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Leading business chambers and trade associations urged the government to seek a five- to six-year extension of the timeline for Bangladesh's LDC graduation, emphasising that additional time is crucial to cushioning the economy against the shocks to follow the withdrawal of preferential trade benefits and concessional financing.
At a joint press briefing held Sunday at InterContinental Dhaka, International Chamber of Commerce (ICC) Bangladesh President Mahbubur Rahman read out a statement stressing that while graduation from the least-developed country (LDC) category represents a significant national milestone, a hasty transition could undermine industrial competitiveness, destabilise the financial system, and expose vulnerable sectors, notably garment and pharmaceutical, to new steep costs.
The briefing was organised by the ICC Bangladesh in association with the major chambers of the country.
The business community argues that securing an extension would provide Bangladesh with the necessary space to finalise critical trade agreements with the European Union (EU), the UK, the Association of Southeast Asian Nations (ASEAN), and Gulf countries to offset tariff shocks, diversify exports beyond garments, attract quality foreign investment, and upgrade energy and logistics infrastructure.
"It would also create scope for strengthening governance, addressing financial fragility, and building resilience to climate risks," the statement reads.
Rahman underscores that graduation is inevitable, but its successful management would determine the country's long-term trajectory of advances.
"Graduation is certain. Success is not guaranteed. It depends on how urgently and collectively we act," he told the media.
Bangladesh is scheduled to graduate from the world's poor-country club on November 24, 2026, on having met the three graduation criteria - Gross National Income (GNI) per capita, Human Assets Index (HAI), and Economic and Environmental Vulnerability Index (EVI) - for two consecutive triennial reviews since 2018.
The major chambers include the Federation of Bangladesh Chambers of Commerce and Industry (FBCCI), Dhaka Chamber of Commerce and Industry (DCCI), Metropolitan Chamber of Commerce and Industry (MCCI), Chittagong Chamber of Commerce and Industry (CCCI), Foreign Investors' Chamber Of Commerce & Industry (FICCI), Bangladesh Chamber of Industries (BCI), Bangladesh Association of Banks (BAB), Bangladesh Garment Manufacturers and Exporters Association (BGMEA), Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA), Bangladesh Textile Mills Association (BTMA), Bangladesh Association of Publicly Listed Companies (BAPLC), Bangladesh Insurance Association (BIA), Bangladesh Semiconductor Industry Association (BSIA), and Leathergoods and Footwear Manufacturers and Exporters Association of Bangladesh (LFMEAB).
The way forward: To transform graduation into an opportunity rather than a setback, business leaders urge the government to move from planning to immediate execution.
They proposed a roadmap to prepare for the transition, recommending a strategy rooted in smart trade diplomacy to defend market access, alongside reforms in the financial sector, including tighter oversight and the creation of a dedicated asset-management company for toxic loans.
Investment in technology, skills development, and infrastructure is described as essential to raise overall competitiveness.
Energy security is highlighted as a key priority, and the business leaders called for a diversified and reliable energy mix combining exploration, renewables, and regional power trade to ease persistent shortages and rising costs.
The modernisation of ports, customs, and transport networks is identified as critical to reducing logistics costs, which remain considerably higher than international standards.
In addition, stabilising the exchange rate, managing debt prudently, and restoring investor confidence have been cited as prerequisites for a smooth transition.
Risks on the horizons: The joint statement forewarns that without an extension, Bangladesh could face tariffs of up to 12 per cent in key markets, such as the EU and the UK, potentially leading to an export decline of 6 to 14 per cent, unless the Generalised Scheme of Preferences (GSP) or free- trade agreements were secured.
The loss of the World Trade Organisation (WTO) special provisions would also bring tighter patent enforcement under Trade-Related Aspects of Intellectual Property Rights (TRIPS), exposing the pharmaceutical industry to steep price rises.
For instance, the price of cancer medicine Imatinib, currently available domestically at $30-40 a month, could rise to $2,000-3,000, while that of HIV anti-retrovirals may increase from $100-150 to over $10,000 annually - posing a severe threat to public health as well as export competitiveness.
The readymade garment sector, which contributes more than 80 per cent of Bangladesh's export earnings, is likely to be hit by stricter rules of origin, higher compliance costs, and the loss of duty-free market access.
Business leaders have stressed that reducing overdependence on garments has become an urgent necessity.
Wider economic pressures: The appeal for an extension came against the backdrop of mounting economic pressures.
External debt has climbed to $103 billion, or Tk 12.6 trillion, while non-performing loans have surged to Tk 7,560 billion, severely constraining credit flows and undermining investor confidence.
Net foreign direct investment fell to $1.27 billion in 2024, a 13 per cent decline from the previous year, in stark contrast to Vietnam, which attracted more than $38 billion.
Frequent power and gas shortages, logistics bottlenecks, and a sharp depreciation of the taka - down about 45 per cent since 2021 - have further compounded the challenges facing businesses.
Linking these strains to the instability that followed the July 2024 uprising, Rahman said a delayed graduation would allow the country a breathing space needed to stabilise the economy and pursue reforms.
Learning from others: The ICC Bangladesh president drew lessons from international experiences. Botswana, he said, successfully leveraged good governance and sound resource management to ensure a smooth graduation, while the Maldives and Vanuatu struggled owing to overdependence on single sectors and climate vulnerabilities.
Nepal, due to graduate in 2026 alongside Bangladesh, has already taken steps to secure free-trade agreements and preferential access in its key markets.
Several LDCs, including the Maldives, Vanuatu, and the Solomon Islands, had sought and secured delays in their graduation process, sometimes by years or even decades, in order to strengthen readiness.
Against this backdrop, Bangladeshi business leaders argued that a five- to six-year extension would not be exceptional but rather a prudent and strategic decision to safeguard the country's long-term competitiveness.
"Bangladesh can still emerge as a strong middle-income economy by 2031 if graduation is managed properly," Rahman concludes, adding that the central question for the nation was not whether it graduated, but how it did so.
Citing the current economic realities, the ICC Bangladesh president listed external debt stress, financial strain, declining foreign direct investment (FDI), global trade tensions, climate pressures, persistent energy shortages, logistics bottlenecks, currency devaluation, and the economic aftershocks of the July 2024 uprising as urgent challenges that must be addressed.
In response to questions, Rahman said a signed joint statement with recommendations would soon be submitted to the government.
He emphasised that while the garments industry remained the largest stakeholder in the graduation process, efforts were underway to diversify exportable items to withstand LDC graduation-related shocks.
Besides, he noted that the business community was engaging with the government at various levels on this issue.
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