Business leaders in Bangladesh have urged the government to delay the country’s graduation from Least Developed Country (LDC) status by at least two to three years, citing persistent economic challenges, energy shortages, and a constrained financial environment.
The plea was made during a Focus Group Discussion on the “Implementation of the STS for Smooth Transition from LDC Status,” held at the Dhaka Chamber of Commerce & Industry (DCCI) auditorium on 10 March.
The event was jointly organised by the Support to Sustainable Graduation Project (SSGP), Economic Relations Division (ERD), and DCCI.
DCCI President Taskeen Ahmed underscored the pressing economic adversities, including high inflation, elevated import duties, soaring interest rates, and procedural hurdles in accessing bank credit.
Presenting a keynote paper, he revealed that GDP growth in the first quarter of the current fiscal year stood at merely 1.8%, while the manufacturing sector expanded by just 1.43%.
Against this backdrop, he argued that Bangladesh must stabilise its economy before transitioning from LDC status in 2026.
Ahmed emphasised the necessity of an effective and competitive Smooth Transition Strategy (STS), recommending the formulation of a comprehensive economic roadmap, real-time monitoring mechanisms, trade agreements with key partners, and better alignment of trade, industrial, and investment policies.
He also called for policy reforms to boost non-garment exports in promising sectors such as pharmaceuticals, leather, agro-processing, semiconductors, light engineering, and information technology.
ERD Secretary Md Shahriar Kader Siddiky, the chief guest, acknowledged the economic difficulties but highlighted improvements in the country’s current and financial accounts.
He announced the formation of a committee comprising trade organisation representatives to assess private-sector needs and devise solutions.
Additionally, he disclosed that South Korea had pledged to assist Bangladesh in implementing digitalisation across government services.
Commerce Secretary Mahbubur Rahman, speaking as the special guest, admitted that the LDC graduation process had suffered from inadequate planning and execution.
Stressing the importance of private-sector involvement, he urged businesses to diversify beyond readymade garments and explore new export avenues such as packaging.
SSGP Project Director AHM Jahangir warned that the private sector would bear the brunt of the challenges stemming from LDC graduation, underscoring the need for coordinated efforts from all stakeholders.
Dr Mostafa Abid Khan, Component Manager at SSGP, ERD, noted that 73% of Bangladesh’s total exports currently enjoy duty-free privileges, which will be lost post-LDC transition.
He identified export diversification, human capital development, and institutional capacity building as critical priorities.
Other prominent industry leaders echoed these concerns.
BKMEA President Mohammad Hatem highlighted declining economic indicators since 2022, an export data mismatch, and policy shortcomings that hinder competitiveness.
Rizwan Rahman, former DCCI president, stressed that until small and medium enterprises (SMEs) are delinked from cottage industries in policy frameworks, they will struggle to benefit from government support.
Manwar Hossain, chairman of Anwar Group of Industries, warned that infrastructure deficits and gas shortages in the steel and cement sectors were impeding production and economic stability.
Former BGMEA director, Asif Ashraf asserted that Bangladesh’s garment sector must enhance backward integration to qualify for the European Union’s GSP Plus benefits.
Md Mahbubur Rahman Patwary, Managing Director of Sonali Ash Industries Limited, called for government technical and financial support to strengthen the jute sector. Senior representatives from DCCI, including Senior Vice President Razeev H Chowdhury and Vice President Md Salem Sulaiman, alongside public and private sector stakeholders, attended the discussion.
The event underscored the private sector’s growing apprehension regarding Bangladesh’s preparedness for LDC graduation, reinforcing calls for pragmatic policy interventions to mitigate economic shocks and ensure a smooth transition.
