Several multilateral and regional development organizations dedicate a significant share of their resources to LDCs, even though many do not use the LDC list as such to allocate assistance, and rather apply criteria that are closely correlated to the criteria that define LDCs.
United Nations system. LDCs are a priority for the United Nations system, as reflected in the Addis Ababa Action Agenda, the 2030 Agenda for Sustainable Development and the successive programmes of action for LDCs. Most assistance by UN entities is allocated based on country needs and vulnerabiliities, but the UN has a number of mechanisms and programmes in place to support LDCs individually and as a category (see also UN-OHRLLS, 2021, United Nations Support to the Least Developed Countries (PDF) and information on this portal on individual organizations providing support to LDCs).
Multilateral and regional financial institutions. Eligibility for concessional financing to developing countries by regional and multilateral financial institutions is generally based on factors such as GNI per capita and creditworthiness. For example, concessionary financing from the International Development Association (IDA) of the World Bank is granted to all countries below a certain threshold of per capita income ($1,185 in fiscal year 2021) The IMF's various lending instruments are tailored to different types of balance of payments needs and the specific circumstances of its members.
- The Asian Development Bank (ADB) uses LDC status as a secondary criterion in determining, in some cases, the type of assistance the country can receive.
Other organizations provide a large share of their resources to LDCs while not considering whether or not a country is on the LDC list as a factor in resource allocation:
- GAVI, the Vaccine Alliance assists countries below a certain GNI per capita threshold and that meet certain conditions, assessed by an independent group of experts. Beyond this threshold, countries enter a transition phase towards self-financing.
- The Global Fund, which mobilizes and invests funds aiming at ending AIDS, tuberculosis and malaria as epidemics, considers GNI and a disease burden index.
What happens when countries graduate?
Because most multilateral and regional support is not based on whether or not a country is an LDC, a country’s graduation from LDC status does not normally lead to significant changes in the terms or volume of assistance by these institutions, with the exception of LDC-specific mechanisms. However in a similar timeframe to that of LDC graduation, countries may be crossing other thresholds such as the ones that are, in fact, considered by these institutions. It is important to plan for these “multiple graduations” but also to clearly distinguish between the impacts of graduation from the LDC category from the impacts of meeting other criteria considered by these institutions. Several organizations are committed to supporting countries through a “smooth transition” out of the category.
