May 16, 2012
VIENTIANE – The first steps in developing a strategy for the country's graduation from Least Developed Country (LDC) status by 2020 have been taken at a two-day workshop, 16 and 17 May.
At the meeting government representatives learned about and discussed the three criteria for graduation and the adjustments to policy and programming that may be necessary following graduation.
The government has set a target of qualification from LDC status by 2020 in its Vision 2020 and has highlighted this goal in its 5-year development plans, including the 7th National Socio Economic Development Plan, 2011 to 2015.
H.E. Dr. Khamlien Pholsena, Vice Minister of Planning and Investment, said that, "Although the Lao economy has developed progressively, some risks still exist. Therefore, a strong understanding of those risks, especially related to graduation criteria, is needed. An objective of the workshop is to help Lao government officials to understand the criteria and graduation threshold clearly, so that we can plan accordingly and ensure that we are on target to achieve our goal."
The UN Resident Coordinator and UNDP Resident Representative, Minh Pham, said that, “Lao PDR is in the unique position of having set a target date for graduation as early as 1996 and only recently has the international community strongly recognized the importance of such forward looking policies. Understanding better the factors that impact on development performance and how to manage these in an integrated manner is especially important in the more volatile and uncertain world in which Lao PDR participates ever more intensely.”
The workshop includes presentations by senior technical advisors from the UN Conference on Trade and Development (UNCTAD), the UN Committee for Development Policy (CDP), and UNDP.
To graduate from LDC status a country must meet two of the three criteria.
- Gross National Income (GNI): A country must meet the minimum GNI threshold set every three years. The 2012 level was US$1,190.
- Human Assets Index: This focuses on social indicators such as nutrition, child mortality, secondary school enrolment and adult literacy. Countries eligible for graduation must be at least 10% above the threshold set.
- The Economic Vulnerability Index: This includes indicators related to the economic structure of a country and its ability to cope with potential ‘economic shocks', such as natural disasters.
The UN Committee for Development Policy (CDP) reviews the LDC list every 3 years, the last review was in March 2012. If a country meets the criteria in two successive reviews then it is eligible for graduation. The UN estimates that at current progress Lao PDR could be eligible for graduation in 2018 and this would be followed by a three year transition period.
There are 48 Least Developed Countries as designated by the United Nations. The LDC category was established in 1971 to address the needs of the world's most vulnerable states. Only three countries have graduated from LDC status since 1971, Botswana, Cape Verde and Maldives.