Urgent reforms needed as post-LDC export risks grow

Bangladesh's export competitiveness is coming under increasing pressure ahead of its graduation from the least- developed country (LDC) status due to uncertainty over post-graduation market access, tougher compliance requirements, and new free-trade agreements (FTAs) signed by competing exporting countries, according to the Research and Policy Integration for Development (RAPID).

Weak infrastructure, high production costs, inefficient logistics, and slow export diversification are further constraining export growth, it says.

With Bangladesh preparing for LDC graduation, the research organisation has called for an urgent and coordinated competitiveness reform programme.

The observations came in a keynote paper presented at a workshop titled "LDC Graduation and Trade Competitiveness" and held at the National Press Club in the capital on Monday.

The presentation was delivered by RAPID Chairman Dr Mohammad Abdur Razzaque.

Speaking as the chief guest, Information and Broadcasting Minister Zahir Uddin Swapon called for making the most of the possible three-year LDC graduation extension by strengthening export competitiveness, implementing policy reforms, and preparing for post-LDC challenges.

He also stressed that sustainable development would not be possible without economy-friendly politics.

"Politics must support the economy. Otherwise, discussions on these issues will remain merely theoretical," he said.

The minister said although Bangladesh had not yet formally graduated from the LDC category, effective preparations must begin immediately to address the challenges in the export sector.

Those challenges were expected to intensify after graduation, he added.

Swapon noted that the government had applied to the relevant United Nations committee in February this year to defer the graduation until November 2029.

The additional period, he said, should not be viewed as an opportunity for delay but as a window to complete the necessary preparations for a smooth transition.

"The government's policymakers and relevant officials are already working on the issue," he said, adding that if the extension was approved, it would facilitate policy reforms, boost export growth, remove administrative bottlenecks, and help the country better adapt to the post-LDC environment.

Presenting the keynote, Dr Razzaque said Bangladesh's export sector was entering a far more challenging global trading environment as competition intensified and preferential market access gradually eroded.

He noted that competitors such as India and Vietnam were expanding their network of free trade agreements, strengthening their position in key export destinations, including the European Union, while Bangladesh risked losing its traditional competitive edge after graduation.

He warned that the withdrawal of duty-free market access following graduation could expose Bangladeshi exports to higher tariffs, undermining their price competitiveness unless the country undertook comprehensive reforms.

At the same time, he observed that global trade was increasingly being shaped by environmental, climate, and labour-related standards, making compliance an essential requirement for sustaining market access.

According to Dr Razzaque, Bangladesh can no longer rely solely on low production costs.

Enhancing productivity, improving trade competitiveness, and meeting evolving sustainability and compliance requirements would be critical to maintaining export growth in the post-LDC era, he said.

Doulot Akter Mala, president of the Economic Reporters' Forum (ERF), attended the programme as the guest of honour.

She stressed the need for urgent strategic preparations ahead of graduation, saying the absence of a revised transition strategy, declining foreign direct investment (FDI), and weak competitiveness remained major concerns.

Mala also called for restoring business confidence through stable policies, reducing bureaucratic hurdles, strengthening research and development, and aligning budgetary commitments with the country's economic realities.

Dr M Abu Eusuf, executive director of RAPID, delivered the address of welcome.

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