Dhaka: Leaders of top businesses today emphasized the need for extending the transition period for Bangladesh's graduation from the Least Developed Country (LDC) category. They expressed concerns that the nation is not yet prepared to transition from its LDC status and advocated for a three-to-six-year extension to better prepare for global market competition post-graduation.
According to Bangladesh Sangbad Sangstha, this demand was made during a seminar titled "LDC Graduation: Some Options for Bangladesh," organized by the International Chamber of Commerce Bangladesh (ICC-B) in collaboration with the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) and the Bangladesh Association of Pharmaceutical Industries (BAPI).
During the seminar, ICC-B President Mahbubur Rahman highlighted that Bangladesh is on track to graduate in November 2026, having satisfied the United Nations' three criteria for LDC graduation: Gross National Income (GNI), Human Assets Index, and Economic Vulnerability Index, over two consecutive reviews. He noted that while this achievement marks significant economic growth, poverty reduction, and industrial progress over five decades, it also presents complex challenges for the future.
Rahman urged the government to secure better trade deals, including Free Trade Agreements (FTAs) with the European Union (EU), the United Kingdom (UK), and major Asian economies, to ensure continued market access and mitigate tariff shocks. He also recommended diversifying the economy beyond the garment sector by developing industries such as pharmaceuticals, IT services, agro-processing, leather, and light engineering. Additionally, he stressed the importance of building human capital for the fourth industrial revolution by training a workforce skilled in automation, Artificial Intelligence, and advanced manufacturing, alongside strengthening institutions through transparent governance.
Sanya Reid Smith, a legal advisor and senior researcher at the Third World Network (TWN), presented a keynote paper highlighting that LDC graduation will lead to the loss of duty-free access to key markets, with potential tariff increases up to 12%, which could reduce exports by 6-14% unless arrangements like GSP+ are secured.
Participants at the seminar expressed concerns about the impact on various sectors, particularly pharmaceuticals, which currently fulfills 98% of domestic demand and exports to over 150 destinations. The graduation would mean losing the waiver from compliance with the WTO agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS), necessitating adherence to patent laws, thereby increasing costs and requiring significant investment in R and D and advanced technology.
Several prominent figures, including Abdul Muktadir, President of BAPI; Mahmud Hasan Khan, President of BGMEA; Syed Nasim Manzur, President of the Leather goods and Footwear Manufacturers and Exporters Association of Bangladesh (LFMEAB); Taskeen Ahmed, President of the Dhaka Chamber of Commerce and Industry (DCCI); and others, also spoke at the event, echoing the sentiment for an extended transition period.
A. K. Azad, Vice President of ICC Bangladesh and Managing Director of Ha-Meem Group, in his closing remarks, emphasized that it is not the right time for Bangladesh to graduate from LDC status. He cautioned against decisions that could strain the economy or harm exports, noting that the economy has yet to recover fully, with defaulted loans standing at Tk 5.30 lakh crore and rising. He also highlighted that around 1,200 factories have applied for loan rescheduling, and tariffs are expected to increase in key markets like Europe, Canada, and Japan.
Syed Nasim Manzur called on the government to take proactive steps to postpone LDC graduation by three to six years to ensure a smoother transition.