NEW YORK — In 1971 the General Assembly gathered a list of the world’s Least Developed Countries, or LDCs. Since then the UN has used that list to more easily direct aid and support to where it is needed most. However, as the years tumble on and new research is published, the list of LDCs has proven to be less effective than once expected. There are at least four reasons for the ineffectiveness of the LDC designation:
1. The graduation standards of LDCs don’t necessitate dispersed wealth.
Although the United Nations Office of the High Representative for LDCs points to several criteria, including per capita income, human assets and economic vulnerability, all of which must be satisfied for designation as an LDC, graduation from the list depends primarily upon per capita income.
In the UN’s 2011 Istanbul Programme of Action a goal was set to graduate 50 percent of the 48 LDCs by the year 2020. Of the 48 LDCs, 34 are African countries, and of those 34 African countries only two are expected to graduate on time. Graduation of these two countries is contingent only upon their respective Gross National Income Per Capita, or per capita income.
The problem is that per capita income is based upon an average measure of wealth that does not account for outliers. Whether a country’s wealth is evenly distributed or resides with 10 or even just one percent of the population is not recognizable in an averaging of per capita income.
2. Once graduated, former-LDCs might suffer reduced aid.
Upon graduation some support, such as trade preferences, and official development assistance for financing and technical cooperation, is cut.
According to Gyan Chandra Acharya, the Under-Secretary-General and High Representative for LDCs, “the path towards graduation should not be an end in itself but should be viewed as a launching pad towards meaningful and transformative changed in the economic structures and the life conditions of people in graduated and graduating LDCs.”
Officials have made efforts to abate any difficulty upon graduation as they continue to discover new ways to make the transition off the list smoother. It should be mentioned, however, that the UN has not really had much practice transitioning countries off the list since only four have graduated throughout its 44 year history.
3. The poorest regions don’t always correspond to the poorest countries.
Researchers at the Oxford Poverty and Human Development Initiative recently found that 60 percent of people in the poorest regions do not actually live in a LDC country. For example, people suffering in the poorest regions of India do not receive the same support that people in an LDC country receive even if they fulfill each criteria for LDC designation.
A new measure of poverty called the Multi-dimensional Poverty Index, or MPI, allowed the Oxford researchers to uncover this inconsistency. The MPI uses 10 needs that fall under three categories, health, education, and living standards, to define poverty.
Researchers assert that the MPI provides a more comprehensive measurement that can be used to assess who requires aid and what kind of aid they require.
4. The World Bank doesn’t acknowledge LDCs.
The World Bank is one of the globe’s largest development assistance providers, but does not focus its support based on LDC designation.
Although this fact is initially problematic, it requires a more nuanced explanation than the first three issues.
The World Bank’s refusal to acknowledge LDCs is problematic only in as far as the list of LDCs is efficacious in alleviating poverty. To be more clear, if LDCs are a good way to make directing aid easier, as UN officials purport, then it’s a shame that the World Bank does not use the list in order to expedite its support processes.
On the other hand, if the issues one, two, and three as listed above are correct, then its actually a good thing that the World Bank doesn’t acknowledge LDCs since its efforts will not be immured by dubious graduation standards and unrecognized region-country inconsistencies.
The Bright Side
The LDC may have its problems, but all is not lost. The list does provide a well-intentioned standard to bring attention to the world’s poorest nations, which is still important despite the distinction made between region and country. As more research is published, standards to measure and recognize where the most aid is needed will only get better so that the ultimate goal of eliminating poverty will become attainable in the near future.
– Jarad Sassone-McHugh