[🇧🇩] LDC Graduation For Bangladesh

[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.​