Contemplating Overall Trades for Bangladesh Beyond LDC Graduation

Bangladesh, a South Asian country with a rich history and a population of over 160 million, has achieved significant progress in recent decades despite the changing geopolitical dynamics and intricate global connections. Meanwhile, Bangladesh's graduation from LDC (Least Developed Country) status has been scheduled for 2026, signifying its success in socio-economic development and international recognition of this achievement. However, with global economic and geopolitical shifts, rapid technological advancements, and emerging political and social risks, the world's economic landscape is undergoing numerous transformations. Bangladesh must also contend with the consequences due to its interconnectedness with the world.

The motivation behind Bangladesh's aspiration to graduate from the LDC designation stems from its remarkable economic progress. The nation's economic growth has exhibited a robust trajectory despite the challenges posed by the current geopolitical landscape. Bangladesh's average annual GDP growth rate over the last two decades is estimated to be approximately 6%. This consistent expansion has had a significant impact on improving the quality of life, creating employment opportunities, and reducing poverty rates, all of this despite the presence of geopolitical tensions and global economic fluctuations.

The ready-made garment (RMG) sector has played a pivotal role in Bangladesh's economic prosperity, accounting for over 80% of the nation's total export earnings. During the fiscal year 2021-2022, Bangladesh demonstrated its prominence as a significant player in the global clothing industry by exporting garments valued at approximately US $42.613 billion. The nation's garment industry is expected to achieve an important milestone of $100 billion in exports by 2030. This accomplishment will solidify Bangladesh's position as the second-largest apparel exporter worldwide despite global challenges. It was a miracle that Bangladesh's garment exports had maintained 34% growth even considering COVID-19, supply chain disruption, and higher inflation in the developed world, which made clothes a second preference as consumption for most people. The ability of Bangladesh to thrive in a constantly evolving global landscape has been demonstrated by the resilience and flexibility of this particular industry in the face of global geopolitical factors. Also, LDC graduation will make it hard to expand international trade without GSP advantages. Moreover, considering the decreasing FDI, the investment needed to maintain its growth and unemployment makes it hard to move with global trade competition.

The economic progress of Bangladesh has been significantly enhanced by the inflow of remittances from its diaspora, mainly engaged in employment opportunities in the Middle East, the United States, and Europe, despite existing geopolitical conflicts. Remittances significantly contribute to foreign currency revenues, promoting stability in a global landscape marked by geopolitical disputes. Bangladesh is finding itself with trouble in sending the labour force outside in present geopolitical moves in the world and finding it hard to accumulate foreign remittance.

However, these serve as evidence of Bangladesh's financial resilience in the context of a rapidly changing geopolitical landscape. Nonetheless, for better sustainability, Bangladesh must prepare for future events.

Bangladesh has shown exceptional adeptness in managing complex trade ties in the context of a global landscape characterized by geopolitical rivalry and economic conflicts. Bangladesh relies significantly on Western markets for its export activities, with the European Union (EU) and the United States serving as the principal recipients of its garment products. As driven by current geopolitical processes, the interdependence of markets presents both advantageous prospects and potential vulnerabilities. The enduring trade disputes among prominent nations, such as the United States and China, have had significant implications for Bangladesh's international commerce and global supply networks. Bangladesh must maintain adaptability and responsiveness in light of the dynamic global economic environment characterized by the unpredictability of trade ties, tariff conflicts, and the evolving geopolitical landscape.

The need to diversify its export markets has become strategically evident for Bangladesh. Exclusive dependence on conventional Western allies is no longer a viable strategy, particularly given the influence of global political tensions on the conditions governing international commerce. The need to diversify markets and enhance trade ties with Asian, African, and Latin American nations has become essential to mitigate risks and safeguard the nation's economic stability. Dynamic alliances, ongoing power dynamics, and global power centres characterize the current geopolitical environment. Situated in an area characterized by distinct geopolitical dynamics, Bangladesh must adeptly manoeuvre through the intricate web of international political complications and diplomatic obstacles that often impact its environs.

A crucial consideration for Bangladesh is its geographical positioning within a region subject to substantial influence from major global powers. China and India are significant players in the South Asian and broader Asian areas. Effectively managing relationships with neighbouring countries of considerable size and resolving internal and regional disputes plays a crucial role in shaping the nation's diplomatic and commercial policies.

In addition to fostering robust commercial relationships with Western counterparts, notably the European Union and the United States, Bangladesh should actively pursue engagement with emerging global powers such as China. This strategy enables the nation to expand its commercial alliances and minimize potential geopolitical vulnerabilities, especially within a worldwide landscape characterized by fluctuating power dynamics. Furthermore, Bangladesh can explore the possibility of establishing trade relationships with other developing countries like South East Asia, Africa, and Latin American countriesthat also require support for their economies.

Active engagement in international forums and trade agreements is vital to Bangladesh's diplomatic policy. Bangladesh may utilize regional organizations and the World Trade Organization (WTO) to advance its trade interests and secure support in its quest to transition from anLDC classification despite the geopolitical competition that shapes the international environment.

Amidst the current global trade tensions, intricate political dynamics, and the complexity of modern geopolitics, the significance of multilateral diplomacy and collaboration has become paramount. These processes safeguard the nation's economic interests, promote stability within the region, and strengthen diplomatic efforts. The progress achieved by Bangladesh in its pursuit of graduating from theLDC designation stands as a remarkable demonstration of the country's unwavering perseverance and determination despite the intricate geopolitical dynamics prevailing in the contemporary global arena. The nation has made considerable strides in improving living conditions, reducing poverty, and achieving significant economic advancement.

As Bangladesh strives to achieve graduation, the country must adapt to the ever-changing global environment and enhance its diplomatic relations with various counterparts, particularly in a world characterized by fluctuating geopolitical dynamics. Implementing proactive measures by the government, in conjunction with consistent economic development, will play a pivotal role in ensuring a more promising future for this South Asian nation, especially within the framework of current global geopolitical dynamics.

In an era characterized by fluctuating economic dynamics, intricate political circumstances, and geopolitical conflicts, Bangladesh's journey towards graduation from the designation of an LDC is a compelling illustration of unwavering determination and adaptability. By implementing effective strategies, fostering international collaboration, and demonstrating diplomatic acumen, Bangladesh has the potential to transition effectively and advance its development trajectory despite the challenges presented by the current geopolitical landscape.
 

Ahasan Ahmed is Fellow, Centre for
Governance Studies (CGS) and a PhD student,
Indiana University–Purdue University Indianapolis, USA.