Fifth United Nations Conference on the Least Developed Countries,
Thematic Round Table 8 (AM)

Graduation from Least Developed Country Category Must Be Sustainable, Irreversible, Speakers Urge at Final High-Level Round Table of Doha Conference

Pleas for Continued Funding Go Unheeded, Delegates Lament, Stressing Graduated, Graduating Countries Need Country-Specific Support to Address Distinct Challenges

DOHA, 9 March — Stressing that graduation from the least developed countries category must be sustainable and irreversible, speakers warned today that the appeal for continued and innovative financing and support measures “has fallen on deaf ears”, as the fifth United Nations Conference on the Least Developed Countries held the last of its eight high-level thematic round tables.

Opening the meeting on “Supporting Sustainable and Irreversible Graduation from the Least Developed Country Category”, Mariam Chabi Talata Zime Yerima, Vice-President of Benin and co-Chair, called on the international community to explore effective graduation from the category, highlighting that 20 of these countries have been able to achieve the graduation threshold since the adoption of the Istanbul Programme of Action in 2011.  Despite this significant progress, States still fall short of their initial objectives, she said, adding that, currently, almost all least developed countries have embarked on the process to graduate.  She noted that Benin was about to reach the threshold in terms of its gross domestic product (GDP) per capita, with economic growth estimated to be 6 per cent in 2022, with moderate inflation.  The Doha Programme of Action sets forth enhanced coordinated support from the United Nations, but it is necessary to mobilize additional international support to benefit least developed countries, she asserted.

Heidy Rombouts, Vice-Minister for Development Cooperation and Humanitarian Aid of Belgium and fellow Co-Chair, underscored that both graduating and graduated countries need country-specific support to address their distinct challenges.  The Doha Programme of Action aims to enable 15 additional least developed countries to meet the criteria for graduation by 2031.  Thus, it advocates for improving the scope of smooth transition measures for all graduating least developed countries and for providing specific support measures to recently graduated countries for sustainable and irreversible graduation.  Calling on development and trading partners to continue supporting smooth transition strategies, she warned against any abrupt reductions in least-developed-country-specific trade preferences, special and differential treatments, “Aid for Trade” or other technical and financial assistance.  She pointed to the European Union’s “Everything but Arms” initiative which provides trade preferences for 3 years after graduation, further citing specific actions that the international community can take to improve existing support measures that target needs in the areas of trade and productive capacity. 

Delivering the keynote address, Amina J. Mohammed, Deputy Secretary-General of the United Nations, said that, when the least developed country category was created more than 50 years ago, no one thought that it would still be needed today.  In 1971, 25 countries fell into the category; today, there are 46, with only four having graduated since 2011, and 16 on that path.  The Doha Programme of Action sets the aspirational goal of 15 additional countries — many of them in Africa — reaching graduation criteria.  She urged for a stronger graduation process in more challenging conditions — for the second year in a row, no progress has been made on the Sustainable Development Goals.  She cited United Nations Secretary-General António Guterres’ Our Common Agenda report, calling for a “beyond gross domestic product (GDP)” era, and work under way to develop a multidimensional vulnerability index.

Just over half of the population of least developed countries have access to electricity, she noted, with Internet use at 23.5 per cent.  The cost-of-living crisis, disruptions in food, energy and finance markets, and hyperinflation in the developing world — none of this caused by those States — make for a perfect storm.  The situation calls for support in their efforts to:  invest in people; leverage the power of science, technology and innovation; fast-track structural transformation; and enhance participation in international trade.  As the world transitions towards low-carbon economies, she called for enabling least developed countries, including graduating countries, to benefit from the opportunities while avoiding the age-old resource curse — with particular attention to Africa.

As happens with any graduation, she recalled that it is the end of one phase and the beginning of the next.  The Secretary-General’s call for a stimulus includes a three-pronged call to action with debt relief now, as 13 countries are at high risk of debt distress, with 4 already in that situation, and 11 of 25 developing countries currently spending over 20 per cent of Government revenue on debt servicing.  It further calls for ensuring that official development assistance (ODA) commitments are met and the quality improved, along with expanded contingency financing.  She urged for more trading partners to extend trade preferences beyond graduation, like the “Everything but Arms” initiative of the European Union.  The role of the iGRAD — the Sustainable Graduation Support Facility — will be critical in ensuring that resident coordinators and United Nations country teams have the support they need.

The eighth and final thematic round table scheduled for the Conference featured high-level panellists Mário João, Minister of Economy and Planning of Angola; Henry Puna, Secretary General of the Pacific Islands Forum Secretariat; Taffere Tesfachew, Member of the Committee for Development Policy; and Ragnheiður Elín Árnadóttir, Director, Organisation for Economic Co-operation and Development (OECD) Development Centre.

Mr. João affirmed that graduation must not be a supply-driven but a demand-driven process and is not counterproductive to achieving the Sustainable Development Goals.  As a country of concern, Angola lacks a better understanding of climate funds and how to take advantage of the carbon credit market.  The mechanisms of the Global Climate Fund and the Adaptation Fund are in urgent need to better favour the countries “or we will be left behind,” he stressed.  The situation calls for a United Nations system- and developing-partners-integrated and -customized approach to address pre-graduation and post-graduation challenges.  The informal sector in many countries contributes very little to the tax base, while it accounts for almost 80 per cent of the labour force.  He noted his Government, in partnership with the European Union and the United Nations Development Programme (UNDP), is implementing an ambitious programme for the formalization of the informal economy — which formalized more than 250,000 economic operators between 2021 and 2022, and aims for 1 million by 2024.

Mr. Puna, citing recent damaging cyclones hitting Vanuatu and New Zealand, stressed that this is the Pacific reality.  “We are constantly picking up the pieces after these types of disasters, which are now becoming more frequent and severe,” he said, warning that vulnerability will not improve — in fact it will get worse.  Some Forum member countries who have graduated are deeply indebted, because they have had to increase borrowing to recover and rebuild.  He cited Solomon Islands, listed to graduate in 2024, with the two remaining members of Tuvalu and Kiribati still to be considered by the Economic and Social Council for graduation.  Noting the Solomon Islands’ request for deferral of graduation is based on issues including two earthquakes in November 2022, he recalled the “World Risk Report 2022” ranking the country as second at risk to climate change, natural disasters, and global economic and financial shocks.  He called on the United Nations system to support requests for deferral, as well as establishment of a United Nations small island developing States category.

Mr. Tesfachew observed that, currently, there are 16 countries at different stages of graduation while 7 have already graduated.  As the number of least developed countries eligible for graduation increases, the international community is witnessing a new phenomenon:  some graduating countries are becoming anxious that the loss of specific measures will disrupt their development and increase their risk of being locked in “a middle-income trap” — in some cases creating hesitation to graduate.  The appeal of extending international support measures after graduation and the request for additional support measures “has fallen on deaf ears”, he cautioned.  Ensuring smooth landing is vital to their sustainable development.  Moreover, when a country graduates from the least developed country category, the success belongs not only to the country itself, but also to its development partners.  Graduation is a shared objective, he noted, warning against a hasty withdrawal of international support measures.  Moreover, he stressed the importance of facilitating opportunities for South-South cooperation and for ensuring effective participation of graduating countries in enhanced monitoring mechanisms.

Ms. Árnadóttir said that, at this crucial moment in history, least developed countries are struggling with the adverse effects of climate change and trade disruptions.  Highlighting major concerns of these countries, she pointed to the imminent loss of concessional finance and the loss of trade preferences.  For least developed countries, ODA represents about 60 per cent of external financing — mostly in the form of grants and highly concessional loans.  As countries graduate, the amount of support begins to change, which can leave big gaps to fill.  She turned to the situation in Bhutan — a country to graduate at the end of this year — voicing concern over its diversification and productivity.  She stressed the need to mobilize more domestic resources and strengthen foreign direct investment.  Bangladesh is at that turning point, she said, stressing the country’s need to increase innovation and highlighting its commendable effort to be recommended for graduation.  In this context, she called on international partners to provide better policy support, beyond finance.

The round table then turned to its lead discussant, Chee Yoke Ling, Head of the Third World Network, who stressed the need for international financial architecture, calling for radical transformation instead of a slow reform.  Highlighting the issue of debt and unfair trading terms, she supported the proposal of the least developed country group to have an extension to the graduation period.  In view of structural injustices of the global system, she warned against abrupt removal of international support measures, noting that wrong integration into the international supply chain can lead to more injustices.  She underscored that, despite not being responsible for climate change, least developed countries have to battle to preserve the principle of common but differentiated responsibilities.

When the floor opened, speakers emphasized and echoed the warnings that least developed countries are struggling and even backsliding under the burden of multiple crises, and that graduation itself is not a panacea without support to make it sustainable.  A number further called for evolved graduation financial criteria to make the process possible.

Rexon Ramofafia, Minister for National Planning and Development Coordination of the Solomon Islands, noted his country is scheduled to graduate by December 2024.  However, facing complex development challenges including social unrest and natural disasters, Solomon Islands is seeking to delay graduation and extend the preparatory timeframe to properly prepare for a sustainable and irreversible process.

Seve Paeniu, Minister for Finance of Tuvalu, will similarly ask to defer beyond December 2024, advocating for more criteria to reflect the reality of small island developing States — which include cyclones and outbreaks of disease not captured in the Environmental Vulnerability Index.  Voicing concern that graduation will remove concessional finance and allocation of aid, he called for the establishment of a sustainable graduation facility, ensuring smooth and irreversible graduation and continued support for the transition phase.  Innovative financing should include a marine biodiversity positive carbon credit.

Miryan Vieira, Deputy Minister for Foreign Affairs and Cooperation of Cabo Verde, noted that, upon independence in 1975, it was considered an unviable country — but has successfully managed the transition from a least developed country to a low-middle-income country.  However, this has brought great costs to the economy, and she stressed that it is difficult to comprehend why development ambitions are penalized and held back by the high cost of financing and reduction of concessional financing windows.

In her closing remarks, Ms. Rombouts noted that graduation should come with feelings of celebration and pride.  Graduation for least developed countries is about overcoming the structural and inherited challenges of countries on their way to sustainable development.  “It should not be as much about losing advantages but rather about empowerment, emancipation and autonomy,” she declared.  However, graduating countries express concern about their future outside of the group, she said, highlighting the difficulties that result from the loss of important comparative advantages.  Stressing the need for technical and financial support for these countries to graduate, she stressed Belgium’s commitment to support these countries.

Ms. Yerima noted that, despite headway, the graduation objective is still far away, and while implementation of the Doha Programme of Action will advance the Sustainable Development Goals, it will also support the objective of 15 additional least developed countries to satisfy graduation criteria by 2031.  This will call for significant commitments and arduous efforts from the countries, as well as support from development and trade partners.  Graduation must be considered as the beginning of a process requiring as much or more effort required to achieve that level of development.

Also speaking were ministers and representatives of Nepal, Sri Lanka, Lao People’s Democratic Republic, New Zealand, Saudi Arabia, Bangladesh, Burundi, Luxembourg, Bhutan and Brazil.

Representatives of the United Nations Department of Economic and Social Affairs; World Intellectual Property Organization (WIPO); International Trade Centre; Organization of African, Caribbean and Pacific States; and International Anti-Corruption Academy also spoke, as well as representatives of the Fondation pour les études et recherches sur le développement international and the Centre for Peacebuilding and Democracy in Liberia.

For information media. Not an official record.