Bhutan, a small landlocked country in South Asia, has become the seventh nation to graduate from the United Nations’ (UN) list of Least Developed Countries (LDC). This achievement is significant because it means that Bhutan is now considered a middle-income country, having met the criteria for economic development and poverty reduction set by the UN.
Understanding Least Developed Countries (LDCs)
The UN defines LDCs as developing countries that exhibit the lowest indicators of socioeconomic development, including low levels of income, human capital, and economic diversification, high levels of economic vulnerability, and a population that is disproportionately reliant on agriculture, natural resources, and primary commodities. There are currently 46 LDCs, primarily in Africa. The list is reviewed every three years by the UN Economic and Social Council.
Criteria for Graduating from the LDC List
To graduate from the LDC list, a country must meet certain criteria in three areas, including income, human assets, and economic vulnerability. For income, a nation must have a Gross National Income (GNI) per capita of at least USD 1,242 for two consecutive triennial reviews and show that this level of income can be sustained over the long term.
In the case of human assets, the country must improve its human capital by expanding literacy rates, lowering malnutrition rates, and enhancing access to healthcare and education. For economic vulnerability, the country must demonstrate its ability to withstand external economic shocks such as natural disasters or shifts in commodity prices by diversifying its economy, investing in infrastructure, and raising the standard of institutions and governance.
Challenges Faced by LDCs
LDCs face many challenges that hinder their ability to graduate from the LDC list. Poverty is a significant issue, with more than 75% of people living in poverty in these countries. Climate change is also a major concern for LDCs as they have contributed the least to carbon emissions but face some of the highest risks from climate change.
The COVID-19 pandemic has also impacted LDCs, with the fallout predicted to last longer than in richer countries. Debt is another significant problem for LDCs, with four classified as in debt distress and 16 at high risk of debt distress. Additionally, LDCs are vulnerable to external economic shocks, natural and man-made disasters, and communicable diseases.
MCQs on Challenges Faced by Least Developed Countries (LDCs)
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What are the three criteria for a country to be classified as an LDC?
A. Low levels of income, human capital and economic diversification
B. High levels of income, human capital and economic diversification
C. Low levels of income, human capital and economic stability
D. High levels of income, human capital and economic stability
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How many LDCs are there?
A. 46
B. 56
C. 66
D. 76
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What is the income requirement for a nation to graduate from the LDC list?
A. GNI per capita of at least USD 1,242 for two consecutive triennial reviews
B. GNI per capita of at least USD 2,000 for two consecutive triennial reviews
C. GNI per capita of at least USD 1,000 for two consecutive triennial reviews
D. GNI per capita of at least USD 500 for two consecutive triennial reviews
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Which of the following is a challenge faced by LDCs?
A. Climate change
B. High levels of income and economic stability
C. Access to advanced technology
D. Political stability
