Top corporate executives on Wednesday urged a visiting United Nations (UN) delegation to propose delaying Bangladesh’s exit from the least developed country (LDC) category by five to six years. They pointed out existing macroeconomic pressures, questionable growth data from the prior administration, and insufficient overall readiness for the transition.
In response to concerns raised by the private sector regarding their lack of preparedness, the high-level UN team requested a comprehensive plan outlining the country’s readiness for graduation. They announced plans for another delegation to visit Dhaka in January for a more thorough evaluation.
Bangladesh is set to transition from LDC status to a developing nation in November next year. Despite the interim government’s commitment to this timeline, local businesses are pushing for an extension due to perceived inadequacies in readiness.
In light of this, the government invited the UN team, which included officials and independent experts, for an on-the-ground assessment. The delegation was led by Roland Mollerus, the acting director of the United Nations Office of the High Representative for the Least Developed Countries, Landlocked Developing Countries, and Small Island Developing States (UN-OHRLLS).
During a meeting at the UN House in Dhaka, business leaders expressed their desire for a deferment citing escalating economic challenges such as high bank interest rates, a history of loan scandals, and the repercussions of global events like the pandemic and the Russia-Ukraine conflict.
They alleged that reported economic growth figures were misleading and exaggerated, misrepresenting Bangladesh’s true state to the international community. Businesses also highlighted limited progress in preparing for post-graduation hurdles, including the absence of significant trade agreements crucial for maintaining preferential market access after graduation.
Currently, Bangladesh benefits from LDC-related trade privileges in 38 countries, with the majority of exports tied to these preferences. Despite this, the country has only secured one preferential trade agreement, with Bhutan. Upon graduation, Bangladesh stands to lose access to concessional loans and trade benefits, potentially destabilizing the macroeconomic environment.
At the meeting, Md Zakir Hossain from the Bangladesh Textile Mills Association (BTMA) mentioned that the UN delegation requested a detailed roadmap for LDC graduation readiness, emphasizing the need for a six-year deferral rather than a complete halt to the process. Kamran T Rahman of the Metropolitan Chamber of Commerce and Industry (MCCI) echoed concerns about Bangladesh’s unpreparedness and called for more time to address the challenges.
Other industry leaders, including Mohammad Hatem from the Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) and Mahmud Hasan Khan from the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), underscored the current economic difficulties and the risks posed by graduation.
In conclusion, domestic industries stressed the importance of prioritizing their needs and advocated for a postponement, citing various economic and logistical hurdles that need to be addressed before Bangladesh can successfully navigate its transition away from LDC status.