Prepare for LDC graduation despite possible delay

Bangladesh should continue preparing for graduation from the group of Least Developed Countries (LDCs), even if the transition is deferred by a few years, as postponement should not distract from the reforms needed to ensure a smooth and sustainable graduation, an economist said on Wednesday.

“The deferment of graduation should not be seen as a diversion from what needs to be done, nor should it serve as an excuse for failing to take the necessary steps to ensure Bangladesh’s smooth and sustainable LDC graduation,” said Mustafizur Rahman, distinguished fellow of the Centre for Policy Dialogue (CPD).

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The UN General Assembly (UNGA) is scheduled to decide on Bangladesh’s request to defer its graduation in September 2026.

Approval of the request to extend the preparatory period by three years will require the support of a majority of member states (50 percent plus one).

Approval of the request to extend the preparatory period by three years will require the support of a majority of member states

Nepal has also submitted a similar request, Mustafizur said while presenting a keynote on Bangladesh’s sustainable LDC graduation at an event organised by the Institute of Cost and Management Accountants of Bangladesh (ICMAB) in Dhaka.

Bangladesh will need to pursue proactive diplomacy to secure support at the UNGA, particularly from its traditional development partners, including the European Union (EU), Canada, Australia, the United Kingdom, Japan, China and India, he said.

The Bangladesh government is also mobilising development partners based in the country so they can advocate Bangladesh’s case in their respective capitals.

At its meeting with Bangladesh government representatives in May 2026 and in its Crisis Assessment Report on Bangladesh, the UN Committee for Development Policy (CDP) observed that while Bangladesh had justified reasons to seek an extension, it had exceeded all three graduation thresholds by a significant margin.

The CDP said the request for a three-year extension was consistent with the practice followed in all five previous extensions granted to graduating countries.

An expert advisory body to the UN Economic and Social Council, the CDP also highlighted uncertainty arising from external shocks and acknowledged the time needed to adjust priorities under the Smooth Transition Strategy (STS), the roadmap for Bangladesh’s LDC graduation.

However, it warned that prolonging Bangladesh’s stay in the LDC category despite comfortably meeting the graduation criteria would delay the benefits of graduation, according to the keynote.

During a panel discussion, Commerce Minister Khandakar Abdul Muktadir said the government had sought deferment to make the transition more sustainable, warning that inadequate preparation could lead to economic stagnation and setbacks.

He said medicine prices could rise after graduation because manufacturers would need to purchase patents for some drugs, making them less affordable for consumers.

The minister also said Bangladesh lacks LNG storage facilities, leaving industries vulnerable during global crises such as wars.

He added that the government plans to introduce a digital business registration portal that will reduce the approval time for all required documents to 14 days from the current 355 days.

The process is expected to be completed this year, the minister said.

Mahmud Hasan Khan, president of the Bangladesh Garment Manufacturers and Exporters Association, said Bangladesh must secure a trade agreement with the EU to retain duty-free market access. Otherwise, exporters could lose competitiveness to India, which has already signed a free trade agreement with the bloc.

Md Abdur Rahman Khan, former chairman of the National Board of Revenue, said Bangladesh would already have graduated had it not been for the fallout from Covid-19.

Eleash Mridha, managing director of PRAN Group, urged the government to sign a trade agreement with the Association of Southeast Asian Nations to expand access to Asian markets.

Md Nasser Shahrear Zahedee, chairman of the Radiant Group, said the pharmaceutical sector should not worry about LDC graduation, as local companies could partner with foreign firms to benefit from patent protection after graduation.