Businesses less prepared as LDC graduation clock ticks
The clock is ticking toward November 2026, when Bangladesh will formally step out of the Least Developed Country after eight years of assessments and repeated reviews by the UN committee for Development Policy. However business leaders now say they are still not adequately prepared to face the harsh reality of a post-LDC world.
Although the moment should have been a milestone of confidence, signaling that the country is ready to compete on fairer terms in the global market, the mood within the country’s key export industries, especially among leaders of the ready-made garment. Textile and pharmaceutical sectors, tell a different story.
Business leaders and bankers at a roundtable, organised by International Chamber of Commerce-Bangladesh (ICCB) in the capital on Tuesday said Bangladesh is not fully prepared to face the economic and institutional challenges that will follow its graduation from the LDC category, warning that it could expose the economy to serious risks.
They urged the next government to take up the issue with urgency, as understanding and addressing the realities of LDC graduation would take time. They warned that even a two- or three-year extension would be meaningless without concrete action. We already had eight years to prepare. There were many meetings and seminars, but little real progress.
However, the interim government has repeatedly said it will stick to the November 2026 graduation deadline. But in the face of widespread opposition, it invited the United Nations Committee for Development Policy (UNCDP) to assess conditions on the ground in November last year exchanging views with business leaders, policymakers and economists. A second round-up is also scheduled for this month (February).
It is to be noted that last year, apparel exports reached $39 billion, making Bangladesh the second-largest garment exporter after China with close to 8 percent of the global market.
The risk, according to economists, is concentration. Unlike many countries that have graduated, Bangladesh is heavily reliant on a single export sector and a limited number of markets, leaving it more exposed to any sudden loss of trade privileges.
The hard truth is that in the past few years since graduation was confirmed, Bangladesh has made little tangible progress in addressing the structural reforms required for a smooth transition.
It now needs to be decided, by both policymakers and the business community, whether the country should actively pursue a deferral of LDC graduation. There is precedent for such extensions, as some LDCs in the past have sought and secured more time. There is nothing wrong in seeking for this breathing space.