Bangladesh has long been preparing and planning to graduate from least developed country (LDC) status. However, due to recent global economic instability, export challenges, and budgetary pressures, the government has formally requested the United Nations to postpone the graduation timeline by three years.
How effective this initiative will be and whether Bangladesh’s request will be accepted internationally has created heightened anticipation and uncertainty.
Mahmud Hasan Khan Babu, president of the Bangladesh Garment Manufacturers and Exporters Association, said the government’s initiative is timely and necessary. However, diplomatic efforts must be strengthened to make the application effective. The Ministry of Foreign Affairs, Ministry of Commerce, and relevant departments must work actively so that no country raises objections to the proposal.
Before graduating from LDC status, Bangladesh’s export sector is facing new challenges.
According to business leaders, to address the risk of losing tariff benefits, trade diplomacy must now be brought to the center of the country’s economic strategy.
Former BGMEA director and additional managing director of Denim Expert Limited, Mohiuddin Rubel, said that without coordination between diplomatic and trade policies, it will be difficult to fully enjoy the benefits of LDC graduation. Diplomatic efforts must be further strengthened to retain market access in major markets such as the European Union, United States, United Kingdom, and Canada.
At the same time, targeted plans are essential to diversify markets into Latin America, Africa, the Middle East, and emerging Asian economies.
Such initiatives could be effective in ensuring the self-reliance and long-term growth of Bangladesh’s export sector. Bangladesh’s request has not yet reached the stage of final approval.
However, Dr. Debapriya Bhattacharya, distinguished fellow of the Centre for Policy Dialogue, believes that the country has already pressed the “crisis button.”
A five-day meeting of the United Nations Committee for Development Policy will be held in New York starting Monday, February 24. Bangladesh’s application will be evaluated at this meeting.
Debapriya Bhattacharya will participate in the meeting as head of the EMM subcommittee and a member of the CDP.
At the subcommittee meeting this week, the current situation of countries that have already graduated and those in the pipeline will be reviewed. In Bangladesh’s case, the new challenge is the request to delay graduation.
However, the request was not sent from the highest level of government, but by a secretary.
Debapriya Bhattacharya said that under the conventional framework, Bangladesh will be assessed by comparing recent data with the previous graduation assessment report.
Framework
In particular, the government’s report submitted last November will be compared with the new request.
In addition, Bangladesh’s sincerity in implementing the graduation strategy will be reviewed. Preparation and requirements LDC countries are evaluated every three years.
The three main indicators are per capita income, human assets index, and economic and environmental vulnerability index.
A country must pass at least two of these three indicators or have per capita income twice the threshold level.
Bangladesh passed all three indicators in the 2018 and 2021 assessments.
As a result, graduation from LDC status was confirmed for 2024. However, due to the impact of Covid-19 and global instability, graduation was postponed by two years.
According to the Economic Relations Division, a letter signed by ERD Secretary Md Shahriar Kader Siddiky was sent to the CDP on February 18.
The letter stated that although there was a plan to effectively use the preparatory period to address post-COVID challenges, multiple global shocks disrupted that objective.
The Russia-Ukraine war, rising energy and food prices, disruptions in global supply chains, and uncertainty in international trade have put pressure on Bangladesh’s economy.
Domestically, declining investment, slow revenue growth, and reduced GDP growth prevented proper implementation of structural reforms.
Next steps The Bangladesh government has formally requested to conduct a crisis assessment and extend the timeline by three years.
According to ERD officials, an initial assessment report may be prepared within about two weeks after the February meeting.
The CDP will then provide observations and recommendations.
The final recommendation will be sent to the United Nations General Assembly, where the decision will be made.
The entire process may take until September or October.
Last year, the United Nations conducted an assessment at Bangladesh’s request. Although the country’s economic challenges were highlighted, no specific recommendation was made; rather, the process was described as challenging for Bangladesh.
This time, the process has formally begun, and the next decision will depend on the outcome of the ongoing assessment.
Extension a good thing?
The market and business community believe that if additional time is granted considering global and domestic economic realities, the export sector, especially the ready-made garment industry, will be able to prepare more strongly for post-LDC competition.
According to ERD officials, an initial assessment report may be prepared within about two weeks after the February meeting.
The CDP will then provide observations and recommendations.
Based on the final recommendation, the matter will go to the United Nations General Assembly, where the final decision on LDC graduation will be made.
The entire process may take until September or October. Sources also said that last year the United Nations conducted an assessment at Bangladesh’s request.
At that time, the country’s economic challenges were highlighted, but no specific recommendation was provided; rather, the LDC graduation process was described as challenging for Bangladesh.
Officials said the process has now formally begun, and the next decision will depend on the outcome of the ongoing assessment.
