UN decision on three-year LDC graduation extension expected by mid-Nov: Commerce Minister

Bangladesh expects the United Nations to decide by mid-November on its proposal for a three-year extension of the country’s graduation timeline from the least developed country (LDC) category, Commerce Minister Khandakar Abdul Muktadir said on Monday.

Speaking at an event organised by the Economic Reporters Forum (ERF), the minister said the proposed extension had received support within the UN system, including from D-8 countries and the European Union.

He said the extension is necessary because previous administrations had focused on the political achievement of graduation without adequately preparing the economy for the loss of preferential trade benefits and other support.

Bangladesh is currently scheduled to graduate from the LDC category in 2029. The government is pursuing trade agreements with key partners to protect export competitiveness after graduation.

Comprehensive economic partnership agreements (CEPAs) have been signed with Japan and South Korea, while negotiations with the United Arab Emirates are expected to conclude in November, the minister said.

Bangladesh is also preparing to negotiate a free trade agreement with the European Union, aiming to conclude it before graduation rather than relying solely on the Generalised Scheme of Preferences Plus (GSP+). The government is pursuing trade arrangements with Oman, Singapore and New Zealand and seeking accession to the Regional Comprehensive Economic Partnership (RCEP).

The minister also outlined plans to simplify business procedures, reduce bureaucratic delays and attract investment. The government aims to eliminate the need for investors to obtain 30 to 40 separate permits from 23 to 24 ministries by 2027.

He said businesses currently take an average of 355 days to complete essential formalities, including obtaining a trade licence, opening a bank account, securing initial clearances, obtaining an Import Registration Certificate and opening letters of credit for machinery.

The government plans to digitise trade licensing across union parishads, pourashavas and city corporations, allowing applicants to submit documents, pay fees and print licences online. Company registration and share transfers at the Registrar of Joint Stock Companies and Firms will also be fully digitised.

Other proposed measures include extending licence validity from one year to three to five years and replacing multiple inspections by different agencies with coordinated joint inspections.

The minister said Bangladesh needed sustained economic growth and higher investment to expand from a $500 billion economy towards the $1 trillion mark. With an estimated 20 lakh to 22 lakh people entering the workforce annually, he said attracting investment was essential to creating jobs.

He identified four key conditions for investment: uninterrupted energy supplies, hassle-free administrative procedures, transparent dispute resolution and access to domestic and international markets.

The government is expanding liquefied natural gas (LNG) infrastructure, domestic gas exploration and renewable energy projects. The energy ministry expects to add 1,500 million cubic feet of gas per day during the government’s tenure, he said.

At the same event, Dr Mostafa Abid Khan, chief executive officer of the Bangladesh Foreign Trade Institute, warned that Bangladesh could face significant export losses after graduation because of the loss of duty-free, quota-free market access.

Citing a World Trade Organization estimate based on 2018 data, he said potential export losses could reach 26%. He also highlighted Bangladesh’s heavy reliance on four garment products—T-shirts, trousers, pullovers and shirts—which together account for more than half of the country’s total exports.

However, he said 93.6% of Bangladesh’s exports would face no change in market access conditions for up to two years after graduation, while conditions for around 90% would remain unchanged for up to three years.

The projections underscore the importance of securing trade agreements, diversifying exports and improving the business environment as Bangladesh prepares for its planned LDC graduation.