It Is Indeed Good For Us

Delaying graduation clips the wings, Delaying opportunities as popular mood swings.

Bangladesh's plan to become graduate from Least Developing Countries(LDC) faces stiff resistance from various quarters. In 2026, Bangladesh is scheduled to get out from LDC countries, discarding the privileges it is enjoying all these years. Bangladesh is supposed to be a developing country by 2020. However,COVID-19 obstructed the graduation. Now many business platforms and other organizations suggest the govt to delay the graduation for another 3/5 years. Removal of duty-free access,higher cost of private loan, Intellectual Property Related(IPR) restrictions are identified as reasons behind such proposition.

Govt earlier decided to make appeal against graduation, but later dropped the idea in favor [of] smooth graduation. I personally think smooth graduation will be best possible alternative instead of delay. This is not the first time we are encountering a situation like this.The closure of Multi Fiber Arrangement back in 2005 cast similar shadow over our RMG export and economy. The MFA allowed Bangladesh to source raw-materials from various countries and export the ready-made garments to the West, which also gave Bangladesh quota on RMG export. The facility was a relaxation on value addition clause and ensured some set market access for Bangladesh. Many argued that post-MFA and Quota period [would] be a doomsday scenario for Bangladesh garments. Fortunately, Bangladesh proved them wrong, increasing volume of export from mere $5 billion to more than $40 billion now. And Bangladesh also increased its value addition in the RMG sector. It also witnessed unprecedented amount of investment in backward and forward linkage industry.

By the same token, I am convinced, post-LDC graduation will be a path strewn with overcoming challenges,bringing the changes needed for a developing country and endless opportunities against the overblown challenges.

First, disappearance of duty-free access is an ungrounded fear. The moment I am writing this ,Japan has already given Bangladesh duty-free access for 3 more years after LDC graduation in 2026. Tariff debate has led to bilateral trade agreements that witness many countries enjoying favorable access to developed countries. FTAs,PTAs turn out to be deciding factors here. Despite being an LDC country,Bangladesh may lose big if its rivals get FTA advantage to key export destinations. Solution is to become a developing country and ink more FTAs.

Second, duty-free access to developed countries also accompanied with money laundering activities through faulty ,and willful, trade invoices. Even official export figure encountered $10 billion mismatch in 2024, an embarrassment to the govt. Removal of duty-free access will curb the incidence of money laundering and provide opportunities for more able exporters,showing the wrongdoers the exit door. Small and medium factories will become subcontractors of big exporters. Voilà, this withdrawal of duty-free access is not an issue.

Third, no more soft credit is also a boon for Bangladesh. As I shared this perception before, higher interest rate works as screen to thwart any attempt to take unnecessary loans. Bangladeshis in general are paying the price for this unaccountable development works at the cost of their money with the support of soft credit. So there will be less unreasonable development works with the evaporation of soft credit. Private sector that depends on overseas credit market will come to stock market for financing, developing the local bond market and ensuring more accountability and transparency.

Fourth, intellectual property right hurdles will pave the path for domestic investment on local solutions for addressing the issue. One argument I hear is that medicines will be costly as the ingredients will be costly (they will no longer be free). Govt recently lowered duty on cancer-related drugs. Govt can do so for essential drugs on serious diseases. I think once this advantage is over,we will see shutting down of many small pharmaceutical companies. Many of them have capacity to produce base ingredients for medicines of silly diseases and often they are being used as precursor to make narcotics in the neighboring countries. UNODC already highlighted the issue in its report(see "UNODC Report & Meth Market Of Bangladesh" published here on July 25,2019). LDC graduation is a hidden blessing for Bangladesh in combatting the narco. It will significantly lower the incidence of narco activities and curbing the volume of narco trade and thereby lowering the incidence of narco-related violence.

Fifth, LDC graduation will make govt more oriented to people. As a developing country, govt will be committed to ensure accountability, spend a percentage of its GDP in healthcare, education, defense and other sectors like other responsible developing countries.And we will see people-centric development and policy initiatives.

Plethora of arguments put forward to delay LDC graduation based on unsubstantiated fear. I hope this piece will work as a template for the low voice in favor of early graduation that Bangladesh desperately needs. LDC graduation is indeed opening opportunities for Bangladesh as a hidden blessing to address many enduring issues that deeply trouble the country. The UN itself once delayed graduation of Bhutan and this may happen with Bangladesh, a country plagued by corruption and mismanagement. I hope the incumbent and future govt will stay on course for graduation by 2026. Delaying graduation means delaying the opportunities.

[Update: this piece is updated by me on November 14,2025 at 9 PM Bangladesh Standard Time.Update includes reference to UNODC report.]