UN LDCs Status

UN LDCs Status

Context: The United Nations General Assembly has adopted a historic resolution to graduate three nations, including Bangladesh and Nepal, from the least developed country (LDC) category to the developing country grouping, a major milestone demonstrating the countries’ significant development progress.

Concept:

The U.N. General Assembly (UNGA) adopted the resolution at its 76th session. The three countries that got clearance for graduation are Bangladesh, Nepal and the Lao People’s Democratic Republic.

The three countries will graduate from the LDC category after an exceptionally extended preparatory period of five years (the standard period is of three years) to enable them to prepare for graduation while planning for a post-COVID-19 recovery and implementing policies and strategies to reverse the economic and social damage incurred by the COVID-19 shock,

Bangladesh is now scheduled to officially become a developing country in 2026 as the U.N. committee recommended that the country should get five years, to prepare for the transition .All the three eligibility criteria for graduation involving per capita income, human assets index (HAI), and economic and environmental vulnerability index (EVI).

Nepal’s inclusion in the LDC status took place in 1971.

LDCs Status

Since 1971, the United Nations has recognized least developed countries (LDCs) as a category of States that are deemed highly disadvantaged in their development process, for structural, historical and also geographical reasons.

LDCs face more than other countries the risk of deeper poverty and remaining in a situation of underdevelopment. More than 75 per cent of the LDCs’ population still live in poverty.

These countries are also characterized by their vulnerability to external economic shocks, natural and man-made disasters and communicable diseases. As such, the LDCs are in need of the highest degree of attention from the international community.

Currently, the 46 LDCs comprise around 880 million people, 12 percent of the world population, which face severe structural impediments to growth. However, the LDCs account for less than 2 percent of world GDP and around 1 percent of world trade.

Four United Nations Conferences on the LDCs were held in: 1981, 1990, 2001 and 2011. The Fourth United Nations Conference on the Least Developed Countries adopted the Programme of Action for the Least Developed Countries for the Decade 2011-2020 – the so-called Istanbul Programme of Action (IPoA).

• LDCs are those that suffer from severe structural impediments to achieve sustainable development.
• Currently, there are 46 countries on the LDC list, according to the U.N. Committee for Development Policy (CDP).
• According to the U.N., per capita income of $1,230 is one of the requirements for transitioning into a developing nation.

Membership is revised every three years based on

1. Per Capita Income (GDP plus net income received from overseas)
2. Human assets (level of population undernourished, under-five mortality rate, gross secondary enrolment ratio and adult literacy rate)
3. Economic vulnerability (such as population, remoteness, merchandise export concentration, natural disasters, instability of agriculture production, and instability of goods and services exports, among other factors).

By periodically identifying LDCs and highlighting their structural problems, the United Nations gives a strong signal to the international community to the need of special concessions in support of LDCs.

Concessions associated with LDC status include benefits in the areas of:

• Development financing, notably grants and loans from donors and financial institutions.
• Multilateral trading system, such as preferential market access and special treatments.
• Technical assistance, notably, toward trade mainstreaming (Enhanced Integrated Framework)

In past, six countries have graduated from LDC status: Botswana in 1994, Cape Verde in 2007, Maldives in 2011, Samoa in 2014, Equatorial Guinea in 2017, and Vanuatu in 2020.

UNCTAD extends to all graduating countries a range of services aimed at supporting their progress toward graduation from LDC status. These include preparing vulnerability profiles of countries with the challenges of graduation, supporting them in their preparation for a smooth transition to post-LDC life.

UNCTAD also assists ex-LDC in their quest for continued socio-economic progress, notably, toward enhanced economic specialization