Staff Correspondent
Bangladesh will face four kinds of challenges after graduation from the least-developed country (LDC) list by 2026.
The challenges include loss of duty-free export markets, reciprocity in dealings with external business partners, obligation-driven policy space and stringent enforcement of compliance requirements in the domestic markets.
Discussion on the challenges and the way out strategies was held on Thursday during a virtual dialogue orgaised by the non-government research organisation Centre for Policy Dialogue (CPD).
CPD’s distinguished fellow Mustafizur Rahman presented the keynote titled 'Moving out from the LDC group: Strategies for graduation with momentum'.
Mustafizur said after the graduation, Bangladesh’s exports would need to pay 15 per cent tariff to access the Canadian markets. Currently Vietnam, a key competitor of Bangladesh in apparels sector, is paying the same tariff. The obligation would make Vietnam competitive to Bangladesh.
Moreover, Bangladesh would lose the preferential market access offered by the developed countries.
Currently, there is flexible policy space for subsidising domestic markets. It would be opposed by the developed countries after Bangladesh’s graduation to non-LDC group. Besides, Bangladesh would need to enforce compliance requirements as a developing country.
Mustafizur continued, “We have to suffer if we remain unprepared at the beginning of 2026. We need to get prepared for the upcoming challenges.”
The dialogue was chaired by CPD chairman and renowned economist professor Rehman Sobhan. He said, “Bangladesh’s LDC graduation would seem as a numerical change unless the transition correlates to practical facts.” For example, he said, Bangladesh’s exports will need to be more capable of dealing with competitive international markets.
Citing certain instances of unpreparedness, he said the relocation of pharmaceutical industries to the Active Pharmaceutical Ingredients (API) industrial park started in 2008 but the process was not completed yet.
“After the LDC graduation, price of medicines might increase in the domestic market,” Rehman warned.
On 26 February night, the United Nations’ Committee for Development Policy recommended for Bangladesh’s graduation from LDC to non-LDC developing one in 2026.
Besides many challenges, the graduation would open up new opportunities for Bangladesh, said Md Shahriar Alam, state minister for the foreign affairs ministry.
He expressed his hope that the new tag would brighten the image of Bangladesh. “Bangladesh would access loans at higher credit ratings. In consequences, we could easily join the regional and sub-regional commercial alliances.”
He said that completion of the Padma Bridge project within the transition period would increase Bangladesh’s competency in the international business.
Bangladesh Garment Manufacturers and Exporters Association president Rubana Huq stressed for public-private collaboration in strategy formulation for Bangladesh’s consistent competency after the LDC graduation.
Discussing on the potential challenges in finance, multinational Standard Chartered Bank’s chief executive officer Naser Ezaz said Bangladesh would lose funds from the Green Climate Fund. Besides, foreign grants would turn expensive because of the higher interest rate.
Naser suggested for collecting investment money from the capital market.
Lawmaker Kazi Nabil Ahmed, former president of Bangladesh Textile Mills Association A Matin Chowdhury, International Labour Organization’s Bangladesh representative Tuomo Poutiainen, among others, participated in the dialogue.
CPD executive director Fahmida Khatun moderated the dialogue.
*This report appeared in Prothom Alo print edition, has been rewritten in English by Sadiqur Rahman