What Happened
Bangladesh has formally requested a three-year deferral of its graduation from the Least Developed Country (LDC) category, citing significant global and domestic economic shocks that have hindered its preparation for the transition. This request was communicated in a letter sent to the United Nations Committee for Development Policy on February 18, 2023, as reported by officials from the Economic Relations Division (ERD) of the Bangladesh Government.
Why It Matters
The request comes as Bangladesh has met the necessary criteria for graduation, including per-capita income, human assets, and economic vulnerability. However, the five-year preparatory period has been disrupted by overlapping crises such as the lingering effects of the Covid-19 pandemic, the Russia-Ukraine war’s impact on energy and food prices, and tighter global financial conditions. Officials have warned that graduating under the current timeline could adversely affect key sectors, particularly the readymade garment industry, due to uncertainties surrounding future trade preferences.
What’s Next
The United Nations Committee for Development Policy is scheduled to review Bangladesh’s request from February 24 to 28, 2023. The outcome of this meeting will determine whether Bangladesh will receive the requested delay, allowing the country more time to stabilize its economy and prepare for the transition away from LDC status.
