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Focus Group Discussion on “Implementation of the STS for Smooth Transition from LDC Status”
Taskeen Ahmed, President of Dhaka Chamber of Commerce & Industry (DCCI) requested for deferring the LDC graduation of Bangladesh for at least 2 to 3 years considering the prevailing global and local economic challenging realities, acute shortage of energy in the industrial sector, high inflation and high duty on import, high interest rate, procedural complexities in obtaining credit from banks and lack of access to credit to the private sector. He told these at a Focus Group Discussion on “Implementation of the STS for Smooth Transition from LDC Status” jointly organized by Support to Sustainable Graduation Project (SSGP), Economic Relations Division (ERD) and DCCI on 10 March, 2025 at DCCI Auditorium.
ERD Secretary Md. Shahriar Kader Siddiky and Commerce Secretary Mahbubur Rahman were present on the occasion as the Chief Guest and Special Guest respectively.
From the private sector perspective DCCI President Taskeen Ahmed presented a keynote paper. He also said the GDP growth in the first quarter of the current fiscal was only 1.8 per cent, while the growth of the manufacturing sector was only 1.43 per cent. He said Bangladesh’s economy is still going through various challenges. And amid these challenges Bangladesh is going to graduate from LDC in 2026. A 'Smooth Transition Strategy (STS)' has already been formulated by the government to strategies the process of preparation. But he highlighted few key elements for the implementation of the STS and those are: implementation framework, strong leadership and commitment, partnership and solidarity, policy integration, financing the strategy and monitoring and evaluation. For an effective and competitive STS, he recommended for developing a roadmap to stabilize the economy, create a real-time monitoring and evaluation platform, signing of economic partnership agreement/FTA with key partners and aligning trade, industrial and investment policies.
At the same time, he stressed the need for skill development in the SME sector and ensuring long-term access to low cost credit, signing of free trade agreements to expand exports to the Middle East and South Asian countries, infrastructure development to attract FDI, revision of revenue policy and related policies. He also called for formulating and implementing specific policies to increase exports in other sectors with export potential beyond the readymade garment sector, such as pharmaceutical, leather and leather product, agro-processing, semiconductor, light-engineering and information technology. He later said that for a comprehensive and implementable STS, the role of private sector is crucial.
Speaking as the chief guest, ERD Secretary Md. Shahriar Kader Siddiky said that we have to build capacity at all levels to deal with the impact of the loss of trade benefits in the post-LDC era. In this regard, he said, a committee will be formed with the representatives of trade organizations to determine the needs of the private sector and find solutions. He agreed that still there are so many challenges in the economy and we are progressing day by day, he however said that the position of current account and financial account has improved significantly. To address the statistics/data gap UNSCAP and the European Union will help the government to implement best practices in the world but in the context of Bangladesh. He also informed that South Korea has agreed to help Bangladesh to implement digitalization at all level of government services.
Speaking as the special guest, Commerce Secretary Mahbubur Rahman said that there was a lack of proper planning and implementation from the beginning to meet the challenges of LDC graduation, but more attention should be paid for a sustainable LDC graduation process based on the opinion of the private sector. He called upon the private sector to focus on product diversification in the RMG sector as well as to focus on its promising packaging area.
In his welcome speech, A. H. M. Jahangir, Additional Secretary & Project Director, Support to Sustainable Graduation Project (SSGP), Economic Relations Division, said that our private sector will have to face the most challenges of the LDC graduation. In such a situation, along with the support to the private sector, the coordinated activities of the concerned stakeholders are essential in the implementation of the STS formulated to address the overall challenges of LDC transition, he added.
Dr. Mostafa Abid Khan, Component Manager (Former Member of Bangladesh Trade and Tariff Commission), SSGP, ERD, said that about 73% of our total export enjoys duty-free benefits, which we will not be able to get in the post-LDC period, and we will also be deprived of several institutional benefits. At the same time, the lack of diversification in export products is also one of the biggest challenges for us and it needs to be addressed soon. In addition to expanding local and foreign investment, he stressed on skill development of human resources, institutional capacity building and increasing public-private sector coordination.
Dr. Md. Rezaul Bashar Siddique, Component Manager (Former Additional Secretary), SSGP, ERD said that it is possible to bring microeconomic stability in the country through the implementation of STS. We are still in a good position in all the indices required for LDC graduation, but in this regard, he stressed the need to formulate an integrated ‘Action Matrix’.
Rizwan Rahman, former president of DCCI, said until the ‘Medium’ category is separated from the CMSME, the cottage and small entrepreneurs will never get the real benefits of government’s policy support. He later emphasized on the involvement of the private sector in the compilation of database for country’s SME sector. He also stressed that the country's businessmen are not yet ready for the LDC graduation, so the government should take a decision in consultation with the private sector in this regard whether it is possible to defer for a while.
Manwar Hossain, Chairman of Anwar Group of Industries, said, we are lagging behind in the infrastructure sector, and the shortage of gas supply in the steel and cement industries is hampering the production process, which is affecting the entire economy. Regarding the LDC graduation, he said until the country's export surpasses its import figures, it can be said that we are not ready for the graduation in real sense, he opined.
BKMEA President Mohammad Hatem said, since 2022, we are observing a downward trend in every indicator of the economy, along with export data mismatch. Moreover, few policies of the government and the Bangladesh Bank were not friendly enough for the export sector earlier. Giving examples, he said that EDF fund has been closed along some other funds for private sector, interest rate is also too high, high inflation, moreover, there is an acute shortage of gas supply in the industries. In light of current situation, the BKMEA president said that the private sector needs some time to take preparations for the graduation.
Asif Ashraf, former Director of BGMEA, said, right at this moment, we are not ready for LDC graduation and to get the GSP Plus benefit, our industry has to focus on backward integration.
Md. Mahbubur Rahman Patwary, Managing Director of Sonali Ash Industries Limited, said the government's technical and financial support is essential for the diversification of the jute sector.
DCCI Senior Vice President Razeev H Chowdhury, Vice President Md. Salem Sulaiman, and Members of the Board of Directors and representatives of the public and private sectors attended the event.
Published on: 2025-03-10