The United Nations has granted Bangladesh an additional three years to prepare for graduation from the Least Developed Country (LDC) category, extending the transition deadline to November 24, 2029.
Nepal has also received the same extension following lengthy discussions at the 81st session of the United Nations General Assembly (UNGA) in New York on Friday (October 30).
The decision will give Bangladesh more time to complete necessary reforms and prepare for post-graduation trade challenges, particularly in maintaining export competitiveness and securing favourable market access.
Foreign Affairs and trade officials had sought the extension, citing global economic uncertainty, disruptions to international energy and supply chains, lingering effects of recent shocks and domestic structural weaknesses.
The UN acknowledged these challenges in its decision, noting that Bangladesh’s recent political transition and domestic circumstances had increased its vulnerability to external shocks.
The government has been urged to continue domestic reforms and implement its Smooth Transition Strategy in coordination with UN agencies and bilateral, regional and multilateral development partners and trading partners. Bangladesh will also have to submit annual progress reports to the Committee for Development Policy (CDP).
The three-year extension will allow Bangladesh to retain preferential trade benefits as an LDC until November 2029, providing temporary relief from the additional tariffs that could follow graduation.
Currently, Bangladeshi exporters enjoy duty-free market access in 38 countries and trade blocs under special LDC-related trade arrangements. Around 73 per cent of the country’s total exports benefit from these preferential facilities.
Following graduation, Bangladeshi exports could face an average tariff of 12.50 per cent, potentially affecting the country’s competitiveness in international markets.
Bangladesh qualified for LDC graduation by meeting all three UN criteria: gross national income per capita, the Human Assets Index (HAI) and the Economic and Environmental Vulnerability Index (EVI).
According to UN data, Bangladesh’s gross national income per capita stood at $2,684 in the 2024 triennial review, well above the graduation threshold of $1,307.
Its HAI score was 77.5 against the required minimum of 59.6, while its EVI score was 21.9, comfortably below the maximum threshold of 40.6.
Bangladesh was initially recommended for graduation in 2021 after meeting the required criteria in consecutive assessments.
The additional preparation period is expected to help the country strengthen economic resilience, diversify exports, improve productivity and undertake necessary policy reforms before graduation.
However, effectively utilising the extended timeframe will be crucial to maintaining export competitiveness and sustaining economic progress after Bangladesh eventually leaves the LDC category.
