Staff reporter:
The United Nations General Assembly (UNGA) has granted Bangladesh and Nepal a three-year preparatory period before their graduation from least developed country (LDC) status.
Governments of both countries had earlier requested for more time to carry out major reforms in key sectors.
The decision came at the 81st session of the UNGA in New York after extensive discussions early today. The Bangladesh Nationalist Party-led government had sent a letter to the UN Committee for Development Policy (UNCDP) just two days after assuming power on February 19 this year.
In its resolution, the UN acknowledged the severity of the challenges facing Bangladesh amid heightened risks of uncertain magnitude arising from recent conflicts and associated disruptions in international energy and supply flows.
It granted the country a three-year preparatory period until November 24, 2029, taking into account uncertainties surrounding global trade, the lingering effects of recent shocks and long-standing domestic vulnerabilities.
The UN also noted the UNCDP’s view that, although the current graduation framework does not recognise domestic political transitions as grounds for extending preparatory periods, the complexity and specific nature of Bangladesh’s recent political transition merit consideration.
It noted that domestic factors exacerbate the impacts of external shocks and affect the government’s capacity to respond to them.
The resolution suggested that Bangladesh advance domestic reforms and continue implementing them during the extended preparatory period. It also called for the implementation of a national smooth transition strategy, with support from the UN system and in cooperation with bilateral, regional and multilateral development and trading partners. Bangladesh was asked to provide regular updates on implementation in its annual report to the UNCDP.
After receiving Bangladesh’s letter, the UNCDP formed a panel to assess the request at its 28th plenary session in February at the UN headquarters in New York. The UN Economic and Social Council (ECOSOC) later recommended that the UNGA discuss the matter further.
Bangladesh’s plea was widely discussed at the 81st UNGA session and was supported by the G-77 countries, while the European Union (EU) also backed the request, Commerce Minister Khandakar Abdul Muktadir said recently.
The three-year deferment will provide relief from the prospect of facing an average tariff of 12.50 percent on exports from Bangladesh. Local businesses had been pressing the government to delay graduation to allow more time for preparation and ensure a smooth transition. With the deferment, Bangladesh will enjoy duty-free market access to major export destinations until November 2029.
Currently, Bangladeshi merchandise exporters enjoy duty-free market access in 38 countries and trade blocs under the LDC category, while 73 percent of the country’s total exports benefit from LDC-specific preferences.
Bangladesh was scheduled to graduate this year after meeting all three criteria-per capita income, the human assets index (HAI) and the economic vulnerability index (EVI)-twice since 2018 under two triennial reviews by the UNCDP. The country had earlier received a two-year extension because of the Covid-19 pandemic.
In the 2024 triennial review, Bangladesh’s GNI per capita stood at $2,684, according to data from the UN Department of Economic and Social Affairs. The country also scored 77.5 in the human assets index (HAI) and 21.9 in the economic vulnerability index (EVI), surpassing the graduation thresholds in all three criteria.
Although Bangladesh meets all the graduation criteria, the central challenge lies in managing the transition and sustaining development gains. As the largest LDC and the biggest beneficiary of international support measures, Bangladesh faces a uniquely complex transition. The process is unfolding amid political uncertainty and a prolonged economic crisis, placing decades of progress under strain, the report said.
At the second triennial review held by the UNCDP on February 22-26, 2021, Bangladesh received the final recommendation to graduate from the LDC category. The country had first met all three graduation criteria in March 2018.
According to the UN, an LDC needs to fulfil at least two criteria to qualify for graduation. Bangladesh is the only country to have met all three criteria so far. Once a country meets the LDC graduation criteria, it must maintain this performance through two successive triennial reviews by the UNCDP.
Bangladesh’s per capita GNI was $1,827 in 2019, well above the UN threshold of $1,222. In the HAI, Bangladesh scored 75.3, higher than the UN threshold of 66. On the EVI, Bangladesh scored 27.3, below the required threshold of 32.
