Reforms urgent for post-LDC economy

Bangladesh's economy is currently awaiting a graduation from the least developed country (LDC) in 2026, which brings both new opportunities and serious challenges. On the one side of the coin, the milestone reflects the decades of progress this economy has made in terms of structure and sustained growth; on the other, it takes away some of its previously enjoyed benefits along with the expectation to compete on an equal footing.

It means the gradual loss of numerous international trade privileges, loans and technical support that was reserved for LDCs. According to the WTO, Bangladesh's primary export earning sector the ready-made garments (RMG) industry will suffer the loss of duty-free and quota-free access to major destinations like EU and Canada. Without reforms --- ones that can give the economy a competitive edge, it can lose up to 14 per cent of export earnings. It is clear that the heavy reliance on a single export sector, limited product diversification and infrastructure bottleneck remain significant concerns regarding post-graduation growth.

In order to mitigate these challenges, Bangladesh needs to strategically plan ahead. Immediate priorities of the country should be to secure preferential trade agreements (PTAs) and stretching the transition period for LDC benefits through negotiations with the World Trade Organisation and key trading partners. Simultaneously, the dependence on RMG should be reduced and made pervasive throughout other sectors such as information technology, pharmaceuticals and agro processing.

Bangladesh's future progress comes with the requirement of building skills and improving institutions. More fund should be allocated for expert training in technical fields, digital training and better infrastructure to keep up with global technological changes. Stronger governance, integrity in public institutions and care for the environment will help attract better foreign investment and keep the economy stable. Due to the graduation, Bangladesh will have access to fewer low interest rate loans making tax collection and wise usage of borrowed money necessary. These should be used to fund projects that can bring long term economic benefits. Alongside trade policy, human capital development is a major factor that will determine the country's growth momentum.

Ultimately, Bangladesh's LDC graduation acts like a reward paradox. It is a celebration of decades of policy success and resilience, with the beginning of a tougher tomorrow where innovation, transparent governance and competitiveness must drive progress.

Nushaira Amin Ipshita

BBA Department

North South University