The government is making the national economy vulnerable by rigidly pursuing Bangladesh’s scheduled Least Developed Country (LDC) graduation in 2026 without addressing mounting private-sector concerns, business leaders fear.
“While the challenges of post-graduation have long been discussed, nothing seems to matter to the interim government,” International Chamber of Commerce and Industry Bangladesh President Mahbubur Rahman told TIMES of Bangladesh.
He said LDC graduation is a natural step for a growing economy, but the adverse conditions that have emerged demand far greater caution.
Bangladesh has already sent its annual progress report on LDC-graduation preparation to the UN Committee for Development Policy, and the report reportedly reflects both eligibility and challenges fairly.
Mahbubur Rahman said there are two compelling grounds for deferral – weaknesses hidden beneath the surface and strong global headwinds. He said the three criteria on which Bangladesh became eligible in two consecutive assessments are far less relevant now.
According to him, per-capita income was calculated when the dollar was Tk85, but the rate has now surged to Tk122. Human-development progress, he added, was “mostly on paper” and is yet to be competitive for an economy preparing to graduate from LDC status.
Mahbubur said the interim government’s actions suggest as if “the private sector does not exist,” warning that the economic consequences of a premature graduation would be severe due to squeezed market access, higher costs and increased fiscal pressures.
Experts had earlier suggested seeking a formal deferral – including a letter from the Chief Adviser – but no such move has been made.
Instead, Chief Adviser’s Special Assistant for Finance Anisuzzaman Chowdhury said in a recent media interview that the interim government is not seeking deferral because it fears rejection from UN member states next year.
Bangladesh Chamber of Industries President Anwar-Ul-Alam Chowdhury said the interim administration is “making the national economy vulnerable” by ignoring the private sector, adding that entrepreneurs are facing multi-layered pressure for the first time in the country.
He said no investor can expand labour-intensive industries such as apparel under the new labour law, while many existing factories risk becoming sick.
He said apparel exporters are already struggling to compete with China and Vietnam in the EU market despite enjoying duty-free access as an LDC. “How can they remain competitive with 12%-13% duty from December 2029 once graduation takes effect next year?” he said.
Anwar-Ul-Alam Chowdhury said the struggle will intensify as Vietnam and India secure duty-free access under their FTAs with Europe in the meantime.
He said costs – from royalty payments to foreign patent holders to taxes on imports – will rise steeply, while incentives for key industries will shrink, weakening domestic industries and eroding state revenues.
Chowdhury, also a former BGMEA president, said this would deepen the economy’s vulnerability.
He alleged that the interim government is following its “pre-set agenda” rather than strengthening the national economy and questioned how major national decisions such as LDC graduation were discussed with the business community.
He said logistics costs in Bangladesh are now higher than in the UK, and the recent rise in shipping charges and transport-worker wages will worsen the situation. Energy shortages and price hikes are also continuing, he added.
Both business leaders said there are precedents for deferral and Bangladesh has strong grounds for seeking one after the post-July political transition.
“Thank God, economists involved in the process say Bangladesh may even apply for deferral at the eleventh hour,” said Anwar-Ul-Alam Chowdhury.
