In 1971, the United Nations established the Least Developed Countries (LDC) category to identify nations facing significant barriers to sustainable development. This status provides access to international support measures (ISMs) such as trade preferences, concessional finance, technical assistance, and priority aid allocation. These measures serve as a crucial lifeline for countries dealing with vulnerabilities stemming from factors like geography, climate exposure, fragility, or conflict. The ultimate aim is for countries to “graduate” from LDC status, initiating a transition period to phase out ISMs.
While some LDCs have made progress towards graduation, many remain in a state of stagnation. Despite hosting 12% of the global population and 27% of refugees, these countries contribute less than 2% to global GDP and 1% to world trade. This disparity underscores the limitations of the current graduation model, which fails to address the structural challenges hindering progress for many nations stuck in underdevelopment.
The UN Committee for Development Policy (CDP reviews the LDC list every three years to assess countries’ eligibility for graduation based on three criteria: income level, human assets, and environmental and economic vulnerability. By meeting thresholds in two out of three categories in two consecutive reviews, countries qualify for graduation. Currently, only eight countries have successfully exited the LDC group, while 44 nations remain.
Countries like Bangladesh, Lao PDR, Nepal, Solomon Islands, Cambodia, and Senegal are preparing for graduation with confirmed exit years. However, challenges such as political instability have delayed graduation for countries like Comoros, Myanmar, Djibouti, Kiribati, and Tuvalu. The graduation process has been hindered by various factors, including weak institutions and conflict situations.
The slow progress in graduation is attributed not to the lack of effort on the part of LDCs but to the shortcomings of the current model. The criteria for graduation prioritize short-term economic and social gains while overlooking the impact of conflict, climate risks, remoteness, and peace-and-security challenges. As a result, many countries struggle to move up the development ladder.
To address these issues, a new LDC framework should focus on enhancing countries’ resilience to shocks and fostering sustainable progress despite challenges like conflict, climate exposure, or geographic disadvantages. This updated approach should incorporate a more comprehensive risk and resilience index, promote a holistic approach to resilience, strengthen ISMs, and support domestic reforms to ensure lasting development gains.
Efforts are underway to refine the graduation process, with initiatives like supplementary graduation indicators (SGIs) introduced to provide more flexibility in evaluating country progress. Moving forward, there is a growing recognition of the need to tailor support to the unique vulnerabilities of different LDCs. By reimagining the LDC paradigm to align with current structural, climate, governance, and peace-security challenges, global frameworks can better support the countries striving for sustainable development.