Criteria for the Least Developed Countries
The recognition of the developmental problem of the poorest countries and the establishment of the LDCs group dates back to 1971, when the United Nations, in its resolution 2768 (XXVI) of 18 November 1971, established the first group of LDCs with 24 countries as its original members.
The three principal criteria used to establish the group were
- per capita GDP of US $ 100 per person in 1968 or less;
- a share of manufacturing in total GDP of 10 per cent or less; and
- an adult literacy rate of 20 per cent or less.
The list of countries as “least developed” is established by the General Assembly on the recommendation of the Economic and Social Council (ECOSOC) and on the advice of the Committee for Development Planning (CDP). The list is reviewed every three years. In 1998 it was decided to reconstitute the Committee on Development Planning as the Committee for Development Policy to continue the triennial review of the status of least developed countries.
The Committee for Development Policy reaffirmed that the least developed country category should include countries with a low per capita income, a low level of human resource development and a high degree of economic vulnerability. The Committee thus bases its identification of the least developed countries on criteria designed to measure three dimensions of a country’s state of development1:
- its income level, measured by gross national income (GNI) per capita;
- its stock of human assets, measured by a human assets index (HAI); and
- its economic vulnerability, measured by an economic vulnerability index (EVI)2.
A country qualifies to be added to the list of LDCs if it meets inclusion thresholds on all three criteria mentioned above. 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 on 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. The most recent review was conducted in April 2001. In 2003 Timor-Leste was added to the list. As of end 2005 fifty countries are designated by the United Nations as the Least Developed Countries (LDCs).
The Committee has drawn attention to the importance of smooth transition measures for graduated countries. As stressed in the report of its fourth session, the Committee considers smooth transition as a principle of paramount importance to the graduating countries, insofar as these countries are likely to remain dependent, to varying degrees, on external support.
1 The Committee has consistently recognized that further improvements could be made to the criteria, particularly when new or more reliable data for individual indicators become available. For example, this was the case with the addition to the EVI of a sixth component, namely: the proportion of people displaced by natural disasters in the 2003 review. Similarly, the 2000 review had included two changes in relation to the human assets criterion (then called the Augmented Physical Quality of Life Index (APQLI)): per capita daily calorie intake was replaced by per capita daily calorie intake as a percentage of daily requirements; and life expectancy at birth was replaced by the under-five child mortality rate.
2 The type of vulnerability to be considered in the identification of the least developed countries is structural vulnerability: the Committee does not consider that vulnerability caused by government policies should be taken into account.