Opinion: After graduation, ensuring a smooth transition for least developed countries

A morning market in Munda, Solomon Islands. Photo by: Kirsten Abernethy / WorldFish / CC BY-NC-ND

This month in New York marked a significant milestone for some of the world’s least developed countries. The Committee for Development Policy, an advisory body of the United Nations Economic and Social Council, carried out its triennial review of the list of LDCs. The Committee announced that four countries — Bhutan, Kiribati, São Tomé and Príncipe, and Solomon Islands met the criteria for graduation out of the LDC category.

In 2018, the world counts 47 LDCs. They are home to close to 1 billion people, account for less than 2 percent of the world’s gross domestic product, and about 1 percent of global trade in goods. Can we afford to leave 1 billion people behind?

Since the list of LDCs was created in 1971, five countries have graduated: Equatorial Guinea (2017), Botswana (1994), Cabo Verde (2007), Maldives (2011) and Samoa (2014) while Angola is scheduled to graduate in 2021. A further six countries met the graduation criteria this time around. Graduating out of the LDC category is an important milestone and one all of us should celebrate. It means a country and its people have realized major development progress, often overcoming significant hurdles, facing the vagaries of natural disasters, quickly evolving global economic and financial landscapes all in a strive for more prosperous, more inclusive, and sustainable futures.

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While we should rejoice in the considerably increasing community of countries graduating or nearing graduation, significant challenges remain. Average GDP growth for these countries remains low at 3.8 percent in 2015, and this is the lowest growth rate observed in the past two decades. It is certainly well below the 7 percent target set by the Istanbul Programme of Action, the dedicated program of action for LDCs, and Sustainable Development Goal 8 on sustainable economic growth. While foreign direct investment flows to LDCs have increased significantly, we have also seen wide fluctuations: $44 billion in 2015, followed by a decline of 13 percent in 2016 to $38 billion and a further decrease by 11 percent in 2017 to around $33.4 billion.

The exposure to risk of LDCs is often a multiple of that of other developing countries. This speaks, inter alia, to their high levels of vulnerability including through heavy dependence on commodity exports at times of considerable price fluctuations, coupled with their insufficient export diversification. In addition, these are among the countries bearing the burdens of climate change, natural disasters, and epidemics. It makes it more remarkable how LDCs together with their development partners continue to strive for the enabling environments required to make graduation a reality.  

Cognizant of the persistent challenges that remain, it is important to stress that graduation per se may not be a panacea for solving all sustainable development challenges in LDCs. However, it is a significant step in the right direction — but we must pay more attention to what we call “smooth transition.” Graduation is not a light switch with lights on or off. Just as we accompany a country’s own path toward graduation, we must invest in phased graduated LDC-specific support measures for some time after the actual graduation. This ensures that graduation is sustainable and countries can operate in a buffer zone to prevent them potentially slipping back.

It is highly encouraging that silver linings are visible across LDCs that we must build on. Many countries can point to success stories, be it from Bangladesh’s role in sharing best practice with other countries in the fight against cholera to Ethiopia’s increase in agricultural productivity due to public investments in irrigation, transport, and energy sectors. LDCs are also making inroads in such areas as information and telecommunication technologies. We recently co-launched a report with the International Telecommunication Union which illustrates that LDCs are on target to achieve universal and affordable internet by 2020. This will open new commerce opportunities, new ways to include people, and provide for better skills training for youth.  

We are also seeing major progress on the sustainable energy front. LDCs are pushing ahead with innovative, locally responsive renewable energy, and energy efficiency initiatives. We hope to highlight and share this progress through the LDC journalists currently taking part in the “Voices of a Brighter Future” competition. Also, the science, technology, and innovation base in LDCs is expected to receive a boost with the establishment of a new U.N. entity: The Technology Bank for LDCs based in Gebze, Turkey. The bank is designed to improve the utilization of scientific and technological solutions in LDCs including through improving technology-related policies, capacity building, and facilitating access to appropriate technologies.

Coming out of last week’s CDP meeting, one of the countries that has met the graduation criteria for the first time is Bangladesh. In meeting with Bangladesh’s Prime Minister Sheikh Hasina Wazed last year, we discussed what it took to get to the country’s steady path toward graduation. It was clear that a vision, national leadership, and sound policy with requisite institutional and implementation capacity are key ingredients in moving forward. The country’s Vision 2021 national strategy consistently guides Bangladesh’s development priorities, including the many steps and building blocks for now moving on the path to becoming a middle-income country.  

Successfully graduated countries have demonstrated how critical nationally owned and driven comprehensive strategies are when adjusting to the phasing out of LDC benefits previously obtained. Successful, and that means sustainable graduation, does create new sets of opportunities last not least as it shifts perceptions including increased trust in more stable, predictable, and overall conducive business environments and enhanced creditworthiness.

We still have a long way to go. But now is not the time to drop the proverbial ball. Let us remain responsive to the development and “smooth transition” needs of LDCs. Let us invest in continued robust support from the international community to foster the conditions for graduation. The challenge truly is to leave no one behind.

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About the author

  • Usg%2520bio

    Fekitamoeloa Katoa ‘Utoikamanu

    Fekitamoeloa Katoa ‘Utoikamanu, a Tongan national, took up her appointment as the High Representative for the Least Developed Countries, Landlocked Developing Countries and Small Island Developing States in May 2017. Prior to taking up her position with the United Nations, she was the chief executive officer of the Ministry of Tourism in Tonga.