Written by The Banking Post
The government has formally requested the United Nations to defer Bangladesh’s graduation from the Least Developed Country (LDC) category by at least three years, citing mounting economic pressures and an incomplete preparation process.
Prime Minister Tarique Rahman wrote to UN Secretary-General António Guterres on Sunday, seeking the extension, officials confirmed on Tuesday.
Bangladesh is currently scheduled to graduate from LDC status in November this year. If the request is accepted, the transition could be pushed back to November 2029.
In the letter, the prime minister acknowledged that Bangladesh has met all three graduation criteria—per capita income, Human Assets Index, and Economic Vulnerability Index—but stressed that the five-year preparatory period was largely consumed by crisis management.
He pointed to a strained macroeconomic environment inherited by the current administration, marked by capital flight, limited private sector financing, a weakened capital market, rising poverty, and growing stress in the banking sector.
“These challenges have been compounded by overlapping global and domestic shocks,” he said, highlighting the lingering impact of the Covid-19 pandemic, climate-related disasters such as the 2024 floods, and global price volatility driven by geopolitical tensions.
The government also flagged the continued burden of hosting over a million Rohingya refugees from Myanmar, alongside declining international assistance.
Officials said the request reflects concerns that Bangladesh has not had adequate time to implement its Smooth Transition Strategy (STS), which was only adopted in February following a prolonged period of political instability.
Recent disruptions—including the July 2024 uprising, pressure on foreign exchange reserves, persistent inflation, and irregularities in the financial sector—have further complicated the transition process, a finance ministry official said.
The move follows calls from business leaders and economists to seek more time, with earlier discussions even considering a coordinated deferral with other graduating countries such as Nepal and Lao PDR.
At the core of the concern is the potential loss of international support measures after graduation. Without an extension, Bangladesh risks facing a “preference cliff,” losing duty-free and quota-free access to key export markets.
The government expressed hope that the additional time would allow for a more stable and sustainable transition to developing country status.
