Thursday, November 18, 2010

How to graduate from "Least Developed" country status

The United Nations has a list of over 50 states called the "Least Developed Countries". These states are considered the poorest of the poor with a population in total of over 800 million people. A story from the Inter Press Service says that only two countries have graduated from "least developed" status. Only Cape Verde and Botswana have had their economies grow enough to no longer be on the list.

From the IPS, writer Taliff Deen asks how one of these countries can graduate from this least developed designation.

The largest number of countries in the current list is from Africa (33), ranging from Angola and Benin to Uganda and Zambia.

The Asian countries include Afghanistan, Bangladesh, Myanmar, Nepal, Tuvalu and Vanuatu. The only country from Latin America and the Caribbean is Haiti.

Asked if any other LDCs are likely to graduate, at least in the next five years, the Secretary-General of the U.N. Conference on Trade and Development (UNCTAD) Supachai Panitchpakdi told IPS: "Yes, but perhaps not as many as I would like to see graduating."

He said much will depend on the shape and pace of the recovery, which is still very uncertain.

But a return to "business as usual" will not deliver the sustainable and inclusive growth in LDCs that is needed for graduation, he added. "A change of direction in policies, both at the macro and sectoral levels and a new generation of international support measures are needed in the coming years."

These countries, he pointed out, are structurally vulnerable to external shocks and need a carefully crafted sequence of outward-oriented support measures with appropriate flexibilities.

But preferential market access and 'special and differential treatment' (SDTs) alone cannot accelerate development in LDCs.

"What is also needed are general measures that would help increase the resilience of the LDCs to external shocks, which include, among other things, insurance mechanisms, shock- facilities and counter cyclical financing," he noted.

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