16/06/2026
An interesting policy debate as a part of the 7th Bangladesh Economics Summit (BES) was hosted by The Economics Study Center (ESC) The motion of the debate was on the future of trade policies of Bangladesh after LDC graduation, titled "This House Believes after Graduating from LDC, Bangladesh Should Reduce Protectionist Trade Policies and Fully Liberalize Trade". The policy debate had been moderated by Nazmul Hossain Avi, Labour Economist for Cornell University, ILR, GLI Research Projects in South Asia, and Dr. Kazi Maruful Islam, Professor of Development Studies.
As Bangladesh is soon about to graduate from Least Developed Countries (LDC), it is a stimulating topic as to whether Bangladesh should change its trade policies or not. The opening government team was represented by Sami Mohammad, Department of Economics, University of Dhaka, and Riyadus Salehin Jawad, Department of Economics, University of Dhaka. The closing government party was represented by Ragib Anjum, Department of World Religions and Culture, University of Dhaka, and Tahmid Al Muddasir Chowdhury, Department of World Religions and Culture, University of Dhaka.
The opening opposition party was represented by Tahmid Hossain, Department of Theoretical Physics, University of Dhaka and Afia Ibnat Suchi, Department of International Relations, University of Dhaka. The closing opposition party was Suprova Suvha Zaman, Department of Economics, University of Dhaka, and Md. Hamim Islam, Department of Economics, University of Dhaka.
The opening government party introduced the position that LDC graduation would mean losing tariff-free exports to the west, resulting in a loss of 14% of the market for garments. They established that losses of trade access, geopolitical and economic freedom, and stagnation of the domestic economy are at stake after graduation. Therefore, they proposed that the government should liberalise the economy in a “phased rollout system” where the most at-risk sectors transition first in order to fix the domestic balance of trade vulnerability.
Further, they pointed out that the fundamental problem for Bangladesh is its balance of payments deficit, reliance on IMF loans using a comparison to Sri Lanka’s structural adjustment periods, and how Bangladesh did in fact use protectionist policies as a result of these structural adjustments. They explained that liberalisation is essential as foreign firms would create technological advancement in the market. Furthermore, a huge reason why protectionism would fail is due to rent-seeking institutions remaining powerful. Therefore, LDC graduation is the ideal moment to liberalise as politicians would be pressured to diversify the economy and reduce structural unemployment.
The opening opposition party characterised the country’s economic history, where from the 1980s onwards, the government did not really function in a protectionist model but in fact benefited from LDC exemptions on tariffs and copyright laws to achieve FDI and export prosperity. Moreover, they explained that the Bangladesh labour market is made up of skilled workers who are largely unemployed, and consumers and producers are both dependent on imports for products, most importantly raw materials. Because of this status quo, they proposed a model of investing in domestic industries instead and reducing imports in order to “one day become a developed economy”.
In addition, they explained that protectionist policies are essential to prevent domestic markets from being harmed by unfair foreign competition, and that even “champions of capitalism” like the USA are now moving away from neoliberal policies. The “cycle of dependence” that Bangladesh suffers from has led to exploitation of cheap labour instead. They proposed that Bangladesh must “empower its economic and geopolitical sovereignty”.
The closing half of the debate opened with the government team explaining that industrial oligarchs have not invested in developing domestic industries like tourism, instead shifting wealth abroad. As such, opening our market via liberalisation would mean that FDI would create market booms, using the example of Doi Moi in Vietnam which has led to the manufacturing of Samsung phones being outsourced there. In response to a POI that our workers are half-skilled, which wouldn’t allow interaction with the AI market, they claimed that foreign firms would train labourers with the necessary skills.
The government whip concluded their case with the argument that Bangladesh does in fact have stable industries right now, and the government has no incentive to diversify as long as rent-seeking behaviour is perpetualised. They made the bold claim that a radical policy of complete liberalisation is needed. Though this would allow domestic industries to be destroyed, it would allow job creation. “The Neuralink chips needed for the AI industry can be made either by Bangladesh or Vietnam, and the Bangladeshi government would never invest in this training. Liberalisation would give us that frog leap in the economy."
The final team, closing opposition, began by pointing out that the debate thus far had missed the most crucial explanation of the criteria for LDC graduation - HDI, GNI, and PCI - and how Bangladesh would now need to carry out a “staggered multispeed transition” of the economy to avoid the collapse of domestic industries. They proposed a sustainable 10-year plan focusing on diversification, GSP+ benefits, and protecting specific industries. They illustrated the “diversification death trap” where emerging sectors like pharmacy, which boasts a $200 billion duty-free export market, would be destroyed after LDC graduation without GSP+ protections if liberalised.
Finally, the opposition whip passionately rebutted the government side’s idea of radical policy. “Government proposes a radical policy which would destroy domestic industries. The agriculture industry that they claim to support via protein imports would collapse. The poorest farmer’s child will never be reached by the milk and beef you talk about.” They emphasised a protectionist model that would protect macroeconomic stability by maintaining tariffs and subsidies in industries that need it to grow, such as leather, pharmaceuticals, and SMEs.
After the debate, Dr. Kazi Maruful Islam provided an economist’s analysis of the discussion. “It is very difficult to impose either full liberalisation or full protectionism. The government can’t take decisions purely based on cost-benefit analyses. Even when a decision seems to clearly have a high ROI, politics still plays a huge role.” Moderator Nazmul Hossain Avi shared: “Textbook economics doesn’t always reflect the real world. A big part of wage rises, for example, is collective bargaining agreements. If workers and employers can’t agree on deals, wages become stagnant. I interviewed a garments worker who fainted from heat exhaustion due to overworking. Why would a human being live with such exploitation? The answer is that if other sectors had enough jobs, workers would have bargaining power.”
Dr. Kazi Maruful Islam left the audience with a lasting comment at the end of this insightful policy debate: “What gives me hope, and what I’ll take home from this experience, is that these very debaters will go on to policymaking positions, maybe even become economic ministers themselves. They will take their capacity to engage onto the national and even global stage.”
