UN approves three-year extension: Bangladesh's LDC graduation deadline moves to 24 November 2029

The United Nations General Assembly has approved a proposal to extend by three more years the preparatory period for Bangladesh's graduation from the least developed country (LDC) category. The new graduation deadline is now 24 November 2029, instead of 24 November 2026.

Uruguay presented the proposal on Bangladesh's behalf at the UN General Assembly on Thursday (29 October). With that, Bangladesh's application to extend the five-year preparatory period for LDC graduation by a further three years was approved.

In the extra time, Bangladesh will have the opportunity to retain trade benefits in exports, remove structural weaknesses in the economy, increase investment and strengthen its competitiveness in international markets.

Bangladesh made the application considering global economic uncertainty, risks in energy supply, the changing situation in international trade and the country's internal economic challenges. The government's aim is to use the extra time to build economic capacity and complete the preparations needed for the post-LDC reality.

Bangladesh met the required thresholds in all three UN criteria for LDC graduation in 2021. On that basis, graduation was scheduled for 24 November 2026, at the end of the five-year preparatory period.

During the preparatory period, however, the effects of the COVID-19 pandemic, disruption to global supply systems, geopolitical conflicts, inflation and uncertainty in international trade put extra pressure on the economy. At the same time, weakness in the banking sector, limits on revenue collection, slow investment and dependence on a limited range of export products have become major challenges for Bangladesh.

The UN Committee for Development Policy (CDP) considered Bangladesh's application and took a positive position in favour of extending the preparatory period. The committee attached a condition, however: significant progress must be made in removing structural weaknesses in the economy during the extra time. The UN Economic and Social Council (ECOSOC) later also recommended that the General Assembly consider the proposal.

One of the biggest challenges for Bangladesh after graduation will be retaining existing special trade benefits in international markets. Bangladesh currently receives duty-free and quota-free access as an LDC in various markets including the European Union. Some of those benefits risk being lost after graduation; how long and on what terms access continues in each market will depend on the trade policies and agreements of the countries concerned.

A large share of Bangladesh's total export earnings comes from the ready-made garment sector. If tariffs rise in major export markets, the price of Bangladeshi products could increase and exporters could fall behind competitors. To face that situation, diversifying export products, finding new markets, cutting production costs and building the capacity of local industry are considered essential.

The government has taken initiatives for trade agreements with various countries to retain a competitive position in foreign markets. Commerce, Industries and Textiles and Jute Minister Khandaker Abdul Muktadir has said the target is to conclude comprehensive economic partnership agreements (CEPA) or free trade agreements (FTA) with eight to ten countries during 2026 and 2027. Preparations for FTA talks with the European Union are also under way, the possibility of GSP Plus access to the EU market is being considered, and the process of joining the Regional Comprehensive Economic Partnership (RCEP) is being advanced.

As part of the preparation, the government is stressing simpler business start-up procedures and an investment-friendly environment. According to the commerce minister, the various processes from obtaining a trade licence to collecting an import registration certificate and opening a letter of credit for machinery imports take an average of 355 days, which discourages investors. To change that, trade licences are planned through a single online portal; alongside that, services of the Registrar of Joint Stock Companies and Firms (RJSC) are being brought fully online, licence tenures extended and inspections by different agencies coordinated.

Uninterrupted energy supply, exploration of new gas fields, increased LNG supply capacity and expansion of solar power generation must also be prioritised. Economists say ensuring financial-sector stability, widening the tax net, strengthening revenue collection, diversifying exports, raising productivity and cutting the cost of doing business should now be key priorities, alongside greater efficiency and accountability in government institutions.

Former BGMEA director and founder and chief executive of Bangladesh Apparel Voice, Mohiuddin Rubel, said: “Extending the LDC graduation preparatory period by three more years is an important opportunity for Bangladesh. But time alone will not be enough; effective steps must be taken in this period to raise the competitiveness of the export sector including ready-made garments. Importance must be given to cutting production costs, ensuring uninterrupted energy supply, raising port efficiency and removing the complexities of doing business.” He said FTA negotiations must be advanced quickly to retain trade benefits in major export markets including the European Union, and at the same time new markets must be created, export products diversified and industrial enterprises prepared to meet international labour and environmental standards.

Overall, the three-year extension gives Bangladesh extra time to overcome economic weaknesses and build competitiveness in international markets. The benefit, however, will depend on how effectively reforms are implemented in this period — if capacity is built by 2029, facing post-graduation trade pressure will be easier; otherwise, expected progress in exports, investment and employment could remain difficult despite the extra time.