After a lot of discussions for the delay, Bangladesh is now getting ready in full swing to graduate from the Least Developed Country (LDC) category to a developing nation in November 2026.
In a meeting on Tuesday with the experts on the LDC graduation, Chief Adviser Professor Muhammad Yunus directed the officials concerned to take all necessary preparations and precautionary measures in order to face challenges after the graduation.
A government official from the meeting said that the preparations taken until today for the LDC graduation were reviewed and found satisfactory. At the moment, he said, the government is taking steps to mobilise domestic resources to encounter possible repercussions mainly in our export sector after the graduation.
Moreover, Chief Adviser's Special Assistant Anisuzzaman Chowdhury disclosed that as part of the preparations the interim government will constitute a dedicated powerful trade negotiating body to address trade related challenges with a senior government official as its chair.
Earlier after the fall of the previous government, the interim administration initially wanted to delay the LDC graduation and was working on it saying that Bangladesh is going to step into the developing country's status based on false and fabricated information and narratives of our economic development.
For instance, Bangladesh's reliance on foreign countries has been increasing since 2010, local sources of income have declined significantly and the tax-GDP ratio has gone down to less than 7 per cent. All these economic indicators are not conducive to the LDC graduation.
Most unfortunately, Bangladesh has abjectly failed to diversify its exports in the lead up to its graduation to a developing state as the county heavily relied on ready-made garment exports for earning foreign currency with RMG sector contributing over 85% to our total exports.
And this issue was brought to the table for discussion in Tuesday's meeting and experts expressed their views on it saying that our RMG sector would not face that much turbulence as Bangladesh will continue to enjoy pre-graduation facilities from different countries.
What are major challenges Bangladesh could face after the LDC graduation. The first and foremost one is the loss of preferential market access. At present, Bangladesh enjoys this market access for its exports, mainly for the ready-made garments in a number of international markets. And after the graduation, these export facilities will be lost and Bangladesh's exports will likely to plunge to a minimum level.
Another challenge is stiff competition to be faced by the Bangladesh's products in the international markets from other developing countries and advanced economies. And in this case, Bangladesh will need to adapt to more stringent WTO rules and regulations, including reforms in trade-related areas, investment policies, and intellectual property rights.
What is more important is that Bangladesh will need to address its banking sector's burden of non-performing loans (NPLs) which reached Tk 2.85 trillion as of September 2024, accounting for approximately 17% of total distributed loans. Recovering stashed assets and tackling corruption will also be crucial for Bangladesh after the graduation.
