The graduation of two additional South Asian countries, Nepal and Bangladesh, into the category of “developing countries” is a significant step forward for these two nations. The UN General Assembly’s acceptance of the Economic and Social Council’s Committee on Development’s recommendation that these two countries (and Laos), previously classified as Least Developed Countries, meet the criteria to be classified as “developing” countries is a measure of their policies’ success in achieving some development goals.
The requirements this year were a per capita Gross National Income of $1,018 or more, a high score of 60 on the Human Assets Index, which includes a health index and an education index, and a low score of 36 on the Economic & Environmental Vulnerability Index. To be considered for membership in the developing countries category, a country must meet at least two of the requirements. The criteria for “graduation” are more stringent.
The change in classification, on the other hand, is a double-edged sword. It could cause a country’s growth to be disrupted since the very enablers that have helped it get this far are no longer available. An LDC receives trade concessions like market access, development assistance, technical help, and special avenues to participate in international processes. Graduating countries are allowed a transition period during which most of the benefits offered to LDCs remain available to graduating countries, in recognition of the fact that abruptly eliminating such assistance might plunge the country back into LDC status. Normally, the transition period is three years, but in light of the economic, social, and other disruptions caused by Covid-9, the UN General Assembly made the correct decision to extend it to five years.
The LDC category, created and formally supported at the United Nations’ 26th session in 1971, recognizes that some nations have structural growth hurdles and that it is the international community’s obligation to guarantee that these countries do not fall behind. It is not recognized as often as it should be because an improvement in a country’s economic and social prospects can only benefit other countries, particularly those in its immediate vicinity. The stabilization of India’s population growth, the inclusion of Nepal and Bangladesh for graduation as developing countries, and the scheduled graduation of Bhutan in 2023 are all positive developments for a region that has experienced two major shocks this year in Afghanistan and Myanmar, both LDCs.