UN body agrees to assess Bangladesh's request to delay LDC graduation by 3 years
The government also raised concerns over post-LDC trade risks, including possible loss of trade preferences for ready-made garment exports in the European Union and potential reciprocal tariffs from the United States
The United Nations has accepted Bangladesh's application to defer its graduation from the Least Developed Countries (LDC) category by three years and will now assess the grounds cited by the government before taking a decision.
The request will be reviewed by the United Nations Committee for Development Policy (CDP), which began a five-day meeting in New York on 23 February.
Debapriya Bhattacharya, a member of the CDP and head of its Enhanced Monitoring Mechanism (EMM) sub-committee, confirmed the development to The Business Standard.
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He said the committee had acknowledged receipt of Bangladesh's letter. However, acceptance of the application does not mean the deferment has been granted.
The CDP will review the points raised and then submit its recommendations to the United Nations Economic and Social Council (Ecosoc), before the matter goes to the UN General Assembly for a final decision, he added.
"It may take a couple of weeks to have the CDP decision. Then it goes to Ecosoc and then to the General Assembly," Debapriya said.
He added that the CDP would assess whether Bangladesh is "in crisis due to unanticipated and beyond control factors".
When asked whether the committee would recommend deferment, he replied, "It can be only said after the end of the review process of the application."
The EMM sub-committee was also set to meet this week to review the situation of countries that have already graduated from LDC status and those in the pipeline. Bangladesh, Nepal and Laos are currently in the graduation pipeline.
"One of the sessions will discuss the status of Bangladesh, Nepal and Laos. It will be scrutinised what progress these countries have made so far and whether they are prepared for graduation at the end of the year," Debapriya said before leaving Dhaka.
Under the current schedule, Bangladesh is set to graduate on 24 November this year. The third and final review process ahead of graduation is underway.
The day after assuming office, the new government formally applied to defer graduation until 24 November 2029.
A letter signed by Economic Relations Division Secretary Md Shahriar Kader Siddiky was sent on 18 February to José Antonio Ocampo, chair of the CDP.
In the letter, Bangladesh said although it continues to meet all three graduation criteria – Gross National Income per capita, Human Assets Index and Economic Vulnerability Index – the five-year preparatory period had been severely disrupted by overlapping global and domestic shocks.
The government referred to the lingering impact of the Covid-19 pandemic, the Russia-Ukraine war, tensions in the Middle East, tightening global financial conditions, and slow recovery in international trade.
Domestically, it cited financial sector irregularities, the July 2024 uprising that led to a change of government, and the ongoing burden of hosting displaced Myanmar nationals.
"These combined shocks have led to macroeconomic instability, slower GDP growth, elevated inflation and declining trends in public and private investment," the letter said.
It added that foreign exchange reserves had come under pressure, imports of capital machinery had fallen, and job creation had slowed.
"As a result, policy focus necessarily shifted towards short-term stabilisation and crisis management," the letter noted. "The preparatory period has not functioned as intended."
The government also raised concerns over post-LDC trade risks, including possible loss of trade preferences for ready-made garment exports in the European Union and potential reciprocal tariffs from the United States.
Invoking the crisis response provision under the EMM, Bangladesh has sought a three-year extension to stabilise the economy and complete priority actions under its Smooth Transition Strategy.
Officials said an initial assessment could be prepared within two weeks of the February meeting. The CDP's observations and recommendations are expected later, with a final decision likely by September, subject to approval by the UN General Assembly.
