Bangladesh’s upcoming graduation from the Least Developed Country (LDC) category in November 2026 represents a historic achievement, but also ushers in significant challenges requiring deep structural reforms, institutional strengthening, and enhanced competitiveness, according to the latest editorial of the International Chamber of Commerce-Bangladesh (ICCB) Quarterly News Bulletin (July-September 2025) released on Wednesday.
The editorial, titled “LDC Graduation: Challenges Ahead,” notes that Bangladesh has successfully met all three United Nations criteria-Gross National Income per capita, Human Assets Index, and Economic Vulnerability Index-reflecting five decades of economic resilience and social progress.
Yet, it warns that graduation signifies not an end but “the beginning of a more demanding chapter” in the nation’s development journey.
Since the political turmoil of July 2024, the country has faced mounting economic pressures, including high external debt, rising inflation and declining investor confidence.
The editorial observes that disruptions in law and order have hampered supply chains and manufacturing, particularly in the textile, logistics and services sectors.
These setbacks have led to production losses, shipment delays and reduced export receipts, while the inherited debt burden has become increasingly expensive to service.
A major concern post-graduation is the gradual loss of duty-free and quota-free access to key export markets such as the European Union, Canada and Australia. The ready-made garment (RMG) industry, which accounts for more than 80 per cent of export earnings, could face tariffs of 10-12 per cent, significantly eroding its price competitiveness.
The ICCB underscores the urgent need for productivity gains, market diversification and a shift towards higher-value apparel categories.
It also warns that global trade dynamics are evolving rapidly, with rising protectionism, complex compliance standards and non-tariff barriers-such as carbon border taxes and due diligence regulations-posing additional hurdles. In this context, Bangladesh must reposition itself as a “responsible and innovative manufacturing hub” by embracing sustainability, traceability and labour compliance.
The end of concessional loans and grants following graduation will further tighten fiscal space, forcing the country to rely on costlier commercial borrowing. With external debt exceeding $100 billion, the editorial cautions that higher global interest rates could strain repayment capacity unless stronger debt management and export diversification are ensured.
To sustain progress, the ICCB calls for bold structural and institutional reforms-simplifying taxation and customs procedures, improving contract enforcement, and advancing digital governance-to attract quality foreign and domestic investment. It also stresses the need for greater regulatory transparency and efficient service delivery to enhance the ease of doing business.
It further highlights weaknesses in education, healthcare and social protection systems, warning that “a post-LDC Bangladesh cannot afford to leave its human capital behind.” It urges accelerated investment in skill development, vocational training and female workforce participation to ensure inclusive growth.
Beyond garments, Bangladesh must also diversify into emerging sectors such as information technology, pharmaceuticals, leather, agro-processing, shipbuilding and services, it said.
The pharmaceutical industry, in particular, should prioritise research and development, upgrade to WHO-GMP manufacturing standards, and pursue global partnerships, supported by targeted government incentives and innovation funds.
Acknowledging both progress and vulnerability, the ICCB editorial concludes that “Bangladesh’s graduation is a milestone to celebrate-but also a call to act,” noting that “the privileges of the past will fade, and the discipline of the future will demand more reform, more innovation, and greater resilience.”
In a related development, ICC Bangladesh-along with 15 major trade bodies-has proposed a 3-5-year deferment of the country’s graduation timeline.
At a press briefing on 24 August, they argued that such an extension would allow industries to rebuild capacity, restore competitiveness and implement critical reforms amid global uncertainty and domestic recovery challenges.
The ICCB asserts that with coordinated policy action, stronger institutions and dynamic private-sector leadership, Bangladesh can turn this transition into “a powerful springboard for inclusive, resilient and sustainable growth”-cementing its transformation from vulnerability to vibrancy.
Courtesy: Prothom Alo Online
