Government asks UN for three-year deferment of LDC graduation

The government has requested a three-year postponement of its graduation from the least developed country (LDC) category to the United Nations.

On its inaugural full day in office, the newly established government formally sought a three-year delay in Bangladesh’s transition from the LDC classification.

Shahriar Kader Siddiky, the secretary of the Economic Relations Division, submitted a letter on Wednesday to José Antonio Ocampo, the chair of the UN Committee for Development Policy (UN CDP), asking for an extension of the preparatory period until November 24, 2029.

Bangladesh is currently set to graduate on November 24 of this year, with a third review in progress prior to the final transition.

In response to requests from leaders of major business chambers and trade organizations, as well as some economists, the interim government had previously suggested collaborating with other graduating nations like Nepal and Lao PDR to seek a deferral until 2030, but ultimately left the final decision to the elected government.

The government also recommended that an application be filed before the UN CDP’s annual plenary session scheduled for February 24–27, and that the permanent representative of Bangladesh’s mission in New York be directed by February 23 to present this issue.

In the letter, the newly formed government contended that an extension would create essential policy space to stabilize the macroeconomy, reinforce reforms, and fulfill priority actions outlined in the Smooth Transition Strategy (STS).

It noted that the five-year preparatory period had been “severely disrupted by a series of overlapping external and domestic shocks.”

These shocks included the ongoing repercussions of the Covid-19 pandemic, a sluggish global recovery, the Russia-Ukraine conflict and its effects on energy and food markets, tightening global financial conditions, delays in trade recovery, instability in the Middle East, and increasing uncertainty in the global trade environment.

The letter also cautioned about the escalating uncertainty regarding post-LDC trade arrangements.

The letter further warned of deepening uncertainty over post-LDC trade arrangements.

Concerns include Bangladesh’s likely ineligibility for the European Union’s GSP+ facility for the ready-made garments sector, the imposition of reciprocal tariffs by the US, evolving bilateral trade arrangements, and new free trade agreements by competing economies.

With exports already showing a downward trend and the country heavily reliant on garments amid persistent energy and infrastructure constraints, premature preference erosion could weaken competitiveness and development momentum, the letter said.

While structural priorities such as customs modernisation, energy reforms, export diversification, compliance infrastructure and operationalisation of key industrial facilities are progressing, they remain behind schedule due to cumulative shocks and the shift in policy, the government noted.

In this context, the government attached particular importance to findings from an independent Graduation Readiness Assessment commissioned by the United Nations Office of the High Representative for the Least Developed Countries, Landlocked Developing Countries and Small Island Developing States (UNOHRLLS) at the government’s request.