The country鈥檚 major trade bodies urged the government to seek a three- to five-year delay in Bangladesh's graduation from the Least Developed Countries status.
They also stated that some major sectors, such as readymade garments and pharmaceuticals, might face difficulties due to an untimely transition.
Saying the country requires more preparation for the transition to the developing country category, they said that premature transition could upset exports and increase borrowing costs.
They were speaking at a joint press conference titled 鈥楲DC Graduation: Challenges Ahead鈥�, organised by the International Chamber of Commerce, Bangladesh, in partnership with 15 major trade bodies and chambers of the country.
In his speech, Md Mahbubur Rahman, president of the ICC Bangladesh, stated that businesses, trade bodies, and chambers strongly support graduation.
鈥楬owever, we stress the need for a 3鈥�5-year extension,鈥� he added.
Bangladesh is scheduled to graduate from LDC status in November 2026, having met all three UN criteria 鈥� Gross National Income, Human Assets Index, and Economic Vulnerability Index 鈥� through two consecutive reviews.
Business leaders said that the milestone was a 鈥榤atter of national pride鈥�, but the transition must be carefully managed.
Citing examples, Mahbubur Rahman noted that the Maldives deferred its graduation for eight years, while Botswana took 20 years.
Moreover, Vanuatu, Angola, Myanmar, and Bhutan have also postponed their transitions, from which Bangladesh can draw lessons for a smoother graduation.
He also stated that businesses were seeking more time to secure trade deals with the European Union, the United Kingdom, ASEAN, and Gulf countries, to offset tariff shocks from the US.
He also stated that the economy is heavily impacted by external debt stress, financial strain, declining inflows of foreign direct investment, global trade tensions, climate pressures, electricity and gas constraints, logistics bottlenecks, the devaluation of the local currency, and economic pressures following the July 2024 uprising.
So, Bangladesh needs to improve these areas before graduation,鈥� he added.
Businesses also said that the loss of preferential trade terms could hit exports hard as the EU, UK, and other key export markets could impose tariffs up to 12 per cent, which could result in a decline of 6 per cent to 14 per cent in exports unless Bangladesh secures GSP+ or free trade agreements, he added.聽
The RMG would be particularly unprotected due to stricter Rules of Origin requirements, higher compliance costs, and rising competition.
Moreover, sectors such as pharmaceuticals, IT, leather, agro-processing, and light engineering would be crucial to reduce overdependence on garments.
鈥楾he shift would also affect financing and multilateral trade privileges as concessional loans would be replaced by market-based borrowing, raising debt-servicing pressures,鈥� he added.
Moreover, Bangladesh would lose access to International Development Association soft loan facilities from the World Bank.
Moreover, Bangladesh would also lose special WTO benefits, such as export subsidies and relaxed patent rules under the TRIPS agreement.
The pharmaceutical sector, which supplies 98 per cent of domestic demand and exports to more than 150 countries, relies on a TRIPS waiver that currently allows generic production of patented medicines until 2033, or until graduation.
Business leaders stated that without an extension, the industry could lose competitiveness, and patients could face significantly higher drug prices.
Responding to a question, Mahbubur Rahman said that they would sit down again with the government regarding the matter.
鈥楾he discussion with the CDP is not our mandate, government would discuss with them,鈥� he added.
Responding to another question, he said that within 3-5 years, they would be fully prepared, as they had reached the timeframe discussed among businesses.
Responding a question, Naser Ezaz Bijoy, CEO of Standard Chartered Bank, said that the graduation is inevitable, but success is not guaranteed. It depends on how urgently and collectively they were prepared.
鈥榃e are urging for a timeframe so that we could execute the graduation properly,鈥� he added.
The businesses also stated that for a successful graduation, they need to focus on areas such as smart trade diplomacy, technological advancement, branding Bangladesh, reform, ease of doing business, diversification, logistics, connectivity, exchange rate stability, and proper debt management.
Business leaders from the Federation of Bangladesh Chambers of Commerce and Industry, Bangladesh Garment Manufacturers and Exporters Association, Bangladesh Knitwear Manufacturers and Exporters Association, Metropolitan Chamber of Commerce and Industry, Dhaka Chamber of Commerce and Industry, and the Foreign Investors鈥� Chamber of Commerce and Industry, and other major trade bodies jointly called for the delay.
