Ways to enhance UNCTAD support to the least developed countries (LDCs) in their quest for sustained economic progress towards thresholds of graduation from LDC status will be discussed at the high-level round table on “A world without LDCs” during UNCTAD 14.
Four countries have graduated from LDC status so far (Botswana in 1994, Cabo Verde in 2007, Maldives in 2011, Samoa in 2014), while 15 of the current 48 LDCs are confirmed or potential graduation cases (see table). This falls short of the United Nations vision of enabling at least half of the LDCs to meet graduation criteria by 2020, in accordance with the Istanbul Programme of Action adopted in 2011. Equatorial Guinea, Vanuatu and Angola are due to lose LDC status in 2017, 2020 and 2021, respectively, while Bhutan, Nepal, Sao Tome and Principe, Solomon Islands and Timor-Leste are currently pre-eligible for graduation and expected to graduate by 2021. By meeting graduation criteria, several of these countries will at the same time advance towards achieving the Sustainable Development Goals.
Identifying the engines of structural progress and drawing from the wealth of UNCTAD expertise
UNCTAD supports the quest of LDCs for structural economic transformation, one of the paramount development objectives of these countries. This implies policies to raise the economy to higher productivity levels and unrelenting efforts to enhance the nation’s human capital and capabilities. Productive capacity-building is the central target of every transformational action.
Examples of structural transformation are visible through the recent economic performance of Bangladesh and Ethiopia, two LDCs with a total population in excess of 270 million people. These two countries have begun to reap the effects of greater economic resilience through diversification into manufacturing and service sectors, and that structural progress is already translating into poverty reduction.
Achieving higher levels of value addition in manufacturing, a common desire of many LDCs, means investment in key productive capacity-building factors such as infrastructure development, human capital development, enhanced use of appropriate technology and promotion of innovation capabilities – four angles of action that call for external support in general, and LDC treatment in particular.
UNCTAD also pays much attention to those LDCs that are too small or remote to achieve structural transformation through industrialization, but have significant opportunities in the area of trade in services. For example, the income-propelling effects of sustainable tourism development stand out in the graduation histories of Cabo Verde, Maldives, Samoa and Vanuatu. The case of Maldives, a post-LDC economy based on fisheries and tourism suggests that structural economic progress towards graduation is as possible for LDCs with strong commodity and services sectors as it is for LDCs with mainly industrial prospects.
The range of UNCTAD services of relevance to the needs of LDCs with a transformational agenda is wide, particularly in policy areas with a direct impact on productive capacities. UNCTAD also offers advisory services to LDCs near graduation, notably to help them secure a “smooth transition” to post-LDC life, given the importance to them of not losing LDC benefits in any disruptive or premature manner.
An exchange of views on the most effective way to make UNCTAD expertise available to all LDCs is the main objective of the Nairobi round table event. UNCTAD is committed to promote “a vibrant nexus of development partnership for the least developed countries”, according to UNCTAD Secretary-General Mukhisa Kituyi. Dr. Kituyi has explained that UNCTAD is not only a major provider of services to these countries, but also a catalyst for bringing in other key development partners, particularly those with a known agenda for actively supporting productive capacity-building efforts.
Former LDCs and LDCs meeting graduation criteria
- Botswana (graduated in 1994)
- Cabo Verde (graduated in 2007)
- Maldives (graduated in 2011)
- Samoa (graduated in 2014)
- Equatorial Guinea (to graduate in June 2017)
- Vanuatu (to graduate in December 2020)
- Angola (to graduate in February 2021)
- Kiribati (potential graduation case under review)
- Tuvalu (potential graduation case under review)
- Bhutan (likely to graduate late 2021)
- Nepal (likely to graduate late 2021)
- Sao Tome and Principe (likely to graduate late 2021)
- Solomon Islands (likely to graduate late 2021)
- Timor-Leste (likely to graduate late 2021)
LDCs not yet meeting graduation criteria, with prospects for graduation within less than 10 years
- Lao People’s Democratic Republic