Former Bangladesh Bank governor Atiur Rahman emphasized on Sunday that the government should continue providing cash incentives for the export and remittance sectors until macroeconomic stability is achieved in the country.

Speaking at a luncheon meeting organised by the American Chamber of Commerce in Bangladesh at the Sheraton Hotel in Dhaka, the economist stressed the importance of sustained support for these sectors to ensure Bangladesh’s smooth transition from a least developed country to a developing one.

‘The government should not discontinue the support to the export sector and remittance earners. Instead, incentives should be increased to facilitate this crucial transition, he stated.

He also noted that some economists are complacent about Bangladesh’s success in remittance and export earnings and advocate for withdrawing government support, a stance he strongly disagrees with.

During the event, Atiur presented a keynote paper titled ‘Post LDC Graduation: Opportunities, Challenges, and the Way Forward.’

He highlighted that Bangladesh would face stringent Rules of Origin requirements upon graduation and that the pharmaceutical sector would need to comply with Trade-Related Intellectual Property Rights obligations.

He warned that after LDC graduation, merchandise exports would lose preferential market access, potentially causing a 7-14 percent reduction in baseline export levels.

To mitigate these challenges, he recommended stabilizing the exchange rate, containing inflation, promoting export diversification, and strengthening remittance inflows.

He also emphasized the importance of enhancing financial sector governance and bolstering overall business confidence.

Additionally, Atiur advised ensuring consistency in the capital market and prioritizing human capital development through stronger private sector participation in collaboration with academia and other training providers.

During a panel discussion and the launch of research findings on ‘Development of Labour Conditions in Bangladesh for Sustainable Growth,’ Neeran Ramjuthan, Programme Manager of the ILO Labour Administration and Working Conditions Cluster, highlighted the critical importance of labor rights for Bangladesh post-LDC graduation.

Ramjuthan noted that as Bangladesh progresses, many economic and trade agreements will need renegotiation and reassessment, with an increasing global emphasis on commitments to labor and human rights.

‘We are hopeful and optimistic that the government of Bangladesh will increasingly align the Bangladesh Labour Act with international labor standards,’ he said.

Discussing the minimum wage setting process for Bangladeshi workers, Ramjuthan pointed out that very few of the 44 sectorial minimum wage boards are active, and the five-year review period is too lengthy.

‘Several wage boards have not had discussions for years,’ he remarked, adding that many enterprises and factories, particularly in the RMG sector, have yet to comply with the minimum wage requirements.

John Fay, Commercial Counsellor of the US Embassy in Dhaka, emphasised that labor rights are crucial to the Bangladesh-US trade and investment relationship.

He mentioned that this issue also impacts the potential re-establishment of GSP benefits and the reauthorisation of Development Finance Corporation financing for Bangladesh.

Fay underscored that improving labor rights is a global dialogue, not just a bilateral issue.

Leena Khan, Labor Attaché of the US Embassy in Dhaka, reiterated that labor rights would become increasingly central to the US-Bangladesh trade and investment relationship.

She explained, ‘We now have an 11-point US labor action plan, developed partly in response to the Bangladeshi government’s request for guidance on accessing GSP and Development Finance Corporation benefits in the future.’

Lina noted that the GSP program is currently halted and awaiting reauthorization by the US Congress. Once reauthorized, Bangladesh would need to reapply for these benefits, which were withdrawn in 2013.

Independent University Professor Mamun Habib presented a research paper on labor issues, recommending revisions to wage adjustment policies, clarification of the definition of labor, and the establishment of effective dispute resolution mechanisms.

The event also featured speeches by Labour Ministry Additional Secretary Md Humayun Kabir and AmCham President Syed Ershad Ahmed, among others.