Delaying LDC graduation: Preparedness matters

Bangladesh is approaching its scheduled graduation from Least Developed Country (LDC) status on November 24, 2026. In this context, the recent government move to seek a three-year deferral is an important step that deserves careful consideration. While graduation is a matter of national pride and a testament to our economic resilience, it should not overshadow the preparedness required to sustain it.

The stakes are exceptionally high for our export sector. Upon graduation, Bangladesh will lose the "Everything But Arms" (EBA) trade preferences in the European Union and other major markets, potentially resulting in a tariff hike of 9.0 to 12 per cent on our ready-made garments. In an era of global inflationary pressure and fluctuating foreign exchange reserves, such a price shock could severely undermine our competitiveness against rivals like Vietnam and India.

The proposed three-year extension should not be seen as a delay in progress but rather as a strategic grace period. Bangladesh must utilise this time to finalise critical Free Trade Agreements, strengthen the banking sector, and ensure that the pharmaceutical industry-currently benefiting from patent exemptions under LDC status-is adequately prepared for TRIPS compliance.

Graduation should be a milestone on the path towards becoming a developed nation, not a trigger for economic stagnation. Therefore, the government must focus on ensuring a smooth transition so that our industries can remain competitive even without preferential treatment.

Junaid Ahmad

Department of Accounting & Finance

North South University

junaid.ahmad.232@northsouth.edu