From Africa Recovery, Vol.12#2 (November 1998), Watch page

LDCs
Cape Verde may 'graduate' from list of poorest nations

Cape Verde, along with the Maldives, Samoa and Vanuatu, may be removed from the UN's list of the world's 48 poorest nations by the year 2000. The UN Committee for Development Planning recommended that these four states should be categorized as developing countries instead of least developed countries (LDCs) because of increases in per capita income and other signs of improved economic performance. Before it can take effect, the recommendation must be acted on by the 185-member UN General Assembly.

But the four countries are reluctant to leave the category of the "poorest of the poor," since LDC status confers certain privileges and concessions such as a higher proportion of grants and debt cancellation.

The four LDCs want the UN to defer its decision until their special status as fragile, tiny economies is fully evaluated. Per capita income, one of the determining indicators used in categorizing LDCs, is not always an accurate means of gauging economic performance, they argue. Because per capita income simply divides a country's national income by its population, this economic indicator can make small states appear wealthier than they really are.

Along with several other small developing states, the four countries are urging the introduction of a "vulnerability index" that would provide a more accurate indicator of a country's economic status. Taking into account the economic impact of factors such as a propensity for natural disasters, fragile national assets in risk of depletion or destruction, and dependence on the production of one or a few crops, this index would be a fairer determinant of development status, they say.

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