Bangladesh must strengthen its institutions, pursue deeper policy reforms, and boost global competitiveness to ensure a smooth and sustainable transition from the Least Developed Country (LDC) category to that of a developing nation, according to the latest News Bulletin (July-September 2025) of the International Chamber of Commerce Bangladesh (ICCB).
The bulletin’s editorial noted that the upcoming graduation, set for November 2026, marks not an end but the beginning of a more demanding chapter, one that requires greater resilience amid a volatile global economy, according to a press release.
“Bangladesh is on the brink of a historic transition. Having fulfilled all three United Nations criteria — Gross National Income (GNI) per capita, Human Assets Index, and Economic Vulnerability Index — the country is set to graduate from the LDC category,” the editorial said.
“This achievement stands as a testament to five decades of resilience, industrial growth, and social advancement.”
However, the ICCB cautioned that LDC graduation would phase out duty-free and quota-free market access in major destinations such as the European Union, Canada, and Australia. For the readymade garment (RMG) sector, which contributes over 80 percent of the country’s export earnings, tariffs of 10-12 percent could significantly erode competitiveness unless productivity rises and exports diversify into new markets and higher-value segments.
The bulletin also warned that global trade dynamics — marked by rising protectionism, complex supply-chain standards, and non-tariff barriers such as carbon border taxes and due-diligence laws — pose additional challenges.
“As the global apparel market increasingly prioritises sustainability, traceability, and labour compliance, Bangladesh must reposition itself as a responsible and innovative manufacturing hub,” it said.
Graduation will also end concessional loans and grants, compelling Bangladesh to rely on costlier commercial borrowing.
“With over $100 billion in external debt, rising global interest rates could strain repayment capacity,” ICCB observed, stressing the need for stronger debt management, higher reserves, and diversified exports to maintain fiscal stability.
The chamber underscored that sustained progress will require bold structural and institutional reforms, including simplified taxation and customs procedures, improved contract enforcement, and wider adoption of digital governance to attract quality investments. Enhancing regulatory transparency and service efficiency will be essential to improve the ease of doing business.
At the same time, weaknesses in education, healthcare, and social protection systems must be addressed to ensure inclusive growth.
“A post-LDC Bangladesh cannot afford to leave its human capital behind,” ICCB said, calling for expanded skill development, vocational training, and greater female participation in the workforce.
The bulletin further suggested that graduation offers a chance to diversify beyond garments into sectors such as information technology (IT), pharmaceuticals, leather, agro-processing, services, and shipbuilding, — areas vital for sustaining long-term competitiveness.
