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Least Developed Countries:
Criteria for Identification and Graduation of LDCs
 
The Committee for Development Policy (CDP), a subsidiary body of the UN Economic and Social Council, is – inter alia - mandated to review the category of LDCs every 3 years and monitor their progress after graduation from the category.
 
The identification of LDCs is currently based on three criteria: per capita gross national income (GNI), human assets and economic vulnerability to external shocks. The latter two are measured by two indices of structural impediments, namely the human assets index and the economic vulnerability index.
 
1)      Low-income criterion, based on a three-year average estimate of GNI per capita, based on the World Bank Atlas method (under $905 for inclusion, above $ 1,086 for graduation as applied in the 2009 triennial review).
2)      Human Assets Index (HAI) based on indicators of: (a) nutrition: percentage of population undernourished; (b) health: mortality rate for children aged five years or under; (c) education: the gross secondary school enrolment ratio; and (d) adult literacy rate.
3)      Economic Vulnerability Index (EVI) based on indicators of: (a) population size; (b) remoteness; (c) merchandise export concentration; (d) share of agriculture, forestry and fisheries in gross domestic product; (e) share of population living in low elevated coastal zones; (f) instability of exports of goods and services; (g) victims of natural disasters; and (h) instability of agricultural production.      
 
To be included in the list of LDCs, a country must satisfy all three criteria. In addition, since the fundamental meaning of the LDC category, i.e. the recognition of structural handicaps, excludes large economies, the population must not exceed 75 million.
 
To become eligible for graduation, a country must reach threshold levels for graduation for at least two of the aforementioned three criteria, or its GNI per capita must exceed at least twice the threshold level, and the likelihood that the level of GNI per capita is sustainable must be deemed high. To be recommended for graduation, a country must be found eligible at two successive triennial reviews by the CDP.
 
At the 2009 triennial review of the list, the CDP recommended that Equatorial Guinea be graduated from the list of LDCs, owing to its high level of GNI per capita. Tuvalu and Vanuatu were considered eligible but not recommended for graduation due to doubts about the sustainability of their progress. Kiribati which had met the criteria for the first time in the 2006 review was no longer found eligible. Samoa and Maldives, which were scheduled for graduation in December 2010 and January 2011 respectively, were found to have shown continued positive development progress. However, due to the devastating tsunami that hit the island in 2009, it was decided to postpone Samoa's graduation (initially scheduled for December 2010) to 1 January 2014.
 
The only three countries to have graduated out of the LDC category so far are Botswana, Cape Verde and Maldives. The next triennial review will be undertaken by the CDP in 2012.
 
For further information on criteria for identifying LDCs, click here.
For further information on graduated countries, click here.


 

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