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Navigating Development

An in-depth look at the criteria, challenges, and pathways to progress for nations at the forefront of global development efforts.

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Introduction

Defining the Least Developed

The term "Least Developed Countries" (LDCs) refers to a specific category of developing nations identified by the United Nations. These countries exhibit the most profound indicators of socioeconomic underdevelopment, characterized by low income, significant human resource weaknesses, and high economic vulnerability. The concept was formally established in the late 1960s, with the first official list of LDCs being compiled and recognized by the UN in its resolution 2768 (XXVI) on November 18, 1971.[1]

Global Recognition and Support

The classification of LDCs is not merely an academic exercise; it serves as a critical framework for international cooperation and support. The World Trade Organization (WTO), for instance, formally acknowledges the UN's LDC list. This recognition facilitates the implementation of specific measures designed to assist these nations in integrating more effectively into the global economy. Such initiatives aim to enhance LDCs' export capabilities and attract foreign investment, fostering economic growth and diversification.[5]

Pathways to Progress

The ultimate objective of the LDC classification is to support these countries in achieving sustainable development and eventually "graduating" from the category. As of December 2024, 44 countries remain classified as LDCs, while eight nations have successfully transitioned out of this status between 1994 and 2024, demonstrating that progress, though challenging, is achievable through concerted national and international efforts.[4]

Identification Criteria

Poverty Threshold (GNI)

A primary criterion for LDC classification is a low Gross National Income (GNI) per capita, averaged over three years. This indicator reflects the overall economic output and living standards within a country. As of 2018, a country must have a GNI per capita below US$1,025 to be included in the LDC list. To graduate from this status, a country's GNI per capita must exceed US$1,230.[2] This threshold ensures that only nations with the most significant economic challenges are categorized as LDCs.

Human Resource Weakness

This criterion assesses the level of human capital development, which is crucial for long-term growth and societal well-being. It is evaluated based on a composite index that includes indicators related to:

  • Nutrition: Reflecting food security and health outcomes.
  • Health: Measuring access to healthcare and overall population health.
  • Education: Assessing enrollment rates and educational attainment.
  • Adult Literacy: Indicating the foundational skills of the adult population.
A country demonstrating significant deficiencies across these areas is considered to have human resource weakness, hindering its developmental potential.[2]

Economic Vulnerability

The Economic Vulnerability Index (EVI) measures a country's susceptibility to external shocks and structural handicaps. This index considers several factors:

  • Instability of Agricultural Production: Susceptibility to climate shocks and natural disasters affecting food supply.
  • Instability of Exports of Goods and Services: Dependence on a narrow range of exports, making the economy vulnerable to price fluctuations.
  • Economic Importance of Non-Traditional Activities: Limited diversification beyond primary sectors.
  • Merchandise Export Concentration: High reliance on a few export products.
  • Handicap of Economic Smallness: Challenges faced by small economies in achieving economies of scale.
  • Percentage of Population Displaced by Natural Disasters: High exposure and limited resilience to environmental hazards.[2]

Review and Graduation

The LDC criteria are rigorously reviewed every three years by the Committee for Development Policy (CDP), a subsidiary body of the UN Economic and Social Council (ECOSOC). For a country to be recommended for removal from the LDC list (i.e., "graduate"), its indicators must consistently exceed the established thresholds in at least two consecutive triennial reviews.[6] This stringent process ensures that graduation is based on sustained progress and not temporary improvements. The United Nations Office of the High Representative for the Least Developed Countries, Landlocked Developing Countries and Small Island Developing States (UN-OHRLLS) plays a crucial role in coordinating UN support and advocating for LDCs.

UN Conferences

Decadal Global Summits

The United Nations has convened five major conferences specifically dedicated to addressing the unique challenges faced by LDCs, held approximately every ten years. These global summits bring together heads of state, policymakers, and development experts to formulate strategies and commitments for supporting LDC development. The first two conferences took place in Paris in 1981 and 1991, followed by the third in Brussels in 2001.[11]

LDC-IV: Ambitious Goals

The Fourth UN Conference on Least Developed Countries (LDC-IV), held in Istanbul, Turkey, from May 9–13, 2011, was a landmark event. Attended by high-level representatives, including then-UN head Ban Ki-moon and nearly 50 prime ministers and heads of state, the conference endorsed an ambitious goal: to facilitate the graduation of at least half of the existing LDCs from the category within the subsequent ten years.[7] A significant emphasis was placed on bolstering productive capabilities and physical infrastructure, with a notable focus on the role of the private sector in driving development, a point that garnered mixed reactions from various non-governmental organizations.[7][11]

LDC-V: A Split Approach

The most recent global gathering, the Fifth UN Conference on Least Developed Countries (LDC-V), adopted a unique two-part structure. The initial segment was held at the UN Headquarters in New York on March 17, 2022, followed by the main conference in Doha from March 5–9, 2023.[12] This bifurcated approach allowed for preparatory discussions and high-level commitments to be made before the comprehensive review and action plan formulation in Doha.

Global Trade

Trade Regulations and Development

Global trade regulations significantly impact LDCs, and these issues have received considerable attention, particularly during the World Trade Organization's (WTO) Doha Round of negotiations, which was explicitly termed a "development round." The aim was to create a more equitable trading system that would benefit developing nations. However, the round ultimately collapsed, highlighting the complexities and disagreements surrounding trade policies for the world's poorest countries.[13]

Challenges in Market Access

During the WTO's Hong Kong Ministerial Conference, an agreement was reached in principle to grant LDCs 100 percent duty-free, quota-free access to U.S. markets, contingent on the completion of the Doha Round. However, analyses by various non-governmental organizations (NGOs) revealed substantial loopholes in the proposed deal. These loopholes raised concerns that the offer might not translate into full market access and could even diminish some existing duty-free access for LDCs to wealthier country markets, leading to calls for a revision of the Hong Kong agreement.[13][14]

Advocacy and Initiatives

Key figures and initiatives have championed the cause of LDCs in global trade. Chiedu Osakwe, appointed as the WTO Special Coordinator for the Least Developed Countries in 1999, worked extensively with other agencies within the Integrated Framework of action for LDCs. His efforts focused on improving market access, ensuring special and differential treatment provisions, enhancing LDC participation in the multilateral trading system, and addressing development concerns related to competition policy.[15][16] Furthermore, at the 28th G8 summit in Kananaskis, Canada, Prime Minister Jean Chrétien proposed the "Market Access Initiative," advocating for "trade-not-aid" to empower LDCs.[17] The United Nations Sustainable Development Goal 14 also specifically calls for effective special and differential treatment for LDCs as an integral part of WTO fisheries subsidies negotiations.[18]

Market Preferences

European Union & Switzerland

Several developed nations and economic blocs offer preferential market access to goods originating from LDCs, aiming to boost their export capabilities and foster economic growth. The European Union, for instance, operates the "Everything but Arms" (EBA) scheme, which grants duty-free and quota-free access to all products (except arms and ammunition) from LDCs. Similarly, Switzerland provides free access to its market for all products from LDCs, demonstrating a commitment to supporting these economies through trade facilitation.[19]

Japan's Open Market

Japan also extends free market access to products from Least Developed Countries. This policy allows goods from LDCs to enter the Japanese market without tariffs, providing a significant advantage for their nascent industries and agricultural sectors. Such preferential treatment is vital for LDCs to compete on the global stage and diversify their economies beyond primary commodities.[20]

China's Zero-Tariff Initiative

Effective December 1, 2024, China implemented a significant policy change, eliminating tariffs for goods imported from all countries categorized by the United Nations as least developed, provided China maintains diplomatic relations with them. This initiative encompasses 33 African nations and several non-African countries, including Afghanistan, Bangladesh, Cambodia, East Timor, Kiribati, Laos, Myanmar, Nepal, Solomon Islands, and Yemen. This move is expected to sharpen China's edge in global trade relations and provide a substantial boost to the economies of these LDCs.[21]

Current LDCs

Global Distribution (Dec 2024)

As of December 2024, the United Nations lists 44 countries as Least Developed Countries. These nations are distributed across four continents or regions, reflecting diverse geographical and geopolitical contexts, yet sharing common developmental challenges.[22]

Africa (32 Countries):

  • Angola
  • Benin
  • Burkina Faso (Landlocked)
  • Burundi (Landlocked)
  • Central African Republic (Landlocked)
  • Chad (Landlocked)
  • Comoros (Small Island Developing State)
  • Democratic Republic of the Congo
  • Djibouti
  • Eritrea
  • Ethiopia (Landlocked)
  • The Gambia
  • Guinea
  • Guinea-Bissau (Small Island Developing State)
  • Lesotho (Landlocked)
  • Liberia
  • Madagascar
  • Malawi (Landlocked)
  • Mali (Landlocked)
  • Mauritania
  • Mozambique
  • Niger (Landlocked)
  • Rwanda (Landlocked)
  • Senegal
  • Sierra Leone
  • Somalia
  • South Sudan (Landlocked)
  • Sudan
  • Tanzania
  • Togo
  • Uganda (Landlocked)
  • Zambia (Landlocked)

Americas (1 Country):

  • Haiti (Small Island Developing State)

Asia (8 Countries):

  • Afghanistan (Landlocked)
  • Bangladesh
  • Cambodia
  • Laos (Landlocked)
  • Myanmar
  • Nepal (Landlocked)
  • Timor-Leste (Small Island Developing State)
  • Yemen

Oceania (3 Countries):

  • Kiribati (Small Island Developing State)
  • Solomon Islands (Small Island Developing State)
  • Tuvalu (Small Island Developing State)

Graduated Nations

The Path to Graduation

Graduation from the LDC category signifies a country's sustained progress in socioeconomic development, meeting specific thresholds for GNI per capita, human assets, and economic vulnerability. The Committee for Development Policy (CDP) meticulously assesses these criteria every three years. For a country to be recommended for graduation, it must satisfy at least two of the three criteria in two consecutive triennial reviews. These recommendations are then submitted to the Economic and Social Council (ECOSOC) for endorsement, marking a significant milestone in a nation's development journey.[27]

Historical Graduates

Since the inception of the LDC category, eight countries have successfully graduated to "developing country" status, demonstrating the effectiveness of targeted development efforts and international support. These nations serve as examples of what can be achieved through sustained growth and policy implementation:

  • Botswana: Graduated in December 1994, becoming the first country to exit the LDC list.[36]
  • Cape Verde: Graduated in December 2007.[28]
  • Maldives: Graduated in January 2011.[36]
  • Samoa: Graduated in January 2014.[6][29]
  • Equatorial Guinea: Graduated in June 2017.[30]
  • Vanuatu: Graduated in December 2020.[31]
  • Bhutan: Graduated in December 2023.[32][39]
  • São Tomé and Príncipe: Graduated in December 2024.[33]

Additionally, Sikkim was delisted when it became a state within the Republic of India in 1975.[34][35]

Countries Declining Inclusion

Interestingly, some countries that met the criteria for LDC status at various points chose not to be included in the index. This decision often stemmed from questions regarding the validity or accuracy of the Committee for Development Policy's data or a preference to manage their development trajectory independently. Notable examples include Ghana (which no longer met the criteria as of 1994), Papua New Guinea (no longer met criteria as of 2009), and Zimbabwe, all of whom previously qualified but declined formal LDC designation.[9]

Future Outlook

Approaching Graduation

Several Least Developed Countries are currently on a trajectory towards graduation, having met the necessary criteria in recent reviews. Their progress is closely monitored, and their eventual transition out of the LDC category is anticipated to occur in the coming years, marking significant achievements in their national development strategies. The preparatory period for graduation is crucial for ensuring a smooth transition and avoiding any abrupt loss of international support measures.

  • Bangladesh: Met criteria in 2018 and 2021. Official graduation is set for November 2026, with a two-year extension granted due to the economic impacts of the COVID-19 pandemic.[40]
  • Laos: Expected to graduate in November 2026.[41]
  • Nepal: Also slated for graduation in November 2026. Its graduation was initially expected in 2018, then postponed to 2021, and further extended by five years.[41][42]
  • Solomon Islands: Expected to graduate in December 2027.[43]
  • Cambodia: Met criteria in 2021 and is expected to graduate in December 2029, a postponement from an earlier 2027 projection to ensure a smooth transition.[44]
  • Senegal: Expected to graduate in December 2029.[45]

Ongoing Review & Postponements

The process of LDC graduation is dynamic, with ongoing reviews and, at times, postponements based on evolving economic conditions and national requests. Several countries are under active consideration or have had their graduation timelines adjusted:

  • Djibouti, Kiribati, and Tuvalu: Could potentially graduate from LDC status as early as 2027.[43]
  • Comoros and Myanmar: Have met the graduation criteria at least twice and could be recommended for graduation in 2027.[43]
  • Rwanda, Uganda, and Tanzania: Met the graduation criteria for the first time in 2024, indicating they could be recommended for graduation in 2027, subject to further review.[46][47][48]
  • Angola: Was initially expected to graduate in 2021, but its preparatory period was extended by three years due to economic difficulties and commodity dependence. Graduation was further postponed in December 2023, without a specific new timeline.[49][50]
  • Zambia and Timor-Leste: While they met the graduation criteria in the past, they no longer qualify for graduation based on current assessments.[43]

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References

References

  1.  World Trade Organization, "Moore announces key appointments for development issues", 1999 Press Releases, Press/136, 13 September 1999
  2.  UN List of Least Developed Countries (as of 13 December 2024)
  3.  Also a landlocked developing country
  4.  Also a Small Island Developing State
A full list of references for this article are available at the Least developed countries Wikipedia page

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