Bangladesh seeks 3-year deferral of LDC graduation
Business Desk :
The government has formally requested a three-year deferral of Bangladesh’s graduation from the Least Developed Country (LDC) category.
According to officials at the Economic Relations Division (ERD), a letter signed by Economic Relations Division (ERD) Secretary Md Shahriar Kader Siddiky was sent on 18 February to Jose Antonio Ocampo, chair of the United Nations Committee for Development Policy (CDP).
The committee is scheduled to meet from 24 to 28 February to review Bangladesh’s request along with related matters.
The secretary said Bangladesh remains deeply appreciative of the recognition of its development progress and of the extended preparatory period of five years granted to facilitate recovery from the unprecedented impacts of the Covid-19 pandemic.
Since the CDP recommended Bangladesh’s graduation, the government of Bangladesh has remained firmly committed to ensuring a smooth, sustainable and irreversible graduation, he added, mentioning various efforts to that end.
Notwithstanding these efforts, the global and national contexts in which Bangladesh has been preparing for graduation have been exceptionally challenging, the letter noted.
“While the country continues to comfortably meet all three graduation criteria – Gross National Income per capita, Human Assets Index and Economic Vulnerability Index – the preparatory period has been severely disrupted by a succession of overlapping external and domestic shocks.”
These include the prolonged aftereffects of the Covid-19 pandemic and a sluggish economic recovery; the Russia-Ukraine war and its spillover effects on global energy and food markets; tightening global financial conditions; and delays in the recovery of international trade, according to the letter.
It also mentioned disruptions caused by conflicts in the Middle East and the Red Sea; heightened uncertainty in the global trade regime; irregularities within the domestic financial sector; the July 2024 uprising that led to a change in government; and the unresolved repatriation of Forcibly Displaced Myanmar Nationals (FDMNs), which has required significant allocations from the national budget, as contributing factors.
All these shocks have caused macroeconomic instability, a decline in GDP growth, elevated inflation, and declining trends in private and public investment and the tax-GDP ratio, the letter said.
The five-year preparatory period, intended to provide space for structured preparation for graduation, has instead been dominated by crisis management, economic stabilisation and a struggle for survival, the letter read.
ERD officials said that last year, at Bangladesh’s request, the United Nations conducted an assessment outlining the country’s economic challenges but did not issue specific recommendations. Instead, the graduation process was described as “challenging” for Bangladesh.
The final decision will be adopted by the United Nations General Assembly, and the full recommendation and approval process could extend until September or October, officials said.
They noted that the formal review process has now begun, and subsequent decisions will depend on the ongoing evaluation.
