Dhaka: Former lead economist of the World Bank Bangladesh Office, Dr. Zahid Hussain, has stated that Bangladesh cannot unilaterally defer its graduation from the Least Developed Countries (LDC) category. The United Nations Committee for Development Policy (UN-CDP) recommended Bangladesh’s graduation in 2021, a suggestion that, while not automatically enforcing graduation, is often seen as largely mandatory due to the UN General Assembly’s tendency to follow the CDP’s recommendations.
According to Bangladesh Sangbad Sangstha, Dr. Zahid shared his insights during an interview at his residence, emphasizing that Bangladesh has already availed a two-year extension in its LDC graduation timeline. He noted that countries facing setbacks during this process were often granted more time to address challenges. With Bangladesh’s graduation slated for 2026, Dr. Zahid highlighted the importance of addressing business community concerns to ensure a smooth transition.
Dr. Zahid underscored that Bangladesh’s LDC graduation is predicated on meeting all three criteria. As such, altering data to defer the graduation is not feasible. He stressed the need for Bangladesh to prepare for the post-graduation period by tackling any impacts on competitiveness. The World Trade Organization (WTO) and the European Union (EU) have extended LDC trade benefits to Bangladesh, providing a grace period up to 2029, with countries like Canada, the UK, and Australia offering similar continuations.
Discussing the potential “middle-income trap,” Dr. Zahid warned that without political stability and structural reforms, Bangladesh could remain stagnant. He identified export diversification, investment, and skill development as crucial areas for reform. The global economic landscape, influenced by US policies, presents opportunities for Bangladesh to attract multinational companies seeking alternatives to China.
Dr. Zahid also addressed Bangladesh’s readiness to attract foreign direct investment (FDI). He pointed out issues like visa complexities, economic zone readiness, and business regulation challenges. The government’s decision to focus on developing five well-equipped economic zones, instead of an ambitious plan for 100, was lauded as a strategic move to create a conducive “plug-and-play” environment for investors.
Highlighting business confidence issues, Dr. Zahid mentioned the financial sector’s state and inconsistent energy supply as major concerns. He also touched on the challenges of maintaining a sustainable LNG supply. Looking ahead, the new Monetary Policy Statement and the FY26 budget are expected to provide clarity on the country’s economic trajectory.
While acknowledging the government’s awareness of the need for economic reforms, Dr. Zahid pointed out that translating this into action remains challenging. Initiatives must originate from the administration and relevant ministries to be effective.