Least Developed Countries (LDC)

Bhutan will on 13th December 2023, become the seventh nation to graduate from the United Nations’ (UN) list of Least Developed Countries (LDC).

  • This upgradation is a cause for celebration, however, it also raises some concerns, notably how Bhutan will compensate for the loss of certain trade privileges associated with being an LDC.

About Least Developed Countries (LDC)

  • The LDCs are developing countries listed by the UN that exhibit the lowest indicators of socioeconomic development.
  • The concept first originated in the late 1960s and was codified under UN resolution 2768 passed in November 1971.

The UN identifies three criteria for a country to be classified as an LDC:

  • It must have a gross national income (GNI) per capita below the threshold of USD 1,018 over a three-year average (The graduation threshold is set at 20 per cent above the inclusion threshold which was $ 1,222 in 2021).
  • It must perform poorly on a composite human assets index based on indicators including nutrition, health and education.
  • It must demonstrate economic vulnerability such as being prone to natural disasters and possessing structural economic constraints.

Countries must meet a selection from all three criteria simultaneously and are reviewed on a three-year basis by the UN.

Currently, the UN lists 46 countries that qualify as LDCs. Of those, 33 are from Africa, nine from Asia, three from the Pacific and one from the Caribbean.

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