Bangladesh’s preparations for LDC graduation weak: UN report

Bangladesh has shortcomings in its preparations for graduating from the list of Least Developed Countries (LDCs). In the context of current macroeconomic instability and weak performance, discussions are increasingly focused on pre-graduation risks.

A meeting on LDC graduation was at the NEC conference room in Sher-e-Bangla Nagar in the capital held today, Sunday. Finance Minister Amir Khosru Mahmud Chowdhury chaired the event.

At the meeting, the UN-OHRLLS (United Nations Office of the High Representative for the Least Developed Countries, Landlocked Developing Countries and Small Island Developing States) presented a review report on Bangladesh’s preparedness, highlighting gaps in preparation.

At the meeting, Mohammad Abdur Razzaque, chairman of the private organisation RAPID (Research and Policy Integration for Development), presented various aspects of the UN report.

The report identifies several shortcomings and risks in Bangladesh’s preparation for LDC graduation. For instance, difficult political transitions and prolonged economic crises are eroding the country’s socio-economic achievements, putting its graduation at risk. There is also inadequate preparation to address potential trade losses after graduation. Moreover, given the current macroeconomic instability and weak performance, discussions are largely centred on pre-graduation risks.

The report further notes that, in reality, financial preparedness to tackle the challenges of LDC graduation remains weak. Implementation of the Smooth Transition Strategy (STS) is also limited.

According to the UN report, a request has been made to defer the graduation timeline by three years due to insufficient preparedness.

Speaking after the meeting, Finance and Planning Minister Amir Khosru Mahmud Chowdhury said that, in the current context, Bangladesh has no scope to proceed with graduation from LDC status. He described the state of the economy as very poor.

He added that consideration of LDC graduation would come only after overcoming the difficult economic situation inherited from the previous government.

Following the Bangladesh Nationalist Party (BNP) government assuming office, a formal letter was sent to the United Nations in February seeking a delay in LDC graduation. The minister reiterated the position today.

The United Nations classifies relatively less advanced developing countries as Least Developed Countries (LDCs). These countries receive various forms of support and concessions from the international community to facilitate their development and eventual graduation.

The Committee for Development Policy (CDP), under the UN Economic and Social Council (ECOSOC), recommends which countries should graduate from LDC status.

LDC countries are reviewed every three years. Graduation eligibility is assessed based on three criteria: per capita income, human resources, and economic and environmental vulnerability. A country must meet at least two of these criteria or have per capita income at least double the threshold. These benchmarks may change over time.

Bangladesh met all three criteria in the 2018 and 2021 triennial reviews. In 2021, it was recommended that Bangladesh would graduate from LDC status in 2024. However, due to the COVID-19 pandemic, the timeline was extended by two years for preparation. The current deadline for graduation is set for November 2026.

Bangladesh was first included in the LDC category in 1975. As an LDC, the country has benefited from various facilities, including duty-free access for exports.