Second LDC Trade Ministers' Meeting
Dhaka, Bangladesh, 31st May - 2nd June 2003
 

The Least Developed Countries

Forty-nine countries are currently designated by the United Nations as "least developed countries" (LDCs). The list is reviewed every three years by the Economic and Social Council (ECOSOC).

The criteria underlying the current list of LDCs are:

   » a low income, as measured by the gross domestic product (GDP) per capita;

   » weak human resources, as measured by a composite index (Augmented Physical Quality of Life Index) based on indicators of life expectancy at birth, per capita calorie intake, combined primary and secondary school enrolment, and adult literacy;

   » a low level of economic diversification, as measured by a composite index (Economic Diversification Index) based on the share of manufacturing in GDP, the share of the labour force in industry, annual per capita commercial energy consumption, and UNCTAD's merchandise export concentration index.

Different thresholds are used for inclusion in, and graduation from, the list. A country qualifies to be added to the list of LDCs if it meets inclusion thresholds on all three criteria. A country qualifies for graduation from the list if it meets graduation thresholds on two of the three criteria. For the low-income criterion, the threshold on which inclusion in the current list is based has been a GDP per capita of $800, and the threshold for graduation has been a GDP per capita of $900. In its July 2000 review, in the light of recommendations by the Committee for Development Policy, ECOSOC declared the eligibility of Senegal for designation as an LDC (subject to the Government so desiring) and decided to postpone until 2001 its consideration of Maldives' graduation.

The criteria for determining the list of LDCs are under review. The Committee for Development Policy has recommended that the Economic Diversification Index be replaced by an Economic Vulnerability Index reflecting the main external shocks to which many low-income countries are subject, and incorporating the main structural elements of the countries' exposure to the shocks, including their smallness and lack of diversification.

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