Bangladesh – Graduation from Least Developed Countries Status and Its Implications (Japanese)

This paper discusses the implications and impacts of Bangladesh's graduation from the Least Developed Countries (LDC) status through an analysis of the country's economic and industrial structure, a summary of the event of graduation, and a survey and analysis of issues in relation to Japanese companies. Bangladesh is expected to graduate from the LDC in 2026. While graduation has some advantages, such as improvement of the country's external image, it also has some disadvantages, such as the inability to use the special preferential tariffs that are granted to countries with that status by the international community. The survey conducted by the authors demonstrates that Japanese companies that operate in Bangladesh and that benefit from special preferential tariffs have already begun to gather information and are even considering transferring their production bases. In order to avoid losing such foreign direct investment, Bangladesh is looking into free trade agreements (FTAs). However, in addition, we believe it is necessary for Bangladesh to develop a friendly business environment that is comparable to that of neighboring Southeast Asian countries, to strengthen its industrial competitiveness, and improve the level of trade diversification. The Japanese government also needs to make further efforts to deepen bilateral economic relations.