LDC graduation must reflect readiness, not just prestige

Bangladesh should graduate from the least developed country club only when the private sector is ready, not simply to claim prestige, according to Nuria Lopez, president of EuroCham Bangladesh.

The chamber represents 60 European companies, including H&M, Decathlon, Airbus, LafargeHolcim, Arla Foods, and Maersk, with annual business with Bangladesh worth nearly $10 billion.

In an interview with The Daily Star, Lopez said, "Right now, I feel the government is pushing for graduation mostly out of prestige, not readiness."

According to the chamber leader, graduation would certainly be a moment of pride. But she thinks the country, without a clear roadmap and broad consensus, is still unprepared to take such a step.

She described private sector entrepreneurs as the driving force of the economy. Yet, she said the entrepreneurs are the ones who face numerous problems every day.

"Politicians or academics may rely on data and polls, but we are the ones who see what happens on the ground -- when there is no energy, when regulations change, when logistics and financing costs keep rising."

She criticised the lack of vision in product diversification, pointing out that exports remain heavily concentrated in garments.

She said people call the Bangladesh case a miracle, but it is not.

"A miracle means developing everything. Here, only one sector, garments, grew, while others were left behind. This sector cannot absorb more manpower. Without diversification and competitiveness, we cannot move forward."

According to Lopez, the absence of a national vision is the biggest weakness of the country.

"If I ask you today, what kind of country are we building? An open economy or a protected one? We cannot be both. Without a vision and a roadmap, it is very difficult to prepare for graduation."

She said she would be proud to see Bangladesh graduate, but only when the country is prepared.

"Graduating at the right time means after five more years, and with a roadmap, with commitments, with reforms. Not just an extension for free, where nothing changes. We need responsibility."

Lopez urged stronger efforts to secure GSP Plus access in European markets and deeper engagement with the European Business Council, as Bangladesh has the potential to expand trade with the Eurozone.

She talked about areas where the country is falling behind, such as the absence of free trade agreements, while market competitors such as Vietnam and India have moved far ahead.

Energy shortages, high financing costs, poor logistics, rising expenses of around 10 percent a year, and weak vocational training were among the problems she listed. She also criticised over-reliance on import duties instead of meaningful tax reform.

"We cannot attract new industries if we do not reform taxation, energy, and education. Investors want stability, predictability, and skilled manpower. Right now, Bangladesh is not on the radar of any European company."

On trade safeguard measures, she said, "It is not guaranteed. Safeguards and quotas in the RMG sector are critical issues. We need to start negotiating in Brussels now, before regulations are finalised. Otherwise, after the three-year transition, Bangladesh may not qualify for the EU's GSP Plus status."

European brands and retailers, who buy billions of dollars' worth of garments from Bangladesh, are concerned about post-graduation competitiveness and market access, Lopez added.

She stressed that the private sector must be part of policymaking. "The government prepared a strategic plan without us. But we are the ones who will bear the consequences."

"The economy is in private hands. Competitiveness depends on government policies, lower financing costs, stable energy, modern logistics, and strong tax reforms. Without these, we cannot compete."

She also called for a branding strategy to attract foreign investors. "Yes, Bangladesh should graduate. But let's do it properly, with a roadmap, reforms, and responsibility. Otherwise, rushing ahead would be a mistake."

Lopez said those claiming Bangladesh is ready are "misleading". "Academics or economists may give theories, but the private sector sees the real problems every day."

Factories are struggling with power cuts, spiking costs and fragile logistics, she said. Interest rates are high, the financial sector is unstable, and businesses struggle to access funds. "Sometimes I worry my bank may not even give me money to pay salaries. With such conditions, how can we graduate?"

She said Bangladesh can seek deferment. Unlike Nepal or Laos, the country faces unique challenges, from climate risks and frequent disasters to the pressure of supporting 200 million people.

Competitiveness, she said, is being eroded further by logistics costs, which make Bangladesh about 10 percent less competitive than its neighbours.

"That is not something the private sector alone can fix. It needs government reforms and policies."

"The official message of the government is 'we want to graduate', but in private, many are not confident. The private sector must raise its voice, because we face the reality," commented Lopez.