Least Developed Countries grow - in numbers

by Thalif Deen

New York, 25 Mar 2001 (IPS) -- When the United Nations Conference on Least Developed Countries gathers at Brussels in May, the numbers of the LDCs would have risen from the current 48 to 49.

The country with the dubious honour of its economy being downgraded would be Senegal; the Republic of Congo and Ghana are not far behind, though.

The 189-member General Assembly will meet in New York shortly to adopt a resolution recommending that Senegal be added to the growing list of LDCs.

The UN’s Committee for Development Policy (CDP), which sits in judgement over which country should or should not be ranked an LDC, has also identified the Republic of Congo and Ghana as meeting the criteria for LDC status.

But since both these African nations have, for now, refused to have their economic status downgraded - from a “developing country” to a “least developed country” - they will not be added to the list of LDCs this year.

The thresholds for inclusion in the list of LDCs are: population of less than 75 million; per capita gross domestic product (GDP) of less than 900 dollars; Augmented Physical Quality of Life Index (combining health, nutrition and education) of less than 59; and an economic vulnerability index (EVI) of less than 36.

A country has to meet all these criteria to be designated an LDC.

The CDP, however, has identified another 16 countries which meet some, but not all, of the criteria: Cameroon, China, Cote d’Ivoire, North Korea, Guyana, Honduras, India, Indonesia, Kenya, Mongolia, Nicaragua, Nigeria, Pakistan, Sri Lanka, Vietnam and Zimbabwe.

If the economies of some of these developing nations continue to deteriorate - prompted mostly by rising debt, falling commodity prices and sharp declines in development aid and foreign investments - the ranks of LDCs will keep swelling over the next decade.

Of the 48 current LDCs, 33 are from Africa. The remaining 15, include nine from Asia, five from the Pacific and one from the Caribbean. The inclusion of Senegal would bring the African total to 34.

When the General Assembly approved the original list back in 1971, there were only 24 LDCs. But since then, the list has doubled - reaching 48 in 1994 - reflecting the worsening economic conditions in Third World nations.

If and when their level of development increases, these countries are expected to “graduate” from LDCs to developing country status. But in the 30-years since LDC ranking began, only one country has improved its economic status - Botswana.

In 1997, the CDP recommended Vanuatu for graduation from LDCs, and identified Cape Verde, Maldives and Samoa as candidates for graduation in 2000. But after a review of the fragile economies of all four countries, the CDP singled out Maldives as the only LDC meeting the criteria for graduation.

But last year the Maldives government challenged the CDP’s assessment arguing that its economy is not only vulnerable to unforeseen factors but also threatened by a possible rise in sea-level. Therefore it refused to be kicked upstairs. A final decision on its graduation is pending.

The May UN Conference on LDCs, scheduled to take place in Brussels, will adopt a Programme of Action aimed at increasing development aid, encouraging the flow of foreign investments, reducing debt and opening up industrial markets for LDC products.

A major goal of the proposed Programme of Action, currently in the process of being finalised, is to pursue the internationally agreed target of reducing poverty by one-half by 2015.

This will require, among other things, significant and steady increases in growth rates in LDCs. To that end, LDCs are expected to strive to attain annual growth rates of five to six percent by 2006 and six to eight percent by the end of the decade.

The LDCs say that this can be achieved only with strong economic and political support from Western donors.

The Brussels conference will be the third in a series, the first one being held in Paris in 1981 and the second one, also in Paris, in 1990.  Both conferences adopted two different Programmes of Action for the improvement of the economies of LDCs.

The May conference is mandated to assess the results of the last Programme of Action during the 1990s at the country level and review the implementation of international support measures, particularly in the areas of official development assistance (ODA), debt, investment and international trade.

The Brussels conference will consider a Plan of Action (now being negotiated in a preparatory committee), formulating appropriate national and international policies and measures for sustainable development of LDCs and their progressive integration into the world economy.

Under its “Everything But Arms” Initiative, the 15-member European Union (EU) decided in February to provide full duty and quota free access to LDC products entering EU nations. The only excption were military exports Also excepted from immediate opening up are three socalled ‘sensitive products’ - Bananas, sugar and rice. Imports of these will remain restricted, bananas till 2006, and sugar and rice till 2009.

In a letter to industrial nations outside the EU, UN Secretary- General Kofi Annan said last month that they should emulate the EU’s initiative and remove all tariff barriers on LDC products in order to improve conditions in the world’s poorest nations.

The letter was addressed to heads of state and government of the United States, Japan, Canada, Norway, Switzerland, Australia and New Zealand.

Reports out of the Ministerial Round-table on LDCs, organnized in London by the UK Development Cooperation Minister, suggests that the EC is trying to use its preferences to get LDC support for the new rund with new issues (incnluding investment rules) that the EC is keen to launch.