Local businesses need to become more competitive at the international level so that Bangladesh can enjoy a smooth graduation from the UN's group of least developed countries (LDCs) in 2026, speakers said at a webinar yesterday.

To do so, productivity needs to be increased while reducing production costs, improving the business climate and infrastructure as well as the trade system, they said.

Besides, linkage industries should be encouraged alongside the establishment of special economic zones, fashion designing institutes and active pharmaceutical ingredient (API) parks, they said.

They went on to say that making a permanent exit from LDC status would be a real recognition of the country's development even though it would result in Bangladesh facing many challenges.

The country has developed significant trade-related capacities and adaptabilities despite the withdrawal of the GSP facility by the US, said the speakers.

Moreover, a disaster prediction in the garment sector when a Multifibre Arrangement was phased out through a separate deal on textiles and clothing did not come about to be true, they said.

This is because Bangladesh successfully steered clear of the global financial crisis with little or no impact on exports, they added.

The webinar, styled "LDC graduation: Challenges and Opportunities", was organised by the Institute of Chartered Accountants of Bangladesh (ICAB).

"Our LDC graduation will bring a mixed set of new realities and the country will lose a wide variety of preferences and privileges in global trade," said Planning Minister MA Mannan.

"As the duty-free benefits we enjoy under the World Trade Organization (WTO) regime will no longer be effective, our exports will face new challenges," he said.

In addition, tariffs on Bangladesh's products in major international markets and its debt servicing liabilities will increase due to the cessation of concessional finance, he said.

"So, we need to create a proper enabling business environment in the country," Mannan said, adding that the government has taken many initiatives, including the signing of free trade or preferential trade agreements, to increase Bangladesh's overall competitiveness in trade and commerce.

ICAB President Mahmudul Hasan Khusru said both the private and public sectors should prepare to face the post-graduation challenges.

The government is developing 100 special economic zones and more than two dozen hi-tech parks in order to meet the demand of investors, he said.

Bangladesh Investment Development Authority has also come forward to provide one-stop services to investors, he said.

"And to maintain the current export momentum, Bangladesh should opt for bilateral free trade deals," he added.

Keynote speaker Shubhashish Bose, CEO of the ICAB, made a number of recommendations to help face the post-graduation challenges while minimising its negative impacts on trade.

This includes securing the European Union's GSP plus facility, enhancing market access for local products and services through trade agreements, and diversifying products and markets.

He also suggested exploring any areas of untapped potential due to structural constraints, either at the production level or management if required.

Sharifa Khan, secretary to the industry and energy division of the Planning Commission, Md Humayun Kabir, a former ICAB president, Mostafa Abid Khan, member of Bangladesh Tariff Commission, Ali Hussain Akber Ali, chairman of Bangladesh Steel Re-Rolling Mills, Syed Nasim Manzur, managing director of Apex, and Monzur Ahmed, adviser of the Federation of Bangladesh Chambers of Commerce and Industries, also spoke.