs), thereby facilitating their smoother integration into global supply chains and boosting their competitiveness on the international stage.

It is crucial to assess whether the existing reform commissions have adequately addressed these priorities. The proposed consultative mechanism should design and implement targeted measures to fully capitalise on the opportunities presented by LDC graduation.

Muhammad Omar Faruque is a researcher in law.

Mohammed Abu Saleh is an international trade lawyer, who formerly worked with the WTO Secretariat in Geneva, Switzerland.​

 

[Saif]

Deferring LDC graduation not an option

Deferment of Bangladesh’s country status graduation should not be even up for discussion as inclusion in the least developed country category is voluntary while upgrading to the developing country grouping is mandatory, said a noted economist yesterday.

www.thedailystar.net

Deferring LDC graduation not an option
Economist says

Deferment of Bangladesh's country status graduation should not be even up for discussion as inclusion in the least developed country category is voluntary while upgrading to the developing country grouping is mandatory, said a noted economist yesterday.

Many are arguing in favour of the deferment, but the smart move for the country would be to start taking preparations for a smooth transition, said Mustafizur Rahman, distinguished fellow of the Centre for Policy Dialogue (CPD).

He was addressing a discussion on "Restoring stability in economic and political landscape" at an 8th SANEM Economists' Conference 2025 organised by the South Asian Network on Economic Modeling (SANEM) at BRAC Centre Inn in Dhaka.

No other peer country is demanding a deferment and while a country needs to meet two out of three criteria to be eligible for the graduation, Bangladesh has qualified in all three, said Rahman.

Even Nepal, which is scheduled to graduate with Bangladesh in November 2026, is not demanding a deferment,
he said.

Leaders of different countries attending the ministerial conference of World Trade Organization (WTO) in Abu Dhabi last year did not show interest in extending the transition period, he said.

Bhutan has already graduated and if Bangladesh defers the graduation, it will be left with war-torn Afghanistan as the only two least developed countries (LDCs) in South Asia, said Rahman.

After the graduation, Bangladesh will become ineligible for almost all trade benefits, such as zero duty access, and strictly abide by the Trade Related Aspects of Intellectual Property Rights (TRIPs), said Rahman.

Moreover, Bangladeshi exporters will face duties of over 10 percent in many countries, he said.

However, some countries such as those under the European Union, Canada and the UK will continue to provide the facilities for a grace period of three years, he said.

Yet many businesses want the government to provide export incentives till the end of the grace period in 2029, he said.

Seven sub-committees are working on providing recommendations to the government for a smooth graduation, said Rahman.

Of the total losses of advantages that the 12 graduating LDC are enjoying now, nearly 90 percent will befall Bangladesh as it avails the highest trade benefits among all the LDCs, he said.

While Bangladesh requested the United Nation for inclusion in the LDC group in 1972, Zimbabwe, which was then struggling, refused to accept the LDC status, Rahman said.

He suggested increasing direct tax collections, as there was a possibility of a fall in revenue from indirect taxes in the form of import duties.

Bangladesh should also focus more on countries in the Global South, South East and the Association of Southeast Asian Nations (Asean) as only 11 percent of its annual exports are destined for those countries, he said.

China imports $2,800 billion worth of goods and India over $730 billion in a year. But Bangladesh accounts for less than one percent of China's imports while exports to India stand at less than $2 billion, said Rahman.

Bangladesh should also hold negotiations for signing free trade agreements, comprehensive economic partnership agreements and other trade deals for retaining the preferential trade benefits, he said.

While Bangladesh will face duties following the graduation, Vietnam will enjoy zero-duty in many countries as it has already signed trade deals, he said.

On a positive note, Bangladesh and Japan are currently engaged in the process of signing an economic partnership agreement, the economist said.

Bangladesh should focus on avoiding anything that threatens economic stability. For instance, one mega project with an original allocation of Tk 1,800 crore had ended up costing Tk 18,000 crore, he said.

Moreover, Bangladesh will have to pay $6 billion annually in debt repayments from 2026 when the grace period for the largest project on loan, the $14 billion Rooppur nuclear power plant project, will come to an end, he said.

Nearly, 77 percent of illicit financial outflow was through trade such as mispricing—over invoicing and under invoicing. But the fact remains that trade related mispricing is a major issue, and it has to be addressed, he said.

Zahid Hussain, former lead economist of World Bank's Dhaka office, said Bangladesh was already in the middle-income trap.

The export to GDP ratio and investment are declining, but inflation is rising. The volume of bank loan rescheduling is also increasing while the central bank's foreign currency reserves are at a low level, Hussain said.

The discontinuation of a loan programme by International Monetary Fund (IMF) for Bangladesh will have consequences, he said.

It will affect budgetary support provided by World Bank to Bangladesh, he said.

Moreover, Asian Development Bank, Asian Infrastructure Investment Bank and others will ask about the challenges of Bangladesh, he said.

KAS Murshid, former director general of the Bangladesh Institute of Development Studies, said in order to attain macroeconomic stability, Bangladesh really needs to lay emphasis on agriculture as it ensures the smooth flow of essentials.

Sharmind Neelormi, a professor at the Department of Economics at Jahangirnagar University, pointed out that environmental assessments were not conducted for the construction of a 29.73-kilometre road through hoars in Kishoreganj and for Savar Tannery Industrial Estate in Dhaka.

Rumana Haque, a professor of economics at the University of Dhaka, said investment in the health sector needs to be increased to ensure a productive workforce.

At the same time, the reasons need to be unearthed on why the health sector cannot spend the money allocated in the national budget, although there is a chronic shortage of health personnel, she said.

Moreover, the situation is dire when it comes to treating mental health patients, she added.

Selim Raihan, executive director of the SANEM, moderated the discussion.​

 

[Saif]

Delay of LDC graduation sought

The country’s private sector businesses have urged for deferring Bangladesh’s LDC graduation for at least 2 to 3 years, considering the prevailing global and local economic challenges, including a shortage of energy, high inflation, high interest rates and complexities in obtaining credit from...

www.newagebd.net

Delay of LDC graduation sought
Staff Correspondent 10 March, 2025, 21:43

The country’s private sector businesses have urged for deferring Bangladesh’s LDC graduation for at least 2 to 3 years, considering the prevailing global and local economic challenges, including a shortage of energy, high inflation, high interest rates and complexities in obtaining credit from banks.

They were speaking at a focus group discussion on ‘Implementation of the STS for Smooth Transition from LDC Status’ jointly organised by the Support to Sustainable Graduation Project, the Economic Relations Division and the Dhaka Chamber of Commerce and Industry on Monday in the capital Dhaka, according to a DCCI press release.

DCCI president Taskeen Ahmed presented a keynote paper and said that GDP growth in the first quarter of the current financial year was only 1.8 percent, while the manufacturing sector’s growth was only 1.43 percent.

He said that Bangladesh’s economy was still facing various challenges and amid these challenges, Bangladesh would be graduating from a least developed country to a developing on in 2026.

Regarding the ‘Smooth Transition Strategy,’ he recommended developing a roadmap to stabilise the economy, creating a real-time monitoring and evaluation platform, signing free trade agreement with key partners and aligning trade, industrial and investment policies.

He also urged the signing of FTA with new export destinations and implementing policies for export diversification.

Speaking as chief guest, ERD secretary Md Shahriar Kader Siddiky said that they needed to build capacity at all levels to deal with the impact of the loss of trade benefits in the post-LDC era.

In this regard, he said, a committee will be formed with representatives of trade organisations to determine the private sector’s needs and find solutions.

Commerce secretary Mahbubur Rahman said that proper planning and implementation from the beginning were lacking to meet the challenges of LDC graduation, but based on the private sector’s opinion, more attention should be paid to a sustainable LDC graduation process.

He called upon the private sector to focus on product diversification in the RMG sector and on its promising packaging area.

Rizwan Rahman, former DCCI president, said that the country’s businessmen were not yet ready for the LDC graduation, so the government should make a decision in consultation with the private sector.

Manwar Hossain, chairman of Anwar Group of Industries, said that until the country’s exports surpassed its import figures, it could be said that it was not ready for graduation in the real sense.

Bangladesh Knitwear Manufacturers and Exporters Association president Mohammad Hatem said that the private sector needed time to prepare for graduation.

Government officials, business leaders and other stakeholders also spoke at the event.​

 

[Saif]

Govt wants to delay graduation from LDC

Bangladesh is scheduled to graduate from the status of least developed country on 24 November 2026. However, the interim government is working on delaying it further. However, it is not like that the government can defer the graduation if it wants. So the interim government will appeal to the...

en.prothomalo.com

Govt wants to delay graduation from LDC
Staff Correspondent
Dhaka
Published: 11 Mar 2025, 19: 26

Anisuzzaman Chowdhury

Bangladesh is scheduled to graduate from the status of least developed country on 24 November 2026. However, the interim government is working on delaying it further.

However, it is not like that the government can defer the graduation if it wants. So the interim government will appeal to the Committee for Development Policy (CDP) of the United Nations in this regard.

Special assistant to the chief adviser Anisuzzaman Chowdhury said this during a briefing at the secretariat Tuesday. Before that, Anisuzzman met finance adviser Salehuddin Ahmed at his office. He was appointed on Monday. He has been assigned at the finance ministry.

Anisuzzaman Chowdhury said the work on developing a complete outline for reconsidering Bangladesh’s graduation from LDC has begun.

A committee headed by chief adviser’s principal secretary M Siraj Uddin Mia has been formed in this regard. The ERD and FID secretaries are members of this committee.

Anisuzzaman Chowdhury said, “We are on the verge of graduating from LDC on the basis of false information. So we need to work on that. Our dependency on foreign countries has been surging since 2010. Local sources of income have declined. The tax-GDP rate has declined to less than 7 per cent. If we need to take more loans, then we will be in a crisis.”

Asked whether the indicators for graduation from LDC were fake or not, he said, “Let’s assume that everything was right. But what are our preparations? Some 85 per cent of the market facilities we get come from the readymade garment sector. We have to diversify our exports. We have been saying since 2018 that we will be graduating from LDC. But the dependency on the RMG sector has not been reduced even a bit after seven years. Why is that?”

Asked whether the graduation from LDC be postponed, the special assistant to the chief adviser said, “We have not reached the decision as yet. We have to sit with the business persons and owners of RMG industries. It’s not possible to confirm anything right now.”

“The things are not completely in Bangladesh’s hands. But we can appeal to reconsider the graduation with proper reasons and a credible outline. We are going to do that,” he added.

Economic Relations Department (ERD) secretary Shahriar Quader Siddique, Financial Institution Department (FID) secretary Nazma Mobarek, two additional secretaries of the Finance Division Munshi Abdul Ahad and Mohammad Abu Yusuf were present at the briefing.​

 

[Saif]

CA confirms scheduled LDC graduation

Professor Muhammad Yunus, chief adviser of the interim government, yesterday instructed his cabinet colleagues to prepare for Bangladesh’s status graduation from a least developed country (LDC) to a developing nation in November 2026, effectively doing away with all speculation.

www.thedailystar.net

CA confirms scheduled LDC graduation

Professor Muhammad Yunus, chief adviser of the interim government, yesterday instructed his cabinet colleagues to prepare for Bangladesh's status graduation from a least developed country (LDC) to a developing nation in November 2026, effectively doing away with all speculation.

Many, including a section of economists and businesspeople, were in favour of a deferment by a couple of years.

They reasoned that the economy needed time to cope with the severe fallout of the pandemic, the Russia-Ukraine war, and high global inflationary pressure over the last few years. Even some cabinet members had spoken out on several occasions recently about their doubts.

Shafiqul Alam, the chief adviser's press secretary, yesterday said the interim government had decided to keep to the schedule for availing the United Nations status graduation.

"The government has taken into consideration opinions from experts on whether the process would impact industries and settled on going for it," he said at a briefing at the Foreign Service Academy.

If any detrimental impact is identified, preparations will be made to overcome it, he said.

Besides, he said, benefits provided to Bangladesh for being an LDC would prevail for three years past the graduation.

"I think we have the ability to show our global competitiveness," Alam added.

Replying to a question, the press secretary said the pharmaceutical industry would also face no disruption in availing intellectual property rights.

Bangladesh has met all three preconditions for graduation, thanks to its economic development since the country attained independence in 1971.

The country was listed in the LDC grouping in 1975 to avail different benefits, such as zero-tariff and quota access to different countries, as the economy was on the verge of collapse following the Liberation War.

Such benefits have enabled Bangladesh to currently stand out as the second-largest garment exporter after China.

Bangladesh will lose trade worth over $8 billion annually due to the withdrawal of post-LDC preferential trade benefits, for which the country would have to pay at least 12 percent duty on goods shipments.

Currently, 78 percent of the country's exports avail LDC benefits in 38 countries.

The European Union has already assured that it will continue the LDC trade benefits for Bangladesh for three more years, up to 2029, as a grace period meant to enable a smooth transition.

The UK, Canada, and Australia have given similar commitments, except for some conditions.

Moreover, the World Trade Organization has also decided to grant the same grace period following Bangladesh's appeal for 12 years.​

 

[Saif]

LDC graduation should proceed as planned: Touhid

Foreign affairs adviser Md Touhid Hossain on Monday emphasised that Bangladesh’s graduation from the Least Developed Countries category should proceed as scheduled in 2026, without seeking any deadline extension...

www.newagebd.net

LDC graduation should proceed as planned: Touhid
Bangladesh Sangbad Sangstha . Dhaka 17 March, 2025, 22:09

Md Touhid Hossain

Foreign affairs adviser Md Touhid Hossain on Monday emphasised that Bangladesh’s graduation from the Least Developed Countries category should proceed as scheduled in 2026, without seeking any deadline extension.

‘Neither the government nor the business community has adequately prepared for the transition, but we must move forward,’ he said while addressing a seminar at the Economic Reporters Forum (ERF) auditorium in the capital.

The seminar titled ‘Importance and Prospects of Cotton Cultivation in Bangladesh for Saving Foreign Currency’ was jointly organized by Economic Reporters Forum, Bangladesh Cotton Association (BCA), Bangladesh Cotton Ginners Association (BCGA), and Bangladesh Sudan Cotton Ginning Industries (BSCGI) at ERF Auditorium in the capital.

Touhid pointed out that Bangladesh would have a three-year grace period until 2029 after its graduation, allowing the business community time to adapt.

He added that the European Union had already provided guidelines to the foreign ministry on securing GSP+ trade facilities post-graduation.

During the seminar, the foreign adviser announced the government’s plan to declare cotton as an agricultural product and implement measures within two months to boost domestic production.

He stressed the need for policy support to enhance local cotton cultivation, noting that substituting tobacco with cotton could benefit both farmers and the national economy.

Touhid also touched on the country’s cotton imports, mentioning that Bangladesh is exempt from US tariffs on cotton exports and hinted at the possibility of importing cotton from the United States.

Regarding Bangladeshi expatriates in Oman, the adviser said initiatives were underway to ease passport-related complications, with expectations that these measures would reduce complexities by half.

National Board of Revenue (NBR) Member Moazzem Hossain, Cotton Development Board Executive Director Dr. Fokre Alam Ibn Tabib, Bangladesh Cotton Ginners Association (BCGA) General Secretary Golam Saber, among other were present.​

 

[Saif]

LDC graduation in 2026

Now that the government has made it known that deferring the country's graduation from Least Developed Country (LDC) status is not in its thinking, businesses should get the message straight. For years, policymakers, businesses, and economists have deliberated on strategies to mitigate

thefinancialexpress.com.bd

LDC graduation in 2026
Wasi Ahmed
Published :
Mar 18, 2025 22:58
Updated :
Mar 18, 2025 22:58

Now that the government has made it known that deferring the country's graduation from Least Developed Country (LDC) status is not in its thinking, businesses should get the message straight. For years, policymakers, businesses, and economists have deliberated on strategies to mitigate post-graduation difficulties. The primary concern has always been the loss of trade benefits and economic preferences that LDC status provides. After all these years businesses in the country are still at unease about the competitive business landscape of the near future.

In a series of meetings held recently, businesses have asked for deferment of two to three years to be able to better adjust with the open-field competitive environment. This week the president of the Dhaka Chamber of Commerce and Industry (DCCI) urged upon the government to defer Bangladesh's graduation from least developed country (LDC) status for at least 2 to 3 years considering the prevailing global and local economic challenges. He made the observations at a Focus Group Discussion on "Implementation of the STS (Science and Technology Studies) for Smooth Transition from LDC Status" jointly organised by the Support to Sustainable Graduation Project (SSGP), Economic Relations Division (ERD) and DCCI. On a similar note, at a press briefing, the president of the Bangladesh Chamber of Industries (BCI) asked the government to take steps for deferment of the scheduled graduation by at least three years.

LDC graduation, besides meeting the critical requirements in terms of clear economic indicators, means that a country set to graduate is believed to have overcome the structural handicaps that warrant special treatment from the international community. The UN classifies a country as an LDC if it has per capita income of little over $1,000 a year. A country with so low per capita is perceived as economically vulnerable and scores badly on a range of human indicators, including nutrition, child mortality and enrolment in schools.

Since the term LDC was coined five decades ago, only four countries have graduated so far: Botswana (1994), Cabo Verde (2007), the Maldives (2011) and Samoa (2014). For a country like Bangladesh 'branded' as an LDC since its inception -- although much of its growth and successes owe hugely to its being termed so -- graduation is indeed a winning post, a milestone in the country's long-term economic and social development. But there are challenges, some apparently daunting, that the country will have to take on squarely.

Now, what are the main challenges of graduation that have caused worry among the businesses? To start with, Bangladesh would face stiffer competition from rivals in international trade, especially in exporting, as graduation will cut deeply into the preferential benefits that the country currently enjoys from well over forty countries - the EU being the largest provider accounting for around 54 per cent of the country's exports. Upon graduation from the LDC league, Bangladesh is likely to lose about $2.7 billion in export earnings every year. This is because exports will be subjected to 6.7 per cent additional tariff as preferential duty benefits from different countries and trading partners will no longer be available.

At present, Bangladesh is a major user of duty-free and quota-free market access, with shipments under this facility accounting for 72 per cent of the total exports. Regional trade agreements and bilateral initiatives cover about 90 per cent of the total exports, and thus preferential market access is of special significance.

Furthermore, upon graduation, products made in Bangladesh will become more expensive to buyers and consumers in key export markets. In this context, it may be recalled that according to the United Nations Conference on Trade and Development (UNCTAD), Bangladesh's exports may decline by 5.5 per cent to 7.5 per cent due to preference erosion and exports becoming costlier. No doubt, preference erosion in major exporting countries will thus have implications for export competitiveness and export earnings, and consequently, for GDP growth, employment generation and poverty alleviation.

Beyond trade, the country will also be hit when it comes to foreign aid. Concessionary financing from the International Development Association, the part of the World Bank that helps the world's poorest countries, and multilateral assistance with special benefits will also not be available upon graduation and attaining the middle-income status. The benefit of technical cooperation and other forms of assistance will also be affected. Concessional borrowing is another important area to be hit hard. As per the WB criteria, if a country's per capita income remains above $1,400 for three consecutive years, the rate of interest would surge to about 2.0 per cent from 0.75 per cent-a facility that Bangladesh currently enjoys like all other LDCs.

These difficulties were anticipated years ago, and think tanks such as the Centre for Policy Dialogue (CPD) have long been urging the government and private sector to prepare for the transition. The government, too, has taken some steps to gradually reduce business incentives to help business sectors adjust to the post-LDC scenario.

Following its graduation, Bangladesh will not be left in the desert as there will be a transition phase which will allow the existing cushioning to continue for some time-three years or so.

The government's decision seems to be a step in the right direction, even though challenges are likely to be there after graduation. In a free-trade world, facing competition rather than remaining protected by trade preferences is in the best of interests of the country's trade and commerce as this will ultimately strengthen the economy and enhance our global competitiveness.​

 

[Saif]

LDC graduation to bring opportunities and some challenges: Commerce adviser

After the LDC graduation, Bangladesh will get greater opportunities along with some challenges, Commerce Adviser Sheikh Bashiruddin said on Thursday. He was speaking as the chief guest at a seminar titled "Diversification of Bangladesh's Export Basket: Challenges & Opportunity in the Post LDC Grad

thefinancialexpress.com.bd

LDC graduation to bring opportunities and some challenges: Commerce adviser
UNB
Published :
Mar 19, 2025 20:23
Updated :
Mar 19, 2025 20:23

After the LDC graduation, Bangladesh will get greater opportunities along with some challenges, Commerce Adviser Sheikh Bashiruddin said on Thursday.

He was speaking as the chief guest at a seminar titled "Diversification of Bangladesh's Export Basket: Challenges & Opportunity in the Post LDC Graduation" held at the FBCCI office in Motijheel on Wednesday.

He urged the business community to work together on a consensus to exploit the opportunities. FBCCI Administrator Md Hafizur Rahman presided over the seminar.

Speaking at the seminar Hafizur said that the diversification of products is one of the challenges that Bangladesh needs to face after the LDC graduation.

In this case, priority -based programmes need to be taken by finding out which products and sectors need special importance, he pointed out.

A keynote paper by Centre for Policy Dialogue (CPD) research director Khandaker Ghulam Moazzem was presented at the seminar.

He advised the traders to prepare on how to manage the business in the next principle of LDC.

Secretary of the Ministry of Commerce Mahbubur Rahman, Chairman of Bangladesh Trade and Tariff Commission Dr. Mainul Khan and Export Development Bureau (EPB) Vice Chairman Md. Anwar Hossain were present as the special guests at the seminar.

They said the present government was sincere in addressing the post -LDC passage and solving the problems of the private sector.

The seminar was also attended by the Chairman and CEO of the Policy Exchange Bangladesh M. Mashroor Riaz, Pran-RFL Group Director Ujma Chowdhury, Executive Director of Square Pharmaceutical and Director of Bangladesh Pharmaceutical Association Md. Mizanur Rahman, BPGMEA President Shamim Ahmed.​

 

[Saif]

Govt delivering utmost to ensure smooth graduation from LDCs: Commerce adviser

"Be rest assured, we're doing as much as possible imbued with patriotism in this regard," he said.

en.prothomalo.com

Govt delivering utmost to ensure smooth graduation from LDCs: Commerce adviser
BSS
Dhaka
Published: 21 Mar 2025, 16: 28

Sk Bashir Uddin Prothom Alo

Commerce adviser Sk Bashir Uddin has said that the interim government has been delivering its maximum efforts as much aspossible imbued with patriotism to ensure smooth graduation of the country from the Least Developed Countries (LDCs).

"Be rest assured, we're doing as much as possible imbued with patriotism in this regard," he said.

The commerce adviser said this in an interview with the national news agency at his secretariat office recently while shedding light on the various aspects of the country's LDC graduation in November 2026 and subsequently facing the reaction from the private sector over the matter.

Regarding the reservation from the private sector in the country's LDC graduation in 2026, he raised question why the private sector had literally 'slept' over the issue for years and did not raise any such a strong voice.

Earlier, it was scheduled for 2024 for Bangladesh to be graduated, but it was delayed due to various reasons including the COVID-19 pandemic and other reasons. "It's true that I can't agree or disagree with the demands from the private sector. So, it's a 'paradoxical' situation,"

Bashir went on saying, "As because, if we agree with them, then the necessary reforms will fall again into sleep...Deferring the graduation is not at all depends on the will of the government. They (private sectors) will have to accept it."

Bangladesh has passed in all the three criteria for graduating from the LDCs while it is a different argument whether those are based on right information or data or on wrong information, he mentioned.

The Commerce Adviser said they had to make the crisis management following the unruly acts of the previous AL regime. "My team members are also trying hard with sincerity and patriotism and Insha Allah, hopefully we'll be able to reach into a welfare situation for the country," he continued.

Replying to another query, he said although it is not possible to carry out all the reforms, but definitely some would be carried out. "The rest will move forward dynamically."

Meanwhile, many including a section of economists and businesspeople, were in favour of deferment of LDC graduation by a couple of years.

They reasoned that the economy needed time to cope with the severe fallout of the pandemic, the Russia-Ukraine war, and high global inflationary pressure over the last few years.

While addressing a briefing recently, Shafiqul Alam, the chief adviser's press secretary, said the interim government had decided to keep to the schedule for availing the United Nations status graduation.

"The government has taken into consideration opinions from experts on whether the process would impact industries and settled on going for it," he said.

Besides, the chief adviser's press secretary said, benefits provided to Bangladesh for being an LDC would prevail for three years past the graduation.

Bangladesh has met all three preconditions for graduation, thanks to its economic development since the country attained independence in 1971.

The country was listed in the LDC grouping in 1975 to avail different benefits, such as zero-tariff and quota access to different countries, as the economy was on the verge of collapse following the Liberation War.

Such benefits have enabled Bangladesh to currently stand out as the second-largest garment exporter after China.

Bangladesh will lose trade worth over US$8 billion annually due to the withdrawal of post-LDC preferential trade benefits, for which the country would have to pay at least 12 percent duty on goods shipments.

Currently, 78 per cent of the country's exports avail LDC benefits in 38 countries.

The European Union (EU) has already assured that it will continue theLDC trade benefits for Bangladesh for three more years, up to 2029, asa grace period meant to enable a smooth transition.

The UK, Canada, and Australia have given similar commitments, exceptfor some conditions.​

 

[Saif]

Bangladesh must prepare for post-LDC challenges

Bangladesh is set to graduate from the least-developed country (LDC) club next year, which will bring several challenges in international trade.

www.thedailystar.net

Bangladesh must prepare for post-LDC challenges
CPD’s Mustafizur Rahman tells The Daily Star

Mustafizur Rahman

Bangladesh is set to graduate from the least-developed country (LDC) club next year, which will bring several challenges in international trade.

However, the country is not yet prepared to face these challenges, Prof Mustafizur Rahman, a distinguished fellow of the Centre for Policy Dialogue (CPD), said in an interview with The Daily Star.

Bangladesh has met the criteria for graduation in all three categories -- per capita income, human asset index, and economic vulnerability index. It is expected to be upgraded at the next UN General Assembly meeting, scheduled for November 2026.

"It is very difficult to justify deferring graduation from the LDC status, as demanded by many businessmen," he said, adding that even if graduation is delayed, only Bangladesh and Afghanistan will remain in LDC status in this region.

The chief adviser to the interim government last week ordered all concerned to prepare for LDC graduation on time and Prof Rahman echoed those sentiments, saying the focus now should be on preparing to face post-LDC challenges.

He said about 70 percent of Bangladesh's exports to other countries currently benefit from preferential trade agreements, which will be phased out after graduation.

For instance, tariffs in the European Union (EU) market will increase by around 11.5 percent after LDC graduation, while an additional 15 percent will be imposed in the Canadian market.

Increased tariffs in markets like the EU and Canada will pose new challenges, said Rahman, who was a professor at the Department of Accounting and Information Systems at Dhaka University before joining the CPD full-time.

"But we are not taking adequate preparation."

To stay competitive, Bangladesh must enhance enterprise-level productivity, streamline trade facilitation, and improve compliance.

"As we graduate from the LDC category, our priority should shift from preference-based competition to efficiency-driven competition."

Exporters' costs rise if trade facilitation and logistics are not up to the mark, so steps must be taken to reduce these costs.

Bangladesh must also improve labour and environmental standards. As an LDC, buyers and consumers in developed nations have overlooked these issues. Once the country graduates, international buyers will emphasise them.

"So, it is high time to start focusing on these issues," said Rahman.

After graduation, Bangladesh will have to comply with the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) regulations, which may create difficulties for the pharmaceutical sector in exporting products.

"So, we should prepare for these situations."

Meanwhile, Donald Trump has shaken global trade by imposing tariffs. Many believe countries like Bangladesh will benefit from the tariff barriers imposed on China, Canada and Mexico.

"I have a slightly different view," said Rahman. "I don't think we should rely heavily on this."

When Trump imposed a 25 percent tariff on China in 2016, Biden maintained it. During this period, Bangladesh had the opportunity to expand its ready-made garment (RMG) exports to the US, but it didn't see significant gains.

In fact, exports have slightly declined in recent years, said Rahman, who was awarded the Ibrahim Memorial Gold Medal by the University of Dhaka in 1999 for the best research work in economics.

China primarily exports non-cotton textiles, which make up around 80 percent of its total RMG exports, while Bangladesh focuses on cotton-based garments, creating market segmentation. Increased tariffs on China might benefit competitors in synthetic fibres but not Bangladesh, the economist clarified.

Moreover, such tariffs may negatively impact US economic growth and inflation, which, in turn, could affect global trade.

Instead of relying on geopolitical shifts, Bangladesh should enhance its competitiveness by reducing business costs, improving logistics, and increasing productivity.

Regarding free trade agreements (FTAs), the economist said Vietnam has 52 bilateral and multilateral free trade agreements, whereas Bangladesh has only one FTA with Bhutan.

This may be because signing FTAs requires offering lower import duties, a tough proposition considering that a significant portion of Bangladesh's revenue comes from duties.

Moreover, industrial and environmental standards will have to improve in factories, as FTAs operate on a reciprocal basis.

Since Bangladesh is set to graduate, there is no other option but to raise standards across all sectors, according to Prof Rahman.

Regarding economic stability, Rahman said several accumulated challenges existed when the interim government took power, and expectations were high.

"In the first and second quarters of the current fiscal year, economic pressure was intensifying. However, in the third quarter, some positive trends have emerged in certain indicators."

For example, Rahman said inflation remains high, but its rate has slightly declined. The availability of winter vegetables in the market during the third quarter has had a positive impact.

Besides, the adoption of a contractionary monetary policy, adjustments in revenue policies, and reductions in certain tariff rates were aimed at balancing fiscal and monetary policies. These measures seem to be having some effect, said the economist.

Another key factor is the external sector -- exports have seen double-digit growth, and remittances have recently experienced their highest growth in years.

As a result, the depletion of foreign currency reserves has halted, stabilising the exchange rate at around Tk 122 per dollar. The difference between the kerb market and the official exchange rate has also narrowed to about Tk 1.5 to Tk 2.

Consequently, imported inflation has somewhat decreased, positively impacting overall inflation, he said. However, inflation remains high, with both food and non-food inflation around 9 percent.

"This has continued to erode people's purchasing power, as wage growth has not kept pace with inflation.

"I believe there is still room for action in market mechanisms. One approach is to increase the number of active market players. Previously, a small group dominated imports, but as some have exited, new importers have entered the market," he commented.

"With greater competition, prices have stabilised to some extent."

He added that another persistent issue is extortion in certain areas. This must be addressed with a zero-tolerance policy.

Moreover, maintaining sufficient stock levels of key commodities and timely open market sales can help stabilise prices, he said.

Historically, poor data management has led to inaccurate decisions regarding production, import volumes, and stock releases. Addressing this issue can lead to more effective market interventions, the economist said.

The biggest concern is now investment. Since Bangladesh adopted a contractionary monetary policy to control inflation, interest rates have risen.

Besides, the banking sector is burdened by the significant accumulation of non-performing loans (NPLs), making it difficult to lower interest rates.

One of the major challenges is how to generate employment and how to reinvigorate investment so that entrepreneurs can actively engage.

Rahman said many investors are likely awaiting elections, hoping political uncertainty will subside afterwards, as investment decisions are usually made with a medium-term outlook.

Regarding the recovery of stolen money, Rahman, who was a member of the white paper formulation committee, said some initiatives have been undertaken.

The Bangladesh Bank has formed a special task force, and the Bangladesh Financial Intelligence Unit (BFIU) and the Anti-Corruption Commission (ACC) are also showing some activity.

However, this process needs to be expedited. Special prosecutions should be pursued where necessary. Recovering laundered money requires legal validation and the establishment of a paper trail to identify ultimate beneficiaries.

"The country must invest in this."

If other nations can recover laundered money, so can Bangladesh. Taking action now will also send a strong message that financial crimes will not go unpunished, he added.​

 

[Saif]

LDC graduation: Challenges and progress

For years, Bangladesh has been approaching a crossroads in its development journey. Having met the criteria for graduation from Least Developed Country (LDC) status in 2018, the government found itself in a conundrum.

www.thedailystar.net

LDC graduation: Challenges and progress

For years, Bangladesh has been approaching a crossroads in its development journey. Having met the criteria for graduation from Least Developed Country (LDC) status in 2018, the government found itself in a conundrum. While graduation symbolises progress and economic maturity, it also threatens to remove trade preferences amid declining foreign reserves, stagnating exports, reduced incentives, and supply chain weaknesses. External shocks, including the Russia-Ukraine war, Middle East tensions, and global inflation, have further complicated this decision.

Despite these challenges, the Bangladesh government has made the courageous decision that graduating from LDC status will strengthen the nation's long-term economic prospects. Rather than postponing, Bangladesh has chosen to face these challenges, refusing to bow to external pressures and signalling confidence in the country's resilience and capacity for adaptation.

However, Bangladesh's transition differs from that of other graduating countries. With around 84 percent of exports concentrated in the ready-made garments (RMG) sector, the nation faces a concentrated risk profile. Unlike other graduating LDCs with more diversified export portfolios, Bangladesh must navigate this transition while protecting its dominant industry and accelerating diversification efforts. This reality demands an exceptional level of preparation and coordinated action.

With LDC graduation, 74 percent of Bangladesh's exports will face market access changes. The EU will enforce stricter trade regulations, such as double transformation rules of origin and an automatic safeguard clause. While GSP+ is an option, it requires compliance with 32 international conventions, and Bangladesh may not qualify since exports exceed the 37 percent threshold. Although GSP benefits in the EU will remain until 2029 and market access to the UK and Australia will continue, trade relationships with Canada, Japan, China, South Korea, and SAFTA countries remain uncertain.

Unlike Vietnam and Cambodia, which have secured favourable regional and bilateral agreements, Bangladesh must now accelerate its trade diplomacy efforts to mitigate the impact of lost preferential access.

The decision to graduate comes at a time when foreign reserves have plummeted, exports have stagnated, and export incentives have been reduced by 60 percent. Many small and medium-sized factories that relied on these benefits have closed, exposing weaknesses in competitiveness due to rising costs. To ensure the sustainability of these businesses post-graduation, the government must implement support mechanisms such as technical assistance programmes, access to affordable financing, and productivity enhancement initiatives to help offset the removal of tax advantages and preferential market access.

The RMG sector, accounting for a major percentage of national export earnings, requires special attention. The WTO and UNCTAD reported a 5 percent decline in the global clothing trade in 2024, signalling tough times. While Bangladesh saw export growth earlier this year, a two-year comparison shows stagnation.

To protect this industry, steps must be taken to enhance competitiveness through technology upgrades, skill development, and product diversification. The government and industry stakeholders should collaborate to counter falling export prices and rising production costs. Despite meeting graduation criteria in 2018, Bangladesh has made limited progress in areas such as trade logistics, energy supply, and customs efficiency. Business costs remain high, and planned economic zones are not yet fully operational.

With graduation imminent, these infrastructure and policy bottlenecks must be addressed urgently. The government should create a task force to fast-track projects that impact export competitiveness, including power generation, transportation networks, and port facilities. Since GSP+ is unlikely to offer relief, securing bilateral trade agreements is imperative.

Bangladesh must overcome regulatory and structural challenges to make itself attractive for such agreements. This requires reforms to investment policies, intellectual property protection, customs procedures, and digital trade frameworks. A negotiation team with private sector representation should be established to pursue these agreements.

The author is a former director of the Bangladesh Garment Manufacturers and Exporters Associationb​

 

[Saif]

LDC graduation on time despite tariff turmoil

There is no going back for Bangladesh in its LDC graduation as the plane of status change has already taken off, a top-level meeting noted Tuesday and decided on measures to maximise its trade-economic benefits. "One should keep it in mind that we are not on the ground--we are flying to the

thefinancialexpress.com.bd

Trade negotiation agency soon to secure benefits

LDC graduation on time despite tariff turmoil
Top-level meet chaired by CA decides

FE REPORT
Published :
Apr 16, 2025 00:20
Updated :
Apr 16, 2025 00:20

There is no going back for Bangladesh in its LDC graduation as the plane of status change has already taken off, a top-level meeting noted Tuesday and decided on measures to maximise its trade-economic benefits.


"One should keep it in mind that we are not on the ground--we are flying to the crew side. We were supposed to take off in 2024 but we got extra years due to the Covid," said special assistant to the Chief Adviser on finance Anisuzzaman Chowdhury in metaphorical terms after the meeting.

He was briefing the press on the review meeting on LDC graduation with Chief Adviser of the interim government Professor Muhammad Yunus presiding, explaining why the country cannot defer the graduation now when it is on the cusp of a domestic political transition.

"After reviewing the preparations we have been satisfied that our plane will fly smoothly, we have not seen that much possibility of a crash, and we will be able to reach the crew side by 2026," Mr Chowdhury, the head of an expert committee on LDC graduation, told reporters at the press briefing narrating the outcome of the review.

Advisers of the interim government from finance, commerce, education, planning, environment, and education ministries, the central-bank governor, the special assistant to the CA on economic affairs and the BIDA executive chairman were present at the meeting.

"There is no other option now. In today's meeting we discussed about our preparation in detail. And we have identified our strengths and weaknesses," he said.

"There can be pressure on our employment, on private sector, and we have to take precautions to address these," he added.

Responding to a question on possible challenges, he said building institutional capacity for trade negotiation is the top-most challenge for the post-graduation period.

"To address this, the meeting has decided to immediately set up a separate trade-negotiation agency. The chief adviser has instructed the meeting to find out an experienced and capable person to head this trade-negotiation body."

He also said professionals from government and from private sector would be incorporated into the proposed negotiation agency, which will be launched within a very short time.

Asked about demand from different trade bodies for deferring the graduation, he said deferment is out of question now and all have to understand that the country's plane of graduation is already in flying mode.

He also argues on this score that many fear of losing duty-free market access during the post-graduation period but already a number of countries have told Bangladesh that they will continue the facility for Bangladesh even after the graduation.

The European Union, a critical market for Bangladesh, has agreed to extend the duty-free facility after the graduation, he reminds. Australia and Japan have told (us) the same.

"And during the recent investment summit, the United Kingdom mentioned they will provide us with the duty-free facility even after the graduation," he says to make his point that deferment is not necessary.

In this connection he mentions that poorer countries like Bhutan and Samoa have already graduated from the LDC status.

Terming the Trump tariffs a major turbulence, he said efforts had been initiated to address the situation and the challenges of the US tariffs would not only be for Bangladesh but also for other countries as well.

Regarding the assessment that the country will lose US$10 billion in export earnings after graduation he said this figure was based on static data because this does not include the perspective that many of the major importers will continue to extend duty-free facilities.

Responding to a question on managing the impact of graduation on foreign aid as Bangladesh will be deprived of the concessional loan during the post-graduation era, he quipped dependence on aid is a "colonial hangover" and Bangladesh needs to get out of this spell.

He mentions that due to this dependency on foreign aid the country's tax-GDP ratio could not be raised.

Owing to an aid spree initiated after 2010, the tax-to-GDP ratio got reduced from 10 per cent in 2010 to 6.0 per cent, he said, adding that domestic resource mobilisation must be enhanced to ensure sustainable development.

Asked about the advantages of graduation, he said it would help in attracting foreign investment and in fulfilling the dream of turning the country into a manufacturing hub.

Shafiqul Alam, press secretary to the CA, said during the nearly two-hour meeting, the Chief Adviser directed all concerned to take steps to ensure maximum benefits as Bangladesh remains confident of smoothly graduating from the LDC status.

Prof Yunus mentioned that Bangladesh would be a "manufacturing and economic hub in the region" and discussed how to make it in a better way after the graduation from the club of world's least-developed countries.

The press secretary said the Chief Adviser also stressed the need for constant monitoring by a dedicated team so that no turbulence is seen on this journey as "it is very critical part".​

 

[Saif]

No pulling back on LDC graduation

The recent high-level meeting chaired by the Chief Adviser of the interim government has reaffirmed Bangladesh's commitment to graduate from the Least Developed Country (LDC) category in 2026. With this, any lingering uncertainty about deferring the transition has effectively been dispelled. As the

thefinancialexpress.com.bd

No pulling back on LDC graduation
Published :
Apr 17, 2025 21:52
Updated :
Apr 17, 2025 21:52

The recent high-level meeting chaired by the Chief Adviser of the interim government has reaffirmed Bangladesh's commitment to graduate from the Least Developed Country (LDC) category in 2026. With this, any lingering uncertainty about deferring the transition has effectively been dispelled. As the meeting aptly observed, the country's journey towards graduation, the long awaited milestone, has already taken off, there is no turning back.

While the milestone reflects remarkable progress achieved so far, it comes with significant challenges. Chief among them is the termination of trade preferences, which currently benefit the country due to its LDC status. Acknowledging this, the meeting highlighted the urgent need to build a strong institutional capacity for trade negotiations in the post-graduation landscape. To that end, it has been decided that a dedicated trade negotiation agency will be established immediately. The Chief Adviser has also made it plain that an experienced and competent individual will be appointed to head this new body.

LDC graduation, like many good things, comes with an opportunity cost-an economic trade-off, as economists would frame it. Graduation signifies more than just improved metrics on paper; it represents a belief by the international community that the graduating country has overcome structural weaknesses that once justified special and preferential support. Consequently, the privileges long enjoyed under the LDC category-such as concessional loans and preferential trade access-will gradually disappear. For decades, Bangladesh's economy has reaped substantial benefits from such supports, particularly under schemes like the Generalised System of Preferences (GSP). The rise of the country's apparel sector as a dominant player in global trading is attributed to such a preferential treatment. While global trends towards tariff reductions and regional agreements have already reduced some of these advantages, Bangladesh continues to be one of the largest beneficiaries of LDC-related trade preferences, especially from the EU. Culmination of preferences is thus the prime issue that worries the businesses. To address this, preparedness is paramount. The transition must be strategically managed to mitigate negative impacts and harness new opportunities. Economic resilience will depend on improving governance, boosting institutional efficiency, and embracing a forward-looking mindset. Dynamism in investment, job creation and productivity will also be essential to sustain post-graduation growth.

LDC graduation should not be viewed as an end in itself, but rather as the beginning of a new chapter. It marks a shift to a more competitive and self-reliant development path, where gains must be consolidated through consistent effort and reform. The emphasis must be on building a more productive and competitive economy-one that can thrive without special treatment and compete effectively in global market. The decision to move forward with LDC graduation is both bold and timely. While the road ahead is indeed complex, proactive measures-such as institutional strengthening and capacity building-will be key to navigating the post-graduation era. With vision, commitment, and strategic planning, the country can not only weather the transition but also emerge stronger and more resilient in the global economic landscape.​

 

[Saif]

Post-LDC challenges and the future of Bangladesh's exports

The path ahead is becoming clearer, and more complicated.

www.thedailystar.net

Post-LDC challenges and the future of Bangladesh's exports
Bangladesh export future after LDC graduation

FILE VISUAL: SHAIKH SULTANA JAHAN BADHON

As Bangladesh approaches its graduation from the Least Developed Country (LDC) category, the anticipated challenges of losing preferential trade benefits are already manifesting. The United States has recently imposed a 37 percent reciprocal tariff on imports from Bangladesh, which is a significant blow to the latter's exports. Though the tariff's execution has been temporarily put on hold, if not resolved in time, this sudden increase threatens to erode the country's competitiveness in its largest export destination.

Concurrently, India has withdrawn the transshipment facility that previously allowed Bangladeshi exports to third countries via Indian ports and airports. This decision, which the Indian authorities claim is aimed at alleviating congestion and costs in India's own export channels, is expected to disrupt Bangladesh's export logistics, particularly affecting shipments to some countries. These developments underscore the urgent need for Bangladesh to diversify its export portfolio, invest in infrastructure development, revisit the trade architecture, and engage in strategic trade negotiations to mitigate the impacts of its LDC graduation.

The path ahead is becoming clearer, and more complicated. While diversification has long been a talking point, it is now a matter of survival. Relying on the export of ready-made garment (RMG) products alone is no longer an option. Bangladesh must invest in building up sectors that have already shown early signs of promise. Pharmaceuticals, ICT, and agro-processing are no longer fringe players. They are contenders, capable of anchoring the next chapter of the country's export story. Take pharmaceuticals, for instance. The world's appetite for generic medicine continues to grow, and Bangladesh has both the factories and the know-how to meet that demand. The transition from the LDC status could actually open the door for producing patented drugs, a game-changer if handled right.

But shifting what we sell is only half the equation. Where we sell must change too. For years, Bangladesh's export playbook has read like a short list: the European Union, the US, Canada—dependable, but limited. The world is bigger than that. Africa, South America, the Middle East and even some large economies in Asia are waking up as consumer markets. These are regions with rising demand, growing populations, and very few Bangladeshi products on their shelves. Cracking these markets will not be easy. It will mean understanding local tastes, building smarter logistics, and pricing with precision. But the opportunity is real, and the timing has never been better.

The other force reshaping competitiveness is less visible but equally powerful: technology. Automation, artificial intelligence, and real-time data have changed how factories run and decisions are made. In Bangladesh, these tools have been met with some hesitation, and understandably so. Fear of job losses is not unfounded. But the truth is, technology can enhance jobs as much as it replaces them. A sewing machine operator can become a line technician. A production supervisor can become a systems analyst. What is needed is training—not just any training, but programmes that are fast, focused, and aligned with the real industry needs. If done right, automation does not hollow out the workforce; rather it strengthens it.

None of this will matter, though, if the product gets stuck at port. Bangladesh has an infrastructure problem, which has been dragging down competitiveness for years. Roads get clogged too easily, customs clearances move too slowly, and ports often lag behind demand. The result is cost: exporters lose both money and time. According to the World Bank, logistics eat up nearly one-fifth of export costs in Bangladesh. That is double what many of our competitors face. Fixing this will take more than patchwork solutions. It will require a systemic overhaul—faster customs, smarter ports, and better roads—because the supply chain has to move as fast as the market it serves.

As the world grows more demanding, compliance is no longer a choice. It is the ticket to staying in the game. Product safety, labour rights, and environmental responsibility are the new benchmarks. Global buyers want transparency, certifications, traceability, and proof that what they are sourcing is ethical. This means companies must invest in more than just machines. They must invest in processes that show compliance and in people who can manage it. The government must play a part in this as well. Streamlined standards, quicker approvals, and constant engagement with exporters will make the difference between staying competitive and falling behind.

Trade diplomacy, once a quiet background act, now needs a front-row seat. The era of simply receiving trade perks is ending. Bangladesh must learn to negotiate on its own terms. It will not be easy, but the playbook is out there. Vietnam, with its network of deals stretching from Europe to Asia, has shown what is possible when trade is treated as strategy. Bangladesh has the size, the location, and the market to cut its own deals; what it needs now is the will to execute.

Sustainability, once seen as a luxury, is fast becoming a business requirement. Major retailers are making it clear: green practices are no longer treated as an add-on. And Bangladesh, surprisingly, is already ahead of the curve. The country is home to the largest number of certified green RMG factories in the world, which gives us a competitive edge. The next step is to scale that success and make it visible to the global consumer. Sustainability should not just be part of the story. It should be THE story.

The choices Bangladesh makes in the next few years will define the next few decades. Graduation from the LDC status is not the end of the journey, but the beginning of a harder one. A journey that will test the depth of strategy, the speed of execution, and the strength of collective will. But as history has shown, Bangladesh has never lacked resolve. The real question now is whether it can turn that resolve into reinvention.

Mamun Rashid, an economic analyst, is chairman at Financial Excellence Ltd and founding managing partner of PwC Bangladesh.​

 

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Govt urged to move to defer country's graduation from LDC as it lacks readiness

Speakers from a diverse coalition of national and international stakeholders have urged the government to move a request to defer the country's graduation from the Least Developed Country (LDC) category, currently scheduled on 24 November 2026. They made the call at a roundtable on "Bangladesh's L

thefinancialexpress.com.bd

Govt urged to move to defer country's graduation from LDC as it lacks readiness
Published :
Apr 23, 2025 22:24
Updated :
Apr 23, 2025 22:24

Speakers from a diverse coalition of national and international stakeholders have urged the government to move a request to defer the country's graduation from the Least Developed Country (LDC) category, currently scheduled on 24 November 2026.

They made the call at a roundtable on "Bangladesh's LDC Graduation: Between Readiness and Reality," organised by the Change Initiative, a think tank, at a hotel in the city on Wednesday, UNB reports.

They cited those significant economic headwinds amid recent political turmoil and potential severe negative impacts if graduates with insufficient preparedness.

Estiaque Bari, head of research, Change Initiative in his keynote presentation underscored that Bangladesh’s upcoming LDC graduation is likely to impact 71.5% of its exports, with projected tariff hikes of 8.7% in the EU, 9.1% in the UK, and up to 15.8% in Japan for key sectors like footwear and garments.

“As Bangladesh prepares to graduate, with 81% of its exports dependent on the RMG sector and tariffs set to rise across key markets and product segments in the absence of critical trade agreements, the risks extend far beyond just the loss of trade and financial preferences”, he said.

Amir Khasru Mahmud Chowdhury, member, National Standing Committee of BNP, said "Bangladesh stands at an inflection point, but the foundation of its development narrative is hollow—manipulated figures, collapsed financial institutions, and a dangerously narrow export base.

“LDC graduation cannot be built on broken systems... True transition demands... people’s representation in decision-making. Without democratic legitimacy, no milestone is meaningful,” he added.

Zonayed Saki, chief coordinator, Ganosamhati Andolan, aligned with the perspective, “Graduation is inevitable-but the real question is: is today the right time? LDC status is not a matter of ego, it’s a matter of readiness.

Sadia Farzana Dina, joint chief coordinator of National Citizen Party said that without reliable data, institutional reform, and a national dialogue, rushing this transition could threaten our economic survival.

"The consensus emerging from this critical dialogue is clear: proceeding with LDC graduation in 2026, under the current circumstances, poses unacceptable risks to Bangladesh's economic stability and development gains," said M. Zakir Hossain Khan, chief executive of Change Initiative.

“LDC graduation is neither a badge of prestige nor a policy formality-it is a deeply political and structural shift”, he observed.

Professor Mushtaq Khan of SOAS, University of London, commented, “LDC status is not a formality-it’s a negotiated privilege tied to global protections. Bangladesh is on track to graduate, but without critical homework.

“We’re exiting while our banking system remains broken, our power sector contracts are riddled with corruption, and our export competitiveness is hollow beyond garments”, he said.

Representing the international business community, Nuria Lopez, Chairperson, European Union Chamber of Commerce in Bangladesh, stressed the human cost and the imperative for government action: “Without an extension, 2.5 million unskilled workers risk being left behind as green industries rise. Bangladesh must set aside ego and prioritize workforce upskilling, productivity, and investment in R&D to ensure a just transition”.​

 

[Saif]

'India will benefit from Bangladesh’s premature graduation’ from LDC status

One of the main beneficiaries would be India. If Bangladesh loses its trade privileges, India stands to gain the most.

en.prothomalo.com

Economist warns of danger
'India will benefit from Bangladesh’s premature graduation’ from LDC status

Staff Correspondent Dhaka
Published: 23 Apr 2025, 21: 35

Guests attend a roundtable discussion titled "Bangladesh’s Graduation from Least Developed Country (LDC) Status: Preparations and Realities" held today, Wednesday at a hotel in the capital. Photo: Prothom Alo

Economist Mushtaq Khan expressed concerns over Bangladesh’s lack of preparation for graduating from the United Nations' list of Least Developed Countries (LDCs).

He believes if Bangladesh graduates from LDC status, it will lose tariff-free trade benefits, face higher interest rates on foreign loans, and domestic industries will be exposed to intense competition, potentially leading to the shutdown of many factories.

Mushtaq Khan, a professor at the School of Oriental and African Studies (SOAS), University of London, shared these views at a roundtable discussion titled “Bangladesh’s Graduation from Least Developed Country Status: Preparations and Realities,” organized by the organisation Change Initiative at a hotel in Dhaka's Gulshan area today, Wednesday.

Politicians, economists, academics, researchers, and government officials attended the event.

Mushtaq Khan also said competitor countries want Bangladesh to graduate from LDC status, as it benefits them. One of the main beneficiaries would be India. If Bangladesh loses its trade privileges, India stands to gain the most.

He warned that if Bangladesh applies to the United Nations to delay its graduation, competitor countries might oppose it. They will desire that the application of Bangladesh is not considered.

At the event, Change Initiative’s Head of Research, Ishtiaq Bari, presented an overview of Bangladesh’s graduation process. He noted that Bangladesh has met all three criteria for LDC graduation and is scheduled to officially graduate on 24 November 2026.

In some regions, Bangladesh will continue to receive tariff-free access until 2029, and patent-related exemptions for pharmaceutical production will last until 2033.

In his presentation, Ishtiaq Bari noted that no country can unilaterally delay its graduation. To do so, a country must submit a request to the UN Committee for Development Policy (CDP) with strong supporting arguments. The CDP will then evaluate the request and a final decision will be made by the UN General Assembly.

After the July mass uprising, the interim government initially considered delaying the graduation but later withdrew from that plan. On 13 March, the Advisory Council decided to proceed with the graduation as scheduled.
As an LDC, Bangladesh currently enjoys duty-free export privileges in markets like Europe, access to low-interest foreign loans, and the ability to impose higher tariffs on imported goods. Graduation would mean losing these benefits and facing more competition from imported products with lower tariffs.

Mushtaq Khan asked, "Can Bangladeshi producers compete with products from China and India? Are the country’s electronics, processed food, and pharmaceutical industries ready? Is Bangladesh overall ready?"
He said, "I don’t see the evidence."

He highlighted a major concern regarding apparel exports to the European market: automatic tariff imposition. If a country’s exports exceed a certain threshold of the EU’s total imports for a particular product, tariffs are automatically applied. Bangladesh’s apparel exports have already crossed that threshold. Even though the EU has granted Bangladesh tariff-free access for three more years, this automatic tariff mechanism could reduce competitiveness.

Mushtaq also noted that a major European buyer has expressed concern over Bangladesh’s premature graduation.

He mentioned that Bangladesh might still be able to request a few extra years before graduating, by presenting three evidence-based arguments to the UN Economic and Social Council (ECOSOC):

Premature graduation could increase poverty in Bangladesh, which is a concern ECOSOC takes seriously.

Ongoing instability in global trade caused by US President Trump’s trade wars makes graduation risky.

Fifteen and a half years of authoritarian rule have severely damaged Bangladesh’s institutions and economy, requiring more time for recovery.

Mushtaq suggested Bangladesh engage with other countries like Nepal and Bhutan, which are also interested in delaying graduation. If Bangladesh makes the request alone, competitors like India might block it—especially since relations with India are currently not favourable.

He proposed that Bangladesh form a coalition with like-minded countries and approach the United Nations together, increasing the chances of securing a delay.

BNP standing committee member Amir Khasru Mahmud Chowdhury was present as a special guest. He questioned the economic data compiled under the ousted Awami League government, which has been used to justify LDC graduation. He mentioned issues like the troubled financial and banking sectors, and lack of export diversification.

Amir Khasru said that the graduation decision should reflect the will of the people. Over the past 15 years, Bangladesh lacked democracy, but now hopes for a return. A future elected government should make the final decision, following debates in parliament.

He emphasised the need to initiate efforts to delay graduation and allow the people’s representatives to debate and decide.

Cynthia Mela, Country Director of the French development agency AFD, Ayub Bhuiyan, General Secretary of the Press Club, AKM Sohel, additional secretary of the Economic Relations Division, Nuria Lopez, Chairperson of the EU Chamber of Commerce in Bangladesh, Mohammad Asaduzzaman, Co-founder of Dhaka Institute of Research and Analytics and Md Zakir Hossain Khan, CEO of Change Initiative, among others, spoke at the event.​

 

[Saif]

LDC graduation: Bilateral partnership agreements can mitigate loss of preferential access

Graduation from Least Developed Country (LDC) status to a developing nation is a new milestone in the development journey of Bangladesh. Upcoming graduation in November 2026 is a testimony of the strides that Bangladesh has made over the decades in improving income levels, reducing poverty and fost

thefinancialexpress.com.bd

LDC graduation: Bilateral partnership agreements can mitigate loss of preferential access
T I M Nurul Kabir
Published :
Apr 30, 2025 00:06
Updated :
Apr 30, 2025 00:06

Graduation from Least Developed Country (LDC) status to a developing nation is a new milestone in the development journey of Bangladesh. Upcoming graduation in November 2026 is a testimony of the strides that Bangladesh has made over the decades in improving income levels, reducing poverty and fostering human development. While exit from the LDC group is an obvious recognition of progress and economic maturity, graduation nonetheless poses a new set of challenges, especially for the export-oriented sectors.

As LDC, Bangladesh has been enjoying 'zero tariff benefits' under the Generalised Scheme of Preferences (GSP) of the European Union. 'Everything But Arms' (EBA) initiative was introduced in 2001, as per which almost all products, except arms and ammunition, originating from LDCs got duty-free and quota-free access to the EU market. Graduation from LDC will mark the end of trade benefits under the EBA regime for Bangladesh.

Bangladesh enjoys zero-duty benefits in developed and developing countries under the World Trade Organisation (WTO) declaration approving duty exemptions for all goods originating in LDCs. The US government did not fully comply with the declaration, and so garment exporters in Bangladesh have faced a 15.62 per cent duty on apparel exports to the US.

Bangladesh receives preferential treatment in 38 countries. Of the total merchandise shipped from Bangladesh annually, 73 per cent is LDC-induced. Around 84 per cent exports from Bangladesh comprises readymade garments (RMG).

The EU and the UK combined account for almost 60 per cent of merchandise exports from Bangladesh and more than 90 per cent of those export earnings come from RMG industry. Except for the US, which accounts for approximately 16 per cent of the exports, Bangladesh enjoys duty free market access in all major export destinations including Australia, Canada, India, Japan and China;.

Apart from direct trade benefits, Bangladesh enjoys Special and Differential Treatment (SDT), which includes Trade Related Intellectual Property Rights (TRIPS). Under the TRIPS agreement Bangladesh enjoys free access to numerous Intellectual Property Rights (IPRs). The TRIPS allows pharmaceutical companies in Bangladesh to manufacture patented drugs without paying royalty fees. Nullification of TRIPS after LDC graduation would affect the pharmaceutical industry adversely and put significant burdens on exporting industries reliant on the TRIPS agreement.

Once Bangladesh graduates from LDC category, local exporters may face an 11.5 per cent duty in major export destinations in the EU. On the other hand, duty imposed on exports in some emerging markets could be as high as 20 per cent in India and 18 percent in Japan. It is estimated that increased tariffs could result in decrease in exports ranging from 5.5 per cent to as high as 14 per cent. The loss of preferential market access, especially for the garments sector, will be a major challenge for Bangladesh after LDC graduation.

LDC graduation will also bring restriction on providing subsidies to bolster the export sector. So far, Bangladesh has been implementing extensive export subsidy programme to support the apparel and other export industries. According to the WTO rules, developing and developed nations are not allowed to provide direct cash subsidies on export receipts.

The WTO Ministerial Conference took the decision in 2024 to give preferential access facilities to graduating LDCs for three more years. The EU, the UK and some countries such as Canada and Australia have already agreed to continue duty-free access benefits for Bangladesh up to 2029. Trade relationship with Japan, China, South Korea and the South Asian countries will, however, depend on bilateral negotiations.

Graduating from the LDC group does not necessarily imply loss of preferential treatment. Developing Countries Trading Scheme of the UK would continue to provide improved market access after graduation to developing economy. Proactive engagements with the EU may pave the way to secure similar preferences.

An extension of the regular GSP, the GSP+ scheme is a special incentive arrangement for 'vulnerable developing countries'. The GSP+ scheme for Sustainable Development and Good Governance grants full removal of tariffs on over 66 per cent of EU tariff lines. To qualify for the GSP+ scheme, Bangladesh has to fulfill the 'vulnerability' criteria set by the European Union and ratify 27 international conventions. Moreover, Bangladesh is unlikely to qualify for being a large supplier to the EU, as under the GSP+ scheme an exporting country's share in total EU import should not exceed 7.4 per cent.

It is important for Bangladesh to maintain economic strength and resilience, which has been made obvious by the fact that Bangladesh has outperformed all previously graduated LDCs by fulfilling all three criteria of graduation: gross national income (GNI) per capita, human assets index (HAI), and economic and environmental vulnerability index (EVI). Fulfilling any two of the criteria would suffice for graduation from LDC.

To overcome the challenges arising from loss of preferential market access, Bangladesh needs to engage in proactive negotiations with major trading partners to sign Free Trade Agreements (FTAs), Economic Partnership Agreements (EPAs), Comprehensive Economic Partnership Agreements (CEPAs) and Preferential Trade Agreements (PTAs).

Bangladesh signed its first bilateral PTA with Bhutan in December 2020. Engagements for penning agreements with 13 major trade partners are ongoing, including China, India, Japan, and the US.

The first session of formal negotiation with Japan to sign a trade deal allowing manufacturers to retain duty-free export benefits after LDC graduation was held in Dhaka in May 2024. Both sides have set the goal to conclude the negotiations for signing EPA by December 2025. Japan is Bangladesh's 12th largest trading partner in exports and seventh-largest in imports.

Bangladesh and South Korea have begun negotiations to accelerate trade and investment growth through bilateral EPA. Both countries announced the commencement of these negotiations by signing a memorandum of understanding (MoU) in November 2024. The Republic of Korea was the first country to set up an exclusive foreign Export Processing Zone (KEPZ) in Bangladesh and is till date one of the top sources of Foreign Direct Investment (FDI). Bilateral trade between Bangladesh and Korea registered US$ 2.3 billion in 2023.

India is the largest neighbour and the second biggest trade partner of Bangladesh in Asia. Bilateral talks to initiate negotiations on a CEPA between Bangladesh and India have been underway, with the goal to enhance economic relations, streamline trade processes, and promote investment between the two countries.

It is also crucial for Bangladesh to forge strategic regional and global partnerships to maintain growth as a developing economy. Strengthening economic partnerships with emerging economies and exploring new markets in Asia, Africa, and Latin America would widen up opportunities of growth as well as mitigate the risks associated with overreliance on developed markets in EU and the US.

Overreliance on the RMG sector makes Bangladesh economy vulnerable in face of tariffs and external shocks. Bangladesh has to prepare cautiously to navigate transition to developing economy and accelerate its economic diplomacy engagements to mitigate the impact of lost preferential access. It is imperative for Bangladesh to take up pragmatic steps to protect its dominant industry and speed up efforts for economic diversification.

T I M Nurul Kabir, Executive Director, Foreign Investors Chamber of Commerce and Industries (FICCI) is an analyst on Business, Technology and Policy.​

 

[Saif]

Bangladesh lags behind Ldc-graduating peers in public spending and revenue mobilisation efforts

Bangladesh’s fiscal deficit is projected to remain above 4 percent of GDP through 2026, as revenue growth continues to fall short of expanding public expenditure.

www.thedailystar.net

Bangladesh lags behind Ldc-graduating peers in public spending and revenue mobilisation efforts

Bangladesh's fiscal deficit is projected to remain above 4 percent of GDP through 2026, as revenue growth continues to fall short of expanding public expenditure.

Despite rising development needs, the country allocates a significantly smaller share of its economic output to public spending than its South and Southeast Asian peers. In 2025, Bangladesh's public expenditure stood at just 13.0 percent of GDP, compared to 23.4 percent in Nepal, 18.4 percent in Lao PDR, and 17.9 percent in Cambodia. The trend is expected to persist in 2026, with Bangladesh projected to spend 14.0 percent of GDP.

At the same time, Bangladesh's revenue mobilisation remains among the weakest in the region. Government revenue is forecast to rise to only 9.8 percent of GDP by 2026, well below levels seen in countries with comparable or even lower income levels.

Public debt is rising gradually but remains modest relative to regional norms. Bangladesh's debt-to-GDP ratio is expected to reach 40.7 percent in 2026, up from 37.9 percent in 2022. Economists view the trajectory as broadly sustainable, though they caution that further borrowing capacity may depend on tangible improvements in tax collection and the efficiency of public investment.​

 

[Saif]

Govt for swift, coordinated action for LDC graduation

Chief adviser Muhammad Yunus on Sunday called for urgent and coordinated action from all relevant agencies to ensure Bangladesh’s smooth and timely graduation from least developed country status...

www.newagebd.net

Govt for swift, coordinated action for LDC graduation
Bangladesh Sangbad Sangstha . Dhaka 11 May, 2025, 22:43

Muhammad Yunus

Chief adviser Muhammad Yunus on Sunday called for urgent and coordinated action from all relevant agencies to ensure Bangladesh’s smooth and timely graduation from least developed country status.

He made the call during a high-level meeting with LDC Graduation Committee at the state guest house Jamuna, where progress on key deliverables was reviewed.

‘This whole thing is about coordination,’ the chief adviser said.

‘We already have the attention and support of investors, funders and development partners. Now, we must build on the efforts already underway and intensify our collective action to move forward with speed and purpose,’ he said.

Emphasising the importance of institutional readiness, Yunus called upon all stakeholders to move in unison.

‘We need a team that functions like firefighters. When the whistle blows, they must respond-fast, efficiently, and without delay and stay at the problem until it is solved,’ he said.

The chief adviser further assured that the Chief Adviser’s Office would take an active role in overseeing the process.

‘The highest office of the government will personally monitor the implementation of all graduation-related initiatives,’ he added.

During the meeting, the LDC Graduation Committee identified five priority actions that must be completed on an urgent basis.

The actions are: making National Single Window fully operational with participation from all relevant agencies; implementation of National Tariff Policy, 2023 through a clear action plan; execution of key measures under National Logistics Policy, 2024, including infrastructure projects; operational readiness of Effluent Treatment Plant at Savar Tannery Village; and full-scale operation of Active Pharmaceutical Ingredient Park in Gajaria, Munshiganj.

‘These aren’t just routine tasks-we need to see them as key steps, each one helps clear the way for our graduation and builds a stronger, fairer economy for everyone’, the chief adviser added.

Finance adviser Salehuddin Ahmed, chief adviser’s special assistant Anisuzzaman Chowdhury and special envoy for international affairs Lutfey Siddiqi attended the meeting, alongside members of the LDC Graduation Committee and policy advisers.​

 

[Saif]

Budget should draw clear roadmap for smooth LDC GRADUATION

The upcoming national budget must outline a comprehensive roadmap to prepare for the country’s graduation from the least developed country (LDC) club in 2026, prioritising tariff rationalisation, tax reform, and sustainable fiscal policies, according to a leading business leader.

www.thedailystar.net

Budget should draw clear roadmap for smooth LDC GRADUATION
Says FICCI President Zaved Akhter in an interview with The Daily Star

Zaved Akhter

The upcoming national budget must outline a comprehensive roadmap to prepare for the country's graduation from the least developed country (LDC) club in 2026, prioritising tariff rationalisation, tax reform, and sustainable fiscal policies, according to a leading business leader.

"As Bangladesh approaches LDC graduation, the budget must demonstrate our readiness through tariff rationalisation and tax reforms," said Zaved Akhter, president of the Foreign Investors' Chamber of Commerce and Industry (FICCI).

In an interview with The Daily Star, Zaved emphasised fiscal measures that support compliant labour practices, sustainable business models, and alignment with environmental, social, and governance (ESG) standards -- key considerations for the post-LDC landscape.

First and foremost, he said that Bangladesh's tax system must be simplified by introducing a unified national value-added tax (VAT) rate.

"Our tax structure is complex, with multiple VAT rates across sectors. We need to simplify it by adopting a single national VAT rate, akin to the goods and services tax (GST) model used in other countries," said the FICCI president.

The existing system, fragmented by varying rates, creates confusion and compliance issues, according to the business leader. The question now, he said, is how effectively this transition can be implemented.
​

​

"We cannot impose a unified VAT nationwide overnight. Instead, we should pilot it in a specific region, assess its impact on revenue collection, and then gradually expand to other areas and sectors," suggested Zaved, who is also the chairman and managing director of Unilever Bangladesh Ltd.

He advocated for reducing reliance on indirect taxes by broadening the direct tax base.

"We need to focus on expanding the tax net to capture more taxpayers, instead of over-relying on regulatory and supplementary duties," he said.

Zaved also called for transforming customs from a revenue-centric body to a facilitative agency.

"There's a misconception that customs only exist for revenue collection. It must also act as a facilitator," he said, adding, "We need an integrated digital information network that connects all tax departments."

Currently, these departments rarely communicate, hindering effective revenue collection, he commented.

"Better coordination with other government agencies could unlock significant revenue potential. If such interconnection is enabled, different government verticals could synchronise their services," Zaved said.

On the National Board of Revenue's (NBR) push towards cashless transactions, he said, "We talk about a cashless society, yet the infrastructure is far from ready. So how can we realistically transition to it?"

Sharing a personal experience, the Unilever Bangladesh chairman said, "Despite all the talk of a 'cashless market', when I pay VAT to the government, it can't be done digitally. I have to withdraw cash and pay the relevant officials. Why can't it go through the system directly?"

Therefore, he urged the authorities to raise the Tk 36 lakh cap on annual cash transactions to qualify for the reduced 25 percent corporate tax rate.

"We are hopeful that the NBR will introduce a forward-thinking, investor-friendly revenue policy -- one that curbs leakages while encouraging a competitive tax environment," he said.

'POLICY CONSISTENCY A MUST FOR ATTRACTING FDIs'

Foreign direct investment (FDI) in Bangladesh has remained persistently low, hovering below 1 percent of gross domestic product (GDP).

"We're even trailing behind Pakistan in attracting FDI," Zaved said.

But Bangladesh holds huge potential to draw foreign investment in sectors such as leather and agricultural processing, from farm-level operations to the full supply chain.

"To tap into this potential, policy consistency is crucial. One of our biggest weaknesses is the frequent and abrupt policy shifts," he said.

The business leader cited a recent example of an incentive scheme for electronics products that was withdrawn without prior notice last year.

"I understand the government had its reasons, but you can't just pull an incentive mid-flight. Investors might have already set up factories based on that incentive. At the very least, you should announce a future termination date rather than a retroactive withdrawal," he said.

Reflecting on the recent Bangladesh Investment Summit, Zaved said, "The summit helped restore some credibility for Bangladesh. It sent a positive signal that the country remains on track despite recent political changes."

'REFORM TO RETAIN INVESTORS'

The FICCI president identified two major reforms to increase investment. First, the separation of the NBR's policy and administrative functions, a process that is already underway.

Secondly, he sought the consolidation of investment facilitation agencies.

At present, investors navigate multiple agencies, such as Bangladesh Export Processing Zones Authority (Bepza), Bangladesh Investment Development Authority (Bida), Bangladesh Economic Zones Authority (Beza), Hi-Tech Park Authority, which he said "creates unnecessary confusion".

Zaved urged the government to set up a single investment authority to simplify the services.

"Investors shouldn't be running between 141 departments to get approvals. We need a genuine one-stop service that handles everything from licences to utilities -- like a relationship manager in banking," he said.

"If Bangladesh remains complicated while other countries simplify their systems, we'll keep losing out," he added.​

 

[Saif]

ICCB for strong SMEs to overcome LDCs challenges

International Chamber of Commerce Bangladesh (ICC-B) on Monday laid emphasis on strengthening SMEs to overcome challenges Bangladesh will face after its graduation from Least Developed Countries...

www.newagebd.net

ICCB for strong SMEs to overcome LDCs challenges
Bangladesh Sangbad Sangstha . Dhaka 12 May, 2025, 22:59

International Chamber of Commerce Bangladesh (ICC-B) on Monday laid emphasis on strengthening SMEs to overcome challenges Bangladesh will face after its graduation from Least Developed Countries.

‘SMEs are the backbone of any economy for its growth, development and employment generation. With the graduation to middle income country in 2026, Bangladesh will be facing tight competition from its competitors. Strengthening the SMEs will make immense contributions in the entire supply chain process,’ said ICCB vice-president A K Azad.

He said this while inaugurating a workshop on ‘Find and pursue the right standards for your business: A Hands-on workshop with the SME Toolkit in collaboration with the Asian Development Bank’s (ADB) Trade and Supply Chain Finance Program (TSCFP) and International Trade Centre (ITC)’ in the city, said a press release.

ICCB secretary general Ataur Rahman moderated the session while ITC associate programme officer Dang Tuan Ducand and software engineer Niklas Anders ANDERSSON delivered their presentations on different topics during the workshop.

Azad said Bangladesh also has to be compliance and ensure sustainability for export growth.

As such today’s workshop has been organized to engage textile, apparel, and footwear manufacturers in the pilot testing of the ITC or ADB Sustainability Standards Navigation Toolkit, he added.

He said the Toolkit has developed to help SMEs enhance their awareness of sustainability standards, assess their readiness for certification, and receive actionable recommendations for sustainable practices and compliance for export.

Azad thanked ADB TSCFP and ITC for taking the initiative in developing the toolkit and ensure that ICC Bangladesh will continue to organize workshops for strengthening the capacity of the SMEs to increase their exports.

About 40 participants from SMEs including apparels, textiles & leather industries and other corporate houses attended the workshop.​

 

[Saif]

Stakeholders urge Bangladesh to prepare for challenges ahead of LDC graduation

As Bangladesh prepares to graduate from Least Developed Country (LDC) status in 2026, stakeholders at a seminar underscored the urgent need for strategic preparation to overcome post-graduation challenges. With the imminent loss of duty-free market access, GSP benefits, and other trade incentives,

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Stakeholders urge Bangladesh to prepare for challenges ahead of LDC graduation
FE ONLINE REPORT
Published :
May 15, 2025 17:12
Updated :
May 15, 2025 17:12

As Bangladesh prepares to graduate from Least Developed Country (LDC) status in 2026, stakeholders at a seminar underscored the urgent need for strategic preparation to overcome post-graduation challenges.

With the imminent loss of duty-free market access, GSP benefits, and other trade incentives, they emphasised that Bangladesh must enhance product quality, diversify exports, adopt modern technologies, and explore new markets to remain competitive in the global arena.

They made their remarks at a programme titled “Validation Workshop on 'Factory Audit on Hazard Identification, Risk Assessment & Control” and a seminar on “LDC Graduation Strategies and Private Sector Preparedness” at a Dhaka city hotel on Thursday.

The Bangladesh Plastic Goods Manufacturers & Exporters Association (BPGMEA), in collaboration with the Business Promotion Council (BPC) under the Ministry of Commerce, organised the event.

Mahbubur Rahman, Secretary of the Ministry of Commerce, attended the event as chief guest.

Mrs Nahid Afroze, Joint Secretary, Ministry of Commerce and CEO of the Business Promotion Council (BPC), and Md Abdur Rahim Khan, Additional Secretary, Ministry of Commerce and Project Director of EC4J, were present as special guests.

The keynote paper for the validation workshop was presented by S. M. Saiful Islam, Lead Assessor, Imarat Designers & Consultants, while the keynote for the LDC seminar was delivered by Ms Ferdaus Ara Begum, CEO of Business Initiative Leading Development (BUILD).

Samin Ahmed, President of BPGMEA, delivered the welcome speech at the event.

Senior representatives and officials from BPGMEA, BPC, EC4J, and various member organisations participated in the workshop and seminar.

Speakers emphasised that workplace hazards and accidents not only endanger workers and their families but also negatively affect productivity and overall societal well-being.

The primary aim of safety audits in the plastic manufacturing and exporting industry is to raise awareness among employers, employees, and management in order to create and foster a culture of safety. This includes identifying hazards, preventing accidents and injuries, managing risks, ensuring compliance, and promoting continuous safety improvements.

The Ministry of Commerce, through the BPC, is financing initiatives to strengthen the plastic industry’s resilience, with BPGMEA playing a key partnership role in the process.​

 

[Saif]

Bangladesh must prepare strategically, say experts

As Bangladesh is scheduled to graduate from the least-developed country (LDC) status in 2026, businesses and trade experts on Thursday stressed the urgent need for strategic preparation to overcome the post-graduation challenges. With the impending loss of duty-free market access, GSP benefits, an

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Overcoming post-graduation challenges
Bangladesh must prepare strategically, say experts

FE REPORT
Published :
May 16, 2025 08:19
Updated :
May 16, 2025 08:19


As Bangladesh is scheduled to graduate from the least-developed country (LDC) status in 2026, businesses and trade experts on Thursday stressed the urgent need for strategic preparation to overcome the post-graduation challenges.

With the impending loss of duty-free market access, GSP benefits, and other trade incentives, they emphasised that Bangladesh must improve the quality of products, diversify exports, adopt modern technologies, and explore new markets to remain competitive in the global market.

They made their remarks at a validation workshop on "Factory Audit on Hazard Identification, Risk Assessment & Control" and a seminar on "LDC Graduation Strategies and Private Sector Preparedness" at a city hotel.

The Bangladesh Plastic Goods Manufacturers & Exporters Association (BPGMEA) in collaboration with the Business Promotion Council (BPC) of the Ministry of Commerce organised the event. Commerce Secretary Mahbubur Rahman attended as the chief guest.

Mrs. Nahid Afroze, joint secretary at the MoC and CEO of the BPC, and Md. Abdur Rahim Khan, additional secretary at the MoC and Project Director of EC4J, were present as the special guests.

The keynote paper for the validation workshop was presented by S. M. Saiful Islam, Lead Assessor at the Imarat Designers & Consultants, while the keynote for the LDC seminar was delivered by Dr Ferdaus Ara Begum, CEO of the Business Initiative Leading Development (BUILD).

In his welcome address, BPGMEA President Samin Ahmed expressed concern over Bangladesh's upcoming graduation.

"We are uncertain about what lies ahead of us after the LDC graduation. Therefore, we must be well-prepared to tackle the potential challenges," he said.

While delivering her presentation, Dr. Ferdaus Ara stressed the need for extending back-to-back L/C (letter of credit) facilities to all exporters, not just the 100 per cent export-oriented ones.

She pointed out that limited access to bonded warehouse facilities is a major barrier for non-RMG sectors.

She also noted that exporters prefer the Export Development Fund (EDF) to the new Facilitation Pre-Finance Fund (EFPF), as the EDF is disbursed in foreign currency.

To make EFPF more effective, she recommended raising its ceiling, lowering interest rates, and digitising the process.

Commerce Secretary Mahbubur Rahman said, "We should address the challenges associated with graduation from the LDC status. Having graduated in 2021, we are currently in the grace period, which offers a window of opportunity to prepare for a smooth transition."

To boost export growth, the government plans to engage in sector-wise discussions with the stakeholders from each industry, he said.

Regarding Free Trade Agreements (FTAs), Bangladesh must move forward with careful consideration and strategic thinking to ensure that Bangladesh gains mutual benefits, Mr Rahman suggested.

The global plastics market is even larger than the global apparel market. Therefore, the plastic sector must prioritise diversification to realise its full export potential, he added.

Speakers also emphasised that workplace hazards and accidents not only endanger workers and their families but also affect productivity and overall societal well-being.

The primary aim of safety audits in the plastic manufacturing and exporting industry is to raise awareness among employers, employees, and management to foster a culture of safety.

These include: identifying hazards, preventing accidents and injuries, managing risks, ensuring compliance, and promoting continuous safety improvements.

The MoC, through the BPC, is financing initiatives to strengthen the plastic industry's resilience, with BPGMEA playing a key partnership role in the process.

Senior representatives and officials from BPGMEA, BPC, EC4J, and various member organisations participated in the event.​

 

[Saif]

Bangladesh will graduate from LDC bracket on time: Finance Adviser

Finance Advisor Salehuddin Ahmed is positive that Bangladesh will graduate from the Least Developed Country (LDC) bracket as scheduled in 2026. Speaking at an event in Dhaka on Saturday, he said the matter has drawn a lot of attention lately, and insisted: “There's been a lot of discussion a

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Bangladesh will graduate from LDC bracket on time: Finance Adviser
Published :
May 17, 2025 17:37
Updated :
May 17, 2025 17:37

Finance Advisor Salehuddin Ahmed is positive that Bangladesh will graduate from the Least Developed Country (LDC) bracket as scheduled in 2026.

Speaking at an event in Dhaka on Saturday, he said the matter has drawn a lot of attention lately, and insisted: “There's been a lot of discussion about whether we should graduate or not. But we decided that [we will] and we will go for it.

“We will do everything to prepare for that.”

Bangladesh is set to graduate from the LDC bracket, designated by the UN Committee for Development Policy, on Nov 24, 2026. The chief advisor recently instructed all relevant agencies to take prompt and coordinated steps to move Bangladesh to the developing nations category.

Salehuddin called on the business community to step forward to facilitate the transition, reports bdnews24.com.

"We will go faster, not slowly, because other countries have come a long way. Let us not get stuck in one place."

Bangladesh has been on the UN list of LDCs since 1975 and met the eligibility criteria for graduation in 2018, based on three indicators: per capita income, human asset development, and economic vulnerability.

The UN General Assembly, during its 76th session on Nov 25, 2021, recommended Bangladesh's graduation.

As a least developed country, Bangladesh enjoys duty-free and quota-free access to the European export market. If it upgrades into a developing country, these perks will no longer be available.​

 

[Saif]

Must proceed with LDC graduation despite hurdles

Graduating from the least developed country (LDC) category will be a challenge for Bangladesh and there are many debates surrounding it, but the country has to graduate by 2026, Finance Adviser Salehuddin Ahmed said yesterday.

www.thedailystar.net

Must proceed with LDC graduation despite hurdles
Salehuddin says

Graduating from the least developed country (LDC) category will be a challenge for Bangladesh and there are many debates surrounding it, but the country has to graduate by 2026, Finance Adviser Salehuddin Ahmed said yesterday.

He added that businesses in Bangladesh will have to move faster to ensure the country does not fall behind, as other countries are progressing rapidly.

The adviser made the comments while speaking as the chief guest at the launch event of five new card services by Mercantile Bank, in association with Mastercard, in the capital.

"We are committed to encouraging digital transactions as much as possible, as they ensure greater transparency and traceability," Ahmed said.

He added that although digital adoption is growing, it is important to address the concerns people face, such as excessive questioning by banks, which often hinders broader participation.

Credit cards, in particular, play a crucial role in facilitating remittances and driving financial inclusion.

"I extend my best wishes to both Mercantile Bank and Mastercard for their continued efforts in advancing private sector development and promoting digital transformation in the financial ecosystem."

Mati Ul Hasan, managing director of Mercantile Bank PLC, stated that the initiative aligns with their broader goal of supporting Bangladesh's transition toward a cashless, digitally empowered society.​

 

[Saif]

Graduation from LDC by 2026 on track: Salehuddin

The finance adviser has said Bangladesh will graduate from the Least Developed Country (LDC) category to a developing country next year despite opposition. "We are trying to graduate as a developing country by 2026. There has been a lot of discussion about this-whether we should go for graduation

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Graduation from LDC by 2026 on track: Salehuddin
FE REPORT
Published :
May 18, 2025 09:19
Updated :
May 18, 2025 09:19

The finance adviser has said Bangladesh will graduate from the Least Developed Country (LDC) category to a developing country next year despite opposition.

"We are trying to graduate as a developing country by 2026. There has been a lot of discussion about this-whether we should go for graduation or not-but we have decided that we will go for it," Finance Adviser Dr. Salehuddin Ahmed said.

"Whatever preparations are needed, we will make them," he added.

He made the remarks while addressing as chief guest a ceremony to launch Mastercard portfolio of Mercantile Bank at a hotel in the capital on Saturday.

The finance adviser said he expected that the country's business community would actively participate in the graduation process.

Hailing Mercantile Bank and Mastercard for their collaboration, the Adviser said it would help expand the idea of cashless society in the country.

Though there are some challenges in the banking sector, situation is improving, said Mr Ahmed, who once headed the Bangladesh Bank (BB) as its governor.

BB Deputy Governor Zakir Hossain Chowdhury and Chairman of Mercantile Bank Anwarul Haque spoke on the occasion as special guests.

The bank's board of directors and senior officials of the bank and Mastercard were present on the occasion.

They unveiled new cards at the ceremony.

The portfolio includes Mastercard Titanium Credit Card, World Mastercard Credit Card, Mastercard Debit Card, Mastercard Platinum Global Debit Card, and a Mastercard Prepaid Card.

Equipped with contactless technology, dual-currency support, and robust two-factor authentication, these cards offer cardholders a seamless and secure payment experience for both domestic and international transactions.​

 

[Saif]

Graduation from LDC club to create some opportunities: BB Governor

Bangladesh Bank Governor Dr Ahsan H. Mansur said that graduation from the Least Developed Countries (LDC) would create some opportunities for Bangladesh, despite the businesses having some observations. He said there is no country like Bangladesh left among the LDCs. He made the remark on Tuesday

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Graduation from LDC club to create some opportunities: BB Governor
FE REPORT
Published :
May 21, 2025 10:11
Updated :
May 21, 2025 10:11

Bangladesh Bank Governor Dr Ahsan H. Mansur said that graduation from the Least Developed Countries (LDC) would create some opportunities for Bangladesh, despite the businesses having some observations.

He said there is no country like Bangladesh left among the LDCs.

He made the remark on Tuesday night at the inauguration ceremony of a new platform, the Climate Action and Sustainability Hub (CASH) in a hotel in the capital.

The initiative is a joint effort by the Policy Research Institute (PRI) of Bangladesh, the Centre for Climate Change and Environmental Research (C3ER) at BRAC University, and Sharp Consulting Bangladesh Limited, said organizers of the event.

While speaking as chief guest at the event, the governor said, “in Asia only Afghanistan remains; in Africa, there are countries like Congo and Somalia. So why should we still be on this list? I don't find it acceptable."

He added, "It is necessary for us to move beyond this classification. Despite objections from some in the business sector, I firmly believe LDC graduation will ultimately benefit Bangladesh."

AKM Sohel, Additional Secretary at the Economic Relations Division (ERD) said at the event, windows of soft loans and preferential market access of product will be closed or reduced.

The only sector where the global funds will remain open for grants or concessional loans is climate changes as Bangladesh is the largest climate disaster prone area. Dr Ainun Nishat, Chairman of CASH, said the flood that struck Florida last year reached a height of 17 feet.

"Our embankment stands at just 15 feet - and it's already damaged. Even a smaller flood could cause severe devastation," he said.

If a flood of similar magnitude hits Bangladesh, it could result in the death of at least 50,000 people, he said.

Dr Ainun Nishat criticized the Delta Plan 2100, calling it a deceptive initiative, and argued that it lacks concrete, project-specific details.

He claimed that the plan merely repackages over 80 development projects that were originally identified back in the decade of 1960s.

Dr Selim Raihan, Executive Director, SANEM said at the event capacity building and managing data are important issue for the macro economy particularity climate change issue.

Sayed Nasim Manzur, President of the Leathergoods and Footwear Manufacturers and Exporters Association of Bangladesh, emphasized the need for a unified and non-discriminatory enforcement of environmental regulations.

He also stressed that the enforcement mechanism should not be overly centralized, and local governments must be empowered to play a stronger role in this area.

The organiser said at the event the platform is expected to accelerate the country's transition to a low-carbon, climate-resilient economy.

With climate risks intensifying and growing demands for sustainability disclosures and ESG compliance, CASH is positioned to support organizations in aligning with international standards, accessing climate finance, and developing sustainability leadership.

Despite the presence of national policies, the country still faces major implementation challenges - a gap CASH seeks to close.

The hub envisions positioning Bangladesh as a regional leader in sustainability by empowering organizations and communities to adopt environmentally responsible and socially equitable practices.

Its mission focuses on promoting inclusive sustainability actions through cutting-edge research, policy innovation, capacity building, and advocacy.

Eminent climate expert Dr Ainun Nishat will serve as Chairman of CASH.

The Board of Trustees will include Dr Zaidi Sattar, Dr Bazlul Haque Khondker, Al Maruf Khan, Roufa Khanum, Kazi Imtiaz Hossain, and Zakir Ahmed Khan.

The focus area of the CASH will be policy advocacy, capacity development, Knowledge dissemination, public engagement, research, and green and climate finance solution.​

 

[Saif]

Govt spending in Bangladesh lowest among LDC graduating peers

Bangladesh’s public spending as a share of gross domestic product (GDP) is the lowest among nations on course to graduate from the least developed country (LDC) club.

www.thedailystar.net

Govt spending in Bangladesh lowest among LDC graduating peers

Bangladesh's public spending as a share of gross domestic product (GDP) is the lowest among nations on course to graduate from the least developed country (LDC) club.

Economists say that this low level of expenditure, both operational costs and development outlays, could weaken the foundations of the country's transition and leave the economy vulnerable on several fronts once it loses LDC status.

Following graduation, Bangladesh will no longer enjoy preferential trade access in many global markets and will face tighter terms when seeking foreign loans.

To minimise these shocks, analysts say the government must strengthen the economy through higher investment in key sectors.

They say Bangladesh must ramp up spending on education, healthcare, infrastructure, and social protection to create the conditions typical of a developing economy.

In 2025, the country's public expenditure stood at just 13 percent of GDP, below the 23.4 percent in Nepal, 18.4 percent in Laos, and 17.9 percent in Cambodia.

The International Monetary Fund (IMF) projects that Bangladesh will raise this figure only marginally to 14 percent in 2026.

Economist Mustafizur Rahman said low revenue collection has forced the government to curtail both its operating and development budgets.

"In developed countries, public spending usually accounts for 35 percent to 40 percent of GDP. In other South Asian nations, it is around 20 percent. But in Bangladesh, it has hovered around 12 percent historically," Rahman said, citing IMF data.

"If the government intends to spend more, it must either tolerate a higher budget deficit or increase revenue collection," added Rahman, a distinguished fellow at the local thin tank Centre for Policy Dialogue (CPD).

At present, revenue-to-GDP ratio of Bangladesh stands at just 7.3 percent -- lower than that of Nepal, Bhutan, and several other regional peers.

"So, the original sin is the low tax collection," Rahman said. "On top of that, not all revenue reaches the public coffers due to systemic leakages."

He mentioned that the government is reluctant to raise the budget deficit as it would increase the debt servicing burden. "Already, interest payments have overtaken education as the largest expenditure item in the national budget."

The United Nations General Assembly endorsed the graduation of several LDCs.

Bangladesh, Laos, and Nepal are scheduled to graduate in 2026. The Solomon Islands will follow in 2027, with Cambodia and Senegal set to graduate in 2029.

After the graduation, Bangladesh will need to become more competitive and productive to survive in a less preferential global environment, said Prof Mohammad Lutfor Rahman, an economics teacher at Jahangirnagar University.

"This calls for strong and large government investments," Rahman said.

According to him, if the government fails to invest adequately in health, education and infrastructure, the country's development may falter.

A CPD report shows that health allocations have remained below 1 percent of GDP for two decades, while education spending was slightly higher to 1.69 percent of GDP in fiscal year 2025.

"To improve outcomes in health and education, a country needs to spend at least 5 percent of GDP in each area. Bangladesh still falls far short of that benchmark," said the economics professor.

He also pointed out that budget implementation remains a persistent problem. "Even when allocations rise, actual spending falls short. Implementation efficiency is falling and leakages are worsening."

According to Ministry of Finance, the budget implementation rate dropped to 84 percent in fiscal year 2022–23, down from 91 percent a decade ago.

CPD Distinguished Fellow Rahman recommended increasing tax collection, plugging leakages, improving tax administration and accelerating digital reforms.

With stronger revenue streams, he said, the government could boost investment in human capital and infrastructure -- sectors that are critical for helping local businesses compete internationally.

Similarly, Prof Rahman advocated for greater spending in education, health and infrastructure, alongside better implementation and tighter control over financial leakages.​

 

[Saif]

Reforms urgent before graduation

Complicated work procedures at government offices that *&*&*&*&*&*& service delivery is a legacy hampering the country's growth since its birth. The call for revamping and streamlining it by all concerned is also not new. But the self-serving, archaic system is so deeply entrenched that it still lives on

thefinancialexpress.com.bd

Reforms urgent before graduation

Published :
Jun 17, 2025 00:05
Updated :
Jun 17, 2025 00:05

Complicated work procedures at government offices that *&*&*&*&*&*& service delivery is a legacy hampering the country's growth since its birth. The call for revamping and streamlining it by all concerned is also not new. But the self-serving, archaic system is so deeply entrenched that it still lives on. As a precondition for extending their development support, the UN bodies and various multilateral lending agencies have been recommending changes including reforms in this rigid civil service procedures. Now criticism against this anti-progress, anti-growth bureaucracy is being raised even by countries and overseas business houses who have been tested partners in Bangladesh's development initiatives since long. Notably, some South Korean business houses first took an active interest in the country's textiles sector when the Readymade garment was a fledgling industry in the 1980s. Naturally, like other development partners, they have a stake in Bangladesh economy's better performance so that overseas investors including their own companies might continue to show interest in doing business with Bangladesh.

In this connection, the South Korean ambassador to Bangladesh at a recent seminar styled 'Korea-Bangladesh Economic Cooperation' in Dhaka organized by the 'Foreign Investors' Chamber of Commerce and Industry' pinpointed some areas in the bureaucracy as well as policy that are acting as barriers to foreign direct investments (FDIs) in the country. For instance, the customs clearance procedure and visa rules for foreign investors were the areas that came under close scrutiny. In fact, it is a colonial notion that businesses whether local or foreign should experience the ordeal of a protracted approval procedure involving multiple desks and an inordinate amount of time before a cargo is cleared or a permission is issued. Those were not business-friendly times when such arcane rules and procedures were conceived and practiced. But despite all the calls for change and reforms, the systems thrives to the detriment of business at home as well as others who are willing to invest in Bangladesh. Though many local businesses might have resigned to comply with the existing order of things, why should one expect the same kind of allegiance from an overseas investor?

Given the long and tardy bureaucratic procedures to get any business deal done, the usual short-term visa for a stay of, say, 90 days, is definitely not a welcome approach to a prospective overseas investor. It was exactly such barriers to effective partnership with foreign businesses that figured prominently at the discussion event in question. Alongside the procedural aspects, some policies that successive governments adopted from time to time have often amounted to stymieing the economy's overall competitiveness with regional and international peers. The higher tariffs against imports, for instance, have proved to be disincentive for overseas businesses intending to invest in the country. So, it is no surprise that at 0.75 per cent, Bangladesh's FDI-to-GDP ratio is the lowest in the region with India's at 1.7 per cent, while Southeast Asia's Vietnam at an impressive 4.7 per cent. These are the areas that call for urgent addressing from the government. As expected, the Korean diplomat's observations on these existing bottlenecks that slow down the pace of service delivery and thereby impact Bangladesh's business competitiveness could not have come at a better time, particularly when the country's graduation from the LDC category is on the doorstep. Needless to say, once exemptions from various tariff and non-tariff barriers that Bangladesh have been enjoying so far as a member of the LDCs are gone with its graduation, adequate preparedness should be there to face the challenges of a highly competitive global marketplace.

To survive and prosper in such conditions, it is the quality of the products and efficiency of a business trying to sell those will count. Now with all such non-business-friendly bureaucratic hangovers from the past still functional, the question arises if the government is really serious about entering that aggressive phase of business post-graduation. In the circumstances, time in hand must be utilized most expeditiously to enact required reforms before the graduation train arrives.​

 

[Saif]

Wahiduddin stresses FTAs for successful LDC graduation

Planning Adviser Dr Wahiduddin Mahmud has highlighted the need for free-trade agreements (FTAs) among the member- countries of the Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC). Addressing a programme marking BIMSTEC's 28th founding anniversary in the cap

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BIMSTEC 28th founding anniversary
Wahiduddin stresses FTAs for successful LDC graduation

FE REPORT
Published :
Jun 18, 2025 08:28
Updated :
Jun 18, 2025 08:28

Planning Adviser Dr Wahiduddin Mahmud has highlighted the need for free-trade agreements (FTAs) among the member- countries of the Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC).

Addressing a programme marking BIMSTEC's 28th founding anniversary in the capital on Monday evening, he pointed out that Bangladesh needs FTAs with BIMSTEC members as well as other countries for a smooth transition to the post-least- developed-country (LDC) graduation period.

He also stressed seamless multimodal connectivity among BIMSTEC members, saying it is a pre-condition for trade and investment promotion, people-to-people contacts, and energy cooperation, which are facilitators for economic development.

"Bangladesh remains strongly committed to advancing regional economic integration as a lead country in the trade, investment and development sector, including the blue economy," he added.

Reaffirming Bangladesh's commitment to regional cooperation, he expressed confidence in BIMSTEC's potential to become a dynamic and result-oriented organisation that delivers tangible benefits to its people.

BIMSTEC was established on June 6, 1997, through the signing of the Bangkok Declaration.

Fisheries and Livestock Adviser Farida Akhter, secretaries and officials of the government of Bangladesh, ambassadors and high commissioners, heads of international organisations, members of the diplomatic corps, media personnel, representatives of think tanks, and members of the BIMSTEC Secretariat attended Monday's event.

Welcoming the guests, BIMSTEC Secretary General Indra Mani Pandey noted that BIMSTEC, since its inception, has made significant progress in forging regional cooperation in various sectors.

It has succeeded in creating the institutional framework that it needs to function as an efficient and effective regional organisation, he said.

Besides, it has its own charter and well-established core and sectoral mechanisms, including senior officials meetings, ministerial meetings, and summits, he said.

Reflecting on BIMSTEC's 28-year journey, Mr Pandey highlighted the significant outcomes of the 6th BIMSTEC Summit held in Bangkok in April this year.

He said at the summit, BIMSTEC leaders, apart from their comprehensive summit declaration, adopted BIMSTEC Bangkok Vision 2030, providing a roadmap for building a prosperous, resilient, and open BIMSTEC.

They proposed a number of steps to enhance regional cooperation under BIMSTEC, he also said.

In addition to signing and adopting the Agreement on Maritime Transport Cooperation, memoranda of understanding between BIMSTEC and its developmental partners, the Indian Ocean Rim Association, and the United Nations Office on Drugs and Crime were also inked.

As part of the anniversary celebration, BIMSTEC member states showcased the cultural "unity in diversity" of the Bay of Bengal region by presenting their dance performances, exhibiting artefacts and other unique and symbolic items, and the march past, with the representatives proudly carrying their national flags in a symbolic display of unity and solidarity among member states.

Since September 2014, the BIMSTEC Secretariat located in Dhaka has been committed to supporting the member states to implement the decisions made by the leaders.

At Monday's programme, the organisation's secretary general conveyed that the BIMSTEC Secretariat was immensely grateful to the government of Bangladesh for hosting the Secretariat and providing it with all the necessary support.

He said the BIMSTEC Secretariat was also grateful to the embassies and high commissions of the BIMSTEC member states in Dhaka for their continued cooperation, including the organisation of the reception.

The celebration reaffirmed in a unique way BIMSTEC's growing importance as a regional platform for the realisation of the goals of peace, prosperity, and development in the Bay of Bengal region.

It also reflected the commitment of the member states to the organisation's success.

BIMSTEC comprises seven countries of the Bay of Bengal region - Bangladesh, Bhutan, India, Myanmar, Nepal, Sri Lanka, and Thailand.

It pursues regional cooperation in seven broad sectors - agriculture and food security; connectivity; environment and climate change; people-to-people contact; science, technology and innovation; security; and trade, investment and development.

The cooperation also covers eight sub-sectors - blue economy, mountain economy, energy, disaster management, fisheries and livestock, poverty alleviation, health, and human resource development.​