Asraful Bin Shofi Rabbi
A fresh wave of political and economic heat swept across Bangladesh after the Interim Government formally sent its regular report to the UN Committee for Development Policy (UN-CDP), reaffirming the country’s bid to graduate from LDC (Least Developed Countries) status on November 24, 2026. The move has agitated debates across the country’s business community and political arena. Political leaders and businessmen are questioning both the timing and the intent behind the government’s push. In this small country where every economic decision carries political weight, the running ‘apolitical’ government’s desire to secure LDC graduation feels anything but.
Bangladesh has met all three UN-CDP criteria for LDC graduation, according to the Bangladesh Annual Country Report 2025. Firstly, Bangladesh’s Gross National Income (GNI) per capita income now stands at USD 2,765, more than double the minimum threshold of USD 1,306. Secondly, Human Assets Index score has climbed to 78.1, above the required 66 points. Thirdly, the country’s Economic and Environmental Vulnerability score has been reduced to 21.7, below the ceiling of 32. Our country could have been recommended for graduation in 2024, but COVID-19–related delays extended the timeline by two years.
On November 10, local business leaders from FBCCI, BGMEA, BKMEA, BEF, and other associations met with UN officials, led by Ronald Molleruss, at the UN House in Gulshan to discuss the Smooth Transition Strategy (STS) for Bangladesh’s LDC graduation. The business community is requesting a 7-year LDC transition path for Bangladesh, seeking an additional 3 years beyond the standard 3-year UN transition period.
In the meeting, the businessmen highlighted that since August 5, 2024, over 500 factories have shut down, including 353 garment factories. In the first three quarters of 2025, nearly 49% of companies reported losses. Recently, the gas rate increased by 40%, and the interest rate on bank loans stands at 15%. Furthermore, international market expenses related to gas have risen by 286% from 2016 to 2025. Additionally, the Chattogram port charges are increased by 41% from October, 2025.
So far, only the Bangladesh Nationalist Party (BNP) and its allies have voiced serious concerns about the economic implications of LDC graduation. BNP Chairperson Begum Khaleda Zia and Standing Committee member Amir Khasru Mahmud have said about not pursuing ambitious budgets and mega-projects without adequate preparedness. On November 24, the party’s acting chairman, Tarique Rahman, released a detailed critique of Dr. Yunus’ government, arguing that long-term decisions such as LDC graduation and major port developments should be made by a democratically elected administration. Given that BNP is one of the major political forces with a realistic situation to forming the next government, its apprehension about Bangladesh’s readiness is politically significant.
Although the Interim Government views LDC graduation as a matter of national prestige, a premature transition could disproportionately affect the middle class and the youth. High inflation, a fragile banking sector, and an inconsistent taxation policy may trigger further price hikes specially in pharmaceutical sector, strain the agrarian economy, and worsen youth unemployment. In the short term, policy attention should shift toward strengthening the service and agriculture sectors. According to the Bangladesh Economic Survey 2025, 44.67% of the population is engaged in agriculture, while 37.96% belongs to the service sector. Together, these sectors cover more than 80% of the country’s population, with services contributing 51.62% to GDP and agriculture 10.94%. By creating more white-collar employment and expanding agriculture-related enterprises, Bangladesh can support the vast majority of its workforce during the transition. Alongside this, diversification of industries and export products, as well as sustained investment in infrastructure and broader policy reforms, will be essential.
Graduation from LDC to developing country status offers Bangladesh a historic opportunity to expand its economic horizon and global standing. The country could see improved sovereign credit ratings, attract higher foreign direct investment (FDI), and gain access to technology transfer and new markets. Integration into global value chains (GVC) and diversification beyond garments into pharmaceuticals, IT, and agro-processing can strengthen exports. Graduation also enhances Bangladesh’s international recognition, diplomatic leverage, and negotiating power for migrant labor agreements.
Despite its potential benefits, LDC graduation also carries serious risks. Without political stability, skilled human resources, good governance, and stronger infrastructure, Bangladesh may struggle to seize the opportunities that come with the transition. The timeline for necessary reforms is already tight. Bangladesh also faces the imminent loss of EU GSP/EBA trade preferences, concessional foreign aid, and TRIPS flexibilities- changes that could immediately pressure exports and key industries. With an economy still heavily dependent on garments and facing stricter GSP Plus compliance, limited climate finance, and rising labor standards, competitiveness may erode quickly. The WTO estimates export earnings could fall by around USD 537 million annually. At the same time, the IMF warns of emerging debt vulnerabilities, suggesting that graduation without adequate preparation could deepen financial stress despite temporary relief from remittances.
Aftermaths LDC graduation is fully achievable, but only through economic readiness, political legitimacy, and long-term planning. It is not a symbolic milestone, rather it is a state policy based structural transition that will test the strength of every major sector of the economy. To safeguard national interests and secure sustainable growth, Bangladesh must act decisively now, before celebration turns into strain and opportunity gives way to avoidable setbacks.
The writer is a Postgraduate, International Relations, University of Dhaka
