No pulling back on LDC graduation

The recent high-level meeting chaired by the Chief Adviser of the interim government has reaffirmed Bangladesh's commitment to graduate from the Least Developed Country (LDC) category in 2026. With this, any lingering uncertainty about deferring the transition has effectively been dispelled. As the meeting aptly observed, the country's journey towards graduation, the long awaited milestone, has already taken off, there is no turning back.    

While the milestone reflects remarkable progress achieved so far, it comes with significant challenges. Chief among them is the termination of trade preferences, which currently benefit the country due to its LDC status. Acknowledging this, the meeting highlighted the urgent need to build a strong institutional capacity for trade negotiations in the post-graduation landscape. To that end, it has been decided that a dedicated trade negotiation agency will be established immediately. The Chief Adviser has also made it plain that an experienced and competent individual will be appointed to head this new body.

LDC graduation, like many good things, comes with an opportunity cost-an economic trade-off, as economists would frame it. Graduation signifies more than just improved metrics on paper; it represents a belief by the international community that the graduating country has overcome structural weaknesses that once justified special and preferential support. Consequently, the privileges long enjoyed under the LDC category-such as concessional loans and preferential trade access-will gradually disappear. For decades, Bangladesh's economy has reaped substantial benefits from such supports, particularly under schemes like the Generalised System of Preferences (GSP). The rise of the country's apparel sector as a dominant player in global trading is attributed to such a preferential treatment. While global trends towards tariff reductions and regional agreements have already reduced some of these advantages, Bangladesh continues to be one of the largest beneficiaries of LDC-related trade preferences, especially from the EU. Culmination of preferences is thus the prime issue that worries the businesses. To address this, preparedness is paramount. The transition must be strategically managed to mitigate negative impacts and harness new opportunities. Economic resilience will depend on improving governance, boosting institutional efficiency, and embracing a forward-looking mindset. Dynamism in investment, job creation and productivity will also be essential to sustain post-graduation growth.

LDC graduation should not be viewed as an end in itself, but rather as the beginning of a new chapter. It marks a shift to a more competitive and self-reliant development path, where gains must be consolidated through consistent effort and reform. The emphasis must be on building a more productive and competitive economy-one that can thrive without special treatment and compete effectively in global market. The decision to move forward with LDC graduation is both bold and timely. While the road ahead is indeed complex, proactive measures-such as institutional strengthening and capacity building-will be key to navigating the post-graduation era. With vision, commitment, and strategic planning, the country can not only weather the transition but also emerge stronger and more resilient in the global economic landscape.