The United Nations Committee for Development Policy (CDP) has recommended a positive consideration of Bangladesh’s request to extend its graduation transition period from the Least Developed Country (LDC) category by three years. The CDP, an organ under the UN Economic and Social Council, reviews and recommends which countries are eligible to exit the LDC status.
Shortly after the BNP government took office, it submitted a request to the UN CDP on 18 February to extend the LDC graduation preparatory period by three years, effectively pushing the date to 24 November 2029. Subsequently, on 6 April, Prime Minister Tarique Rahman sent a letter to the UN secretary-general seeking his personal cooperation on the matter.
In response to the request to extend the transition period until 24 November 2029, the CDP has now conveyed its positive stance. The Ministry of Finance shared this information in a press release today, Tuesday.
The release stated that CDP Chairman Professor José Antonio Ocampo informed the Bangladesh government that, according to the committee’s assessment, it would be appropriate for the UN General Assembly to extend Bangladesh’s LDC graduation preparatory phase. However, during this time, Bangladesh must achieve significant progress in key domestic reforms to address existing structural weaknesses.
In its assessment, the CDP noted that Bangladesh has exceeded the set criteria in each of the three LDC graduation indices. The risk of Bangladesh slipping back from this position in the near to medium term is considered extremely low.
Nevertheless, recent Middle East crises, uncertainties in global energy and supply chains, shifts in the international trade environment, and other global challenges could impact the implementation of the country's graduation preparations.
To facilitate the exit from the LDC category, the Bangladesh government has a Smooth Transition Strategy (STS). According to UN regulations, the STS is a roadmap designed to stabilise the economy and address potential challenges during the transition from an LDC to a developing nation.
The press release further mentioned that the committee welcomed the government’s commitment to implementing this STS. The CDP believes that an extended preparatory phase will provide an opportunity to better assess the impact of the current global situation, determine necessary priorities, and make proper preparations for post-graduation market facilities and international support measures.
At the same time, the CDP emphasised the importance of continued cooperation from the international community for Bangladesh during both the preparatory phase and the post-graduation period. This includes concessional financing, appropriate extension of LDC-related international support measures, technical assistance, and capacity building for trade negotiations.
The CDP specifically highlighted the importance of domestic reforms, stressing the need to ensure financial sector stability, increase tax collection, strengthen domestic resource mobilisation, enhance productive capacity, diversify the economy, and prepare the private sector for graduation.
According to the committee, the extension of the preparatory period should by no means be viewed as an opportunity to delay reform activities; rather, it should serve as a catalyst to accelerate them.
The release added that the Bangladesh government has welcomed the CDP's positive assessment and recommendation. The government firmly believes that through the cooperation of the international community and ongoing reform efforts, Bangladesh will be able to ensure a sustainable, smooth, and successful LDC graduation.
Solomon Islands the Last Success Story
The Solomon Islands was the last country to successfully appeal for a delay in its LDC graduation. In 2023, its government requested additional time, citing civil war and natural disasters. Following an assessment, the CDP granted a three-year extension. Additionally, the LDC graduations of the Maldives (due to a tsunami) and Nepal (due to an earthquake) were not held within the originally scheduled timeframes.
What are the Graduation Stages?
A triennial review of LDC countries is conducted every three years. Whether a country is eligible to graduate to a developing nation is determined based on three indices: per capita income, human assets, as well as economic and environmental vulnerability. If a country meets the criteria in at least two of these indices, or if its per capita income is double the set threshold, the UN recommends its exit from the LDC category.
Bangladesh was included in the LDC list in 1975. By virtue of being an LDC, it has enjoyed various benefits, including duty-free facilities for product exports. In the 2018 and 2021 triennial reviews, Bangladesh met the criteria for all three indices, and in 2021, the final recommendation was made for Bangladesh to exit the LDC category in 2024. However, due to the COVID-19 pandemic, the preparation time was initially extended by two years. With this latest decision, the timeframe has been extended by a further three years.