Dhaka, April 23, 2025 (PR) – A diverse coalition of national and international stakeholders, convened today by the Change Initiative think tank, strongly urged the Government of Bangladesh to submit a request for deferral of the country's graduation from the Least Developed Country (LDC) category, currently scheduled on 24 November 2026. The case of request should be prepared considering legitimacy of evidence submitted, weak institutions and potential exacerbation of poverty amid LDC graduation. The call emerged from a high-level roundtable, "Bangladesh's LDC Graduation: Between Readiness and Reality," held at the Sheraton Dhaka, citing significant economic headwinds amid recent political turmoil and potential severe negative impacts if graduate with insufficient preparedness.
Participants, including senior policymakers, diplomats, leading economists, development partners, prominent business figures, and political representatives, expressed consensus that while Bangladesh has met the eligibility criteria, the current global uncertainties and domestic economic vulnerabilities warrant a delay. Echoing concerns highlighted in recent UN CDP monitoring report about weakened private sector confidence, the dialogue underscored the need for an immediate deferral by a logical margin to allow adequate time for implementing a robust Smooth Transition Strategy (STS), securing vital trade agreements, and safeguarding national interests.
Estiaque Bari, Head of Research, Change Initiative in his keynote presentation underscored that Bangladesh’s upcoming LDC graduation is likely to impact 71.5% of its exports, with projected tariff hikes of 8.7% in the EU, 9.1% in the UK, and up to 15.8% in Japan for key sectors like footwear and garments. The country also stands to lose access to vital concessional finance and climate adaptation support from the Least Developed Countries Fund (LDCF). Without targeted structural reforms, diversified market strategies, and fiscal safeguards, the cost of transition may outweigh the developmental gains of graduation. He further asserted that “As Bangladesh prepares to graduate, with 81% of its exports dependent on the RMG sector and tariffs set to rise across key markets and product segments in the absence of critical trade agreements, the risks extend far beyond just the loss of trade and financial preferences. While LDC graduation is inevitable, requesting an extension could provide the much-needed time to prepare that has largely been wasted since the graduation decision was first made in 2018”
Adding a crucial political perspective, Amir Khasru Mahmud Chowdhury, Member, National Standing Committee, BNP, remarked: "Bangladesh stands at an inflection point, but the foundation of its development narrative is hollow—manipulated figures, collapsed financial institutions, and a dangerously narrow export base. LDC graduation cannot be built on broken systems... True transition demands... people’s representation in decision-making. Without democratic legitimacy, no milestone is meaningful.” Zonayed Saki, Chief Coordinator, Ganosamhati Andolan, aligned with the perspective, “Graduation is inevitable-but the real question is: is today the right time? LDC status is not a matter of ego, it’s a matter of readiness. In a global economy where labor and environmental standards shape trade, and political shifts like Trump-era policies intensify risks, Bangladesh must buy time for strategic leverage. Without reliable data, institutional reform, and a national dialogue, rushing this transition could threaten our economic survival.” Sadia Farzana Dina, Joint Chief Coordinator, National Citizens' Party, emphasized on transparency, “Regular data audit and clear transparency mechanism needs to be incorporated in the data management system.”- she stated.
"The consensus emerging from this critical dialogue is clear: proceeding with LDC graduation in 2026, under the current circumstances, poses unacceptable risks to Bangladesh's economic stability and development gains," stated M. Zakir Hossain Khan, Chief Executive of Change Initiative. “LDC graduation is neither a badge of prestige nor a policy formality-it is a deeply political and structural shift. Countries like Angola, Nepal, and Cambodia sought delays, and Myanmar declined altogether-not for lack of ambition, but due to the absence of reform readiness. Bangladesh, too, stands at a crossroads. Without transparent GDP data, institutional reform in banking, or meaningful tax-GDP progress, we risk mistaking eligibility for preparedness. Graduation without reform is not progress-it’s postponing accountability and undermining people’s survival risks. We must ask: are we truly ready, or simply eager to exit the LDC list before we have strengthened our foundations? At stake is not just trade preference, but the risk of losing of grant-based climate finance-an avoidable cost made worse by poor governance and institutional inertia.”
Professor Mushtaq Khan of SOAS, University of London, commented, “LDC status is not a formality-it’s a negotiated privilege tied to global protections. Bangladesh is on track to graduate, but without critical homework. We’re exiting while our banking system remains broken, our power sector contracts are riddled with corruption, and our export competitiveness is hollow beyond garments. Graduation will expose industries like leathers and food to unprotected tariffs, risking collapse in the face of Indian and Chinese competition. The EU’s safeguard thresholds and rising global militarization are shrinking development space, not expanding it. Free trade agreements take 7–8 years-we aren’t ready for that timeline. Investors don’t care about our LDC badge; they care about the real cost of doing business. We must not mistake eligibility for preparedness. Unless we rebuild institutions, renegotiate smartly, form a political strategy that includes our neighbors like Nepal and Bhutan, we risk walking into a trap dressed as success.”
Representing the international business community, Nuria Lopez, Chairperson, European Union Chamber of Commerce in Bangladesh, stressed the human cost and the imperative for government action: “Without an extension, 2.5 million unskilled workers risk being left behind as green industries rise. Bangladesh must set aside ego and prioritize workforce upskilling, productivity, and investment in R&D to ensure a just transition. My stand is obviously positive about graduating but now is not the time, so far.” It was also reminiscent in local businessman’s voices. As one of their representatives, Hafiz Firoz Choudhury , Principal Consultant, The M Group Inc. told that “In a time of global economic discontent, Bangladesh must anchor its transition in structural reforms—raising the tax-GDP ratio above 15%, export diversification, and reducing reliance on costly domestic borrowing. Aligning with SDGs and engaging strategically with ASEAN and neighbors like Myanmar isn’t optional—it’s essential to secure a sustainable and sovereign future.”
Concerns were strongly voiced from within key institutions. Dr. Omar Farooq, Additional Director Research, Monetary Policy Department, Bangladesh Bank, noted, "Critical questions remain about the impact assessment... especially given past reliance on potentially fabricated macroeconomic variables. With our financial sector still vulnerable and the economy facing headwinds, applying for a deferral of 2-3 years based on a realistic assessment seems necessary to ensure stability before undertaking this transition."
From a development partner perspective, Cynthia Mela, Country Director, Agence Française de Développement (AFD), observed: "My impression is one of an 'illusion of growth' in Bangladesh, not fully grounded in the reality of its people... Unlocking the country's potential requires a shared vision, a clear assessment of reality, and time to build the path forward – time that seems crucially needed now before graduation." Mr. Owais Parray, Country Economic Advisor, UNDP Bangladesh stated, ““Bangladesh doesn’t need just a graduation date—it needs a plan that avoids past mistakes, drives diversification, and delivers real jobs.”
The sentiment from civil society was captured by Ayub Bhuiyan, Secretary, National Press Club: "When thousands protest daily just to be heard, LDC graduation isn't a milestone—it’s a mirror. Without democracy, financial stability, and accountability, Bangladesh isn't ready to move forward—it’s struggling to stand still.” Mohammad Asaduzzaman, Co-founder, Dacca Institute of Research and Analytics emphasis on the issue, “Human capital development is weak, ease of doing business is poor, and production lacks diversification. With fragile institutions and vulnerable climate footing, Bangladesh needs structural reform and accurate data before it can move forward.” Dr. AKM Wasekul Karim said, “Bangladesh is staring down a debt burden that could reach six times its current budget by 2030- with 5% of our economy drained just to service interest.”
Acknowledging the official UN data showing criteria are met, Mr. AKM Sohel, Additional Secretary & Chief, UN Wing, ERD, Ministry of Finance, noted options exist: " “The data is clear—Bangladesh meets all three LDC graduation thrxesholds. But readiness isn’t just about hitting targets; it’s about building resilient systems. We are not saying we won’t graduate—we’re saying we need a cushion. We cannot unilaterally defer, but we can make a justified case for extension if backed by solid data on costs, competitiveness, and institutional gaps. Borrowing terms are already tightening, duty-free access is ending, and our window for strategic reform is closing. The choice is ours: act now with a plan or proceed unprepared.”” However, the overwhelming consensus among other participants was that proceeding unprepared posed too great a risk.
Abu Rushd, Editor-in-Chief, Bangladesh Defense Journal, expressed his concerns, “Amid economic and political insecurity, regional tensions, and global uncertainty, Bangladesh cannot afford to ignore its internal fractures. People have demanded fair elections for 17 years and received none—even under the name of democracy. Don’t offer symbols of success like a Rolls Royce when the foundation—people’s rights and dignity—remains neglected. The solution must be political, and it must come urgently.”
From CSOs and Business Community we also had speakers including Jamshed Al Zubaidi, Md. Abdul Alim, Aslam Beg Sayem, M. Maksud, SK Rubab, Mohammad Ali Bappy and Dr Waresul Karim.
