UN body recommends deferral of Bangladesh LDC graduation

The UN’s dedicated expert committee on preparing the list of least developed countries (LDC) has recommended that the global body defer the graduation of Bangladesh from the LDC group by three years.

The time extension, if approved by the UN General Assembly, will give the country additional time to prepare for the gradual phase-out of special trade, tariff, soft loan and other benefits afforded to LDCs, according to a statement issued by the Economic Relations Division (ERD) on Tuesday.

As per the statement, the UN Committee for Development Policy (CDC) notes that Bangladesh has already exceeded all the criteria required for graduating into a developing and a lower-middle-income economy, with little risk of a retreat.

However, external shocks like the Middle East war, global energy and supply disruptions, and an overhaul of global trade practices pose risks to a smooth transition.

Earlier, on 18 February, the government formally asked for the three-year deadline extension from 24 November this year. On 6 April, Prime Minister Tarique Rahman wrote to the UN chief Antonio Guterres, seeking his personal intervention to this end.

Backing the request, CDC underscored that Bangladesh should not use the extension to delay reforms and rather working on addressing structural challenges. In the next three years, Bangladeshi policymakers have to work to ensure financial stability, boost tax collection, increase productivity and diversify productive sectors.

The international community should also continue providing support after 2029 to ensure a smooth transition. Notably, the World Trade Organization (WTO) provides an additional three-year post-transition support to keep tariffs lower for freshly graduated countries.

If the UNGA does not approve the CDC recommendation, Bangladesh will graduate from the LDC bracket on 24 November this year.