On 16 March, members of the Committee for Development Policy (CDP) briefed the General Assembly “Ad-hoc Open Ended Working Group to Further Study and Strengthen the Smooth Transition for the Countries Graduating from the Least Developed Country Category ” on the challenges of transitioning from the LDC category.
The briefing was based on the CDP review of the existing smooth transition mechanisms, which identifies how these mechanisms can be further strengthened or improved and better monitored. Countries graduating from the list are understandably concerned about a possible loss of benefits associated with LDC status. Smooth transition mechanisms aim to alleviate the concerns of graduating countries and avoid disruptions and reversal in the progress achieved by these countries.
The LDC category was created due to the recognition of the need to alleviate the problems of underdevelopment of those developing countries that were persistently falling behind as a consequence of structural problems and vulnerabilities. The category was also created to attract special international support measures for helping the least developed among the developing countries to address those problems.
Graduation from the LDC category implies catching up with the rest of developing countries and that LDC‐specific support from the international community may no longer be needed. Graduation does not mean that the need for international support vanishes, but that the nature of the support provided should reflect the developmental progress.
The transition period starts after graduation, which is three years after the General Assembly takes note of a recommendation by the CDP to graduate the concerned country from the list. Within these three years, the graduating country is expected to prepare itself for graduation by preparing a transition strategy in collaboration with its trading and development partners, including the UN system.
One reason for concern is that graduation leads to a discontinuity, because of the binary nature of the LDC category: either you are a LDC, or you are not. However, development is continuous and support needs to evolve accordingly. LDC specific measures become less relevant as a country progresses, but as a developing country, graduated countries still need support. A second reason of concern is the uncertainty faced by graduating countries concerning the support available to them in the future.
LDCs require assurances that they are not ‘left alone’ by the international community after graduation. Therefore, smooth transition mechanisms need to be strengthened by increasing transparency as well as by stronger and more explicit commitments by donors and international organizations. The many recommendations by the CDP include a call to enhance catalogues of LDC support such as the UN LDC portal and proposals to establish clear provisions on phasing-out of LDC-specific trade benefits under bilateral trade agreements and under the WTO.
The impact of graduation on official development assistance could be smoothened if LDC criteria, in particular economic vulnerability would play a larger role in aid allocation. Insurance mechanisms against environmental catastrophes or other external adverse and temporary shocks could be highly relevant for graduated countries. During the meeting, discussion also centered on the need for greater support to graduating countries through dedicated capacity building activities.
Participants also heard that active participation and enhanced collaboration by the relevant UN organizations at the global and national level would help to alleviate some of the difficulties graduating countries experience in preparing for graduation. It was concluded that transition efforts should equal in relevance the measures being withdrawn for the concerned graduating country.
