Bangladesh must boost exports before LDC graduation: RAPID

The observations came at a discussion on “LDC Graduation and Competitiveness” organised by Research and Policy Integration for Development (RAPID) at the Jatiya Press Club, where RAPID Chairman MA Razzaque presented a policy paper assessing Bangladesh's export prospects after LDC graduation.

Information Minister Zahir Uddin Swapan attended the programme as the chief guest.

Presenting the paper, Razzaque said Bangladesh's export sector has been facing mounting competitiveness challenges even before LDC graduation, with merchandise exports showing little momentum over the past four years.

According to the paper, Export Promotion Bureau (EPB) data show Bangladesh's merchandise exports declined by 0.6 percent in FY26, while RMG exports dropped by 1.6 percent.

UNCTAD data also indicate Bangladesh's exports grew by only 2 percent in 2025, compared with 7 percent growth in global exports.

The study noted that Bangladesh is falling behind several regional competitors. Cambodia recorded export growth of 17.3 percent in 2025, Vietnam 16.8 percent, Indonesia 6.9 percent, Sri Lanka 6.3 percent and China 5.5 percent.

Although Bangladesh exported goods worth about $48.2 billion in 2025 compared with Cambodia's $31.3 billion, Cambodia has rapidly narrowed the gap after expanding exports by around $9 billion since 2022, the paper said.

Razzaque warned that Bangladesh's exports remain excessively concentrated in a narrow range of products, particularly garments, making the economy more vulnerable to external shocks and intensifying global competition.

He said Bangladesh's export concentration is about four times higher than the average among developing countries, while new products contribute very little to export growth.

The study also highlighted that Bangladesh has become less export-oriented over time, with exports and trade accounting for a declining share of GDP, weakening one of the country's principal engines of structural transformation.

The paper cautioned that LDC graduation will reshape Bangladesh's access to key international markets.

While Australia and the United Kingdom are expected to retain largely duty-free access for Bangladeshi products under their existing preference schemes, exporters could face higher tariffs in major destinations, particularly the European Union, India, China, Japan and South Korea.

According to the presentation, even if Bangladesh secures the EU's GSP+ facility after graduation, apparel exports would still face a 12 percent tariff because of safeguard provisions, reducing the expected benefits for the country's largest export sector.

The study also warned that recently concluded trade agreements between the European Union and countries such as India and Vietnam could further erode Bangladesh's competitive advantage in the EU market.

Simulation exercises presented at the event suggested Bangladesh could face significant export losses under different post-graduation scenarios if competitiveness is not strengthened through policy reforms.

Beyond tariffs, Razzaque identified exchange-rate management, high domestic inflation, weak export diversification, rising production costs and limited productivity growth as key factors undermining Bangladesh's global competitiveness.

He stressed that nominal currency depreciation alone would not be sufficient to improve export performance if domestic inflation continues to offset its benefits.

The paper called for a comprehensive strategy centred on export diversification, productivity enhancement, trade facilitation, investment in non-RMG sectors, improved logistics, better infrastructure and stronger trade negotiations to ensure a smooth and sustainable transition after LDC graduation.

The discussion brought together policymakers, economists, business leaders and trade experts to examine policy options for maintaining Bangladesh's export momentum in the post-LDC era, reports UNB.