BB Governor slams business bodies, says LDC graduation cannot be delayed

Graduation from the Least Developed Country (LDC) category—whether in 2026 or later—is inevitable, Bangladesh Bank Governor Dr. Ahsan H Mansur has said, urging all stakeholders to begin preparations without delay. “LDC graduation and economic development are intertwined. We cannot sacrifice long-term gains for short-term benefits. 

There is no room for delay; everyone must prepare,” the governor said. He made the remarks while speaking as the chief guest at a roundtable discussion titled “Implications of LDC Graduation for the Banking Industry: Bangladesh Perspective”, organised on Tuesday by the International Chamber of Commerce (ICC), Bangladesh.

The governor said LDC graduation is essential for the country’s economic progress. “The policies we adopt will drive development and support the graduation process. To accelerate development, LDC graduation must take place,” he added.

"Policies alone are not enough. Skills must be developed. Logistics, connectivity, ICT, education, and healthcare all need improvement. We should not sacrifice long-term gains for short-term benefits," he also added.

Criticising leading business organisations, including the Federation of Bangladesh Chambers of Commerce and Industry (FBCCI), the governor said, “Business organisations are behaving like puppets.” He noted that business bodies applauded the introduction of the 6–9 percent interest rate cap but remained silent during episodes of capital flight. “Such behaviour can never strengthen democracy,” he said.

Acknowledging that interest rates remain relatively high, the governor attributed this largely to massive capital flight, estimated at around US$20 billion. He said capital flight has fuelled the rise in non-performing loans (NPLs), while deposit growth had once fallen to 6 percent before recovering to 11 percent. “If governance, supervision and customer confidence improve, interest rates will come down. Reducing bad loans will also help curb inflation,” he said. The discussion was moderated by ICC Bangladesh President Mahbubur Rahman and attended by top business leaders and bankers. Many participants argued in favour of delaying LDC graduation.

Emphasising that LDC graduation is a fundamental issue, the governor said Bangladesh should not be compared with countries such as Somalia, South Sudan or Afghanistan. “Bangladesh is far ahead in GDP and other development indicators. Remaining in that group is not a matter of pride,” he said. He added that Bangladesh aims to join the ranks of developing economies such as Malaysia or India and gain broader global recognition. 
Stressing the need to insulate the banking system from future political interference, the governor said legal reforms aligned with modern central banking practices are necessary. An amendment to the Bangladesh Bank Order was sent to the government four months ago but has yet to be approved, he noted.

ICC Bangladesh Vice President A K Azad said tight monetary policy has driven up interest rates, already costing around 12 lakh jobs, with another 12 lakh at risk over the next six months if the situation continues. He said investment has stalled and revenue collection has declined, arguing that the economy cannot be managed through monetary policy alone. At the event, ICC Bangladesh Chairman Muhammad A (Rumee) Ali delivered the welcome address, while Shah Md Ahsan Habib of the Bangladesh Institute of Bank Management (BIBM) presented the keynote paper.

Ha-Meem Group Managing Director AK Azad speaking at the event said tightening monetary policy has already left around 1.2 million people unemployed and warned that another 1.2 million could lose their jobs in the next six months. He said managing the economy solely through monetary policy is not feasible without boosting investment and employment. "Without increasing investment and employment, it is not possible to manage the economy only through monetary policy," he said. Referring to a research paper, AK Azad said exports to the European Union could decline by as much as 45% once Bangladesh graduates from least developed country (LDC) status. The discussion also featured contributions from Bangladesh Association of Banks Chairman Abdul Hai Sarker; Mutual Trust Bank Managing Director Syed Mahbubur Rahman; Prime Bank Managing Director Hasan O Rashid; Bengal Commercial Bank Chairman Md Jasim Uddin; and Standard Chartered Bank CEO Naser Ezaz Bijoy.