Multilateral and regional development cooperation

Several multilateral and regional development organizations, including the United Nations system, dedicate a significant share of their resources to LDCs. In 2023, 36 per cent of net disbursements of ODA by multilateral organizations went to LDCs. However, with the exception of LDC-specific mechanisms, most organizations do not rely exclusively on LDC status as a criterion for the allocation of resources, and some do not consider LDC status. Many 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. In 2022, LDCs received 50.7 per cent of total in-country expenditures by the United Nations development system. 

Most assistance by UN entities is allocated based on country needs and vulnerabilities, 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 organizations providing support to LDCs). 

United Nations system entities have put in place institutional mechanisms such as dedicated internal structures and staff; prioritized LDCs under strategic plans; and/or have special rules for budgetary allocations. Regarding the latter:

• UNDP programmatic presence on the ground is financed primarily through core resources  distributed to programme countries based on the target for resource assignment from the core (TRAC) system. TRAC is a three-tiered system in which TRAC-1 and TRAC-2 resources are linked in a combined pool to support country programming, while TRAC-3 resources are made available through a separate pool to support crisis response. The allocation of TRAC-1 and TRAC-2 takes into account a country’s GDP per capita and its population size. By decision of its Executive Board, UNDP has a goal of ensuring the allocation of at least 60 per cent of TRAC-1 and TRAC-2 resources to LDCs. These rules do not cover non-core resources, which often account for a significant share of resources deployed in each country.
• UNICEF is also required by its Executive Board to allocate 60 per cent of its regular resources to LDCs and 50 per cent to countries in sub-Saharan Africa. The resources are allocated based on a system that gives greater weight to countries with the 
  lowest GNI per capita, highest under-5 mortality rate and largest child population. This naturally results in LDCs being the greatest beneficiaries, but also means that graduation itself does not affect the amount of resources allocated to a country.
• Specific instruments managed or co-managed by United Nations system entities have provisions for LDCs. See, for example, the rules for allocation of resources administered by the GEF under the rules for the 8th replenishment period (GEF-8, 2022-2026).
• Following a similar system, the programming guidelines of the Global Biodiversity Framework Fund establish that 36% of its resources, plus an additional 3% initially (to be reprogrammed after 3 years in case of non-use), are to be allocated to LDCs and SIDS. The Fund's distribution also reflects the potential global environmental benefits that can be generated in the country, in line with the country distribution of GEF-8 biodiversity focal areas.

Several organizations provide substantial support to LDCs, including policy analysis and information services, capacity building, assistance with access to information and resources, and advocacy services. These forms of support are not always substantially reflected in expenditures. Here are some examples:

• The Department of Economic and Social Affairs (DESA), the Economic and Social Commission for Asia and the Pacific, the United Nations Conference on Trade and Development (UNCTAD), the International Telecommunication Union, the World Meteorological Organization, the World Trade Organization (WTO), the secretariat of the United Nations Framework Convention on Climate Change, and the Food and Agriculture Organization of the United Nations (FAO), among others, have programs or research teams specializing in LDC issues.
• DESA provides support to LDCs through analysis, data, information on support measures, and capacity building, as well as by supporting the work of the Committee for Development Policy in its deliberations on LDC inclusion and graduation (see Chapter I). It collects and disseminates information on LDCs and recently graduated countries, maintains the LDC Portal on international support measures, including support for graduation, and provides capacity building, particularly for graduating and recently graduated countries.
• UNCTAD publishes an annual Least Developed Countries Report, which addresses trends and issues relevant to LDCs, provides substantive support for the Enhanced Integrated Framework (see above), and provides capacity-building services to LDCs.
• The Economic and Social Commission for Asia and the Pacific (ESCAP) publishes an annual report, the Asia-Pacific Countries with Special Needs Development Report, which covers LDCs, landlocked developing countries, and small island developing States. It provides capacity building to LDCs in the region, particularly in productive capacity, infrastructure, trade, and institutional development.
• The Office of the High Representative for the Least Developed Countries, Landlocked Developing Countries, and Small Island Developing States (UN-OHRLLS) advocates for LDCs within the United Nations and with other partners, assists LDCs in mobilizing resources and other support, and supports LDC group consultations. It also monitors the implementation of the LDC Programmes of Action.

See also Organisations

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.

The World Bank, the International Monetary Fund (IMF), and most other international and regional financial institutions do not consider LDC status when determining the terms of their aid to countries, but use per capita income and other criteria. 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 ($1,335 in fiscal year 2025).  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. The ADB classifies countries into groups that determine the type of financing provided. These groups are defined primarily in terms of income and creditworthiness, but whether or not a country is an LDC can, in some cases, affect the classification. For example an LDC that has a per capita income level above a certain threshold (currently the IDA’s operational cutoff threshold) and is considered to lack creditworthiness will be classified in a category that receives concessional assistance only, whereas a non-LDC in the same situation might (depending on a range of factors such as risk of debt distress) be classified in a category that receives a blend of concessional and non-concessional resources. 

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?

See the information for LDC-specific mechanisms here. 

Because most multilateral and regional support, excluding LDC-specific mechanisms, 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. 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 “simultaneous 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.

At the ADB, the impacts of graduation depend on the situation of the country in terms of income and creditworthiness, as outlined in the section on "Classification and graduation of developing member countries" of the Operations Manual. According to current rules, for LDCs with a per capita income level above the IDA's operational cutoff threshold and is considered to lack creditworthiness, graduation may trigger a process of reclassification into a category that receives a blend of concessional and non-concessional resources. For an LDC with per capita income above the GNI cutoff threshold and that is considered to have adequate creditworthiness, graduation may trigger a process of reclassification into a category that receives non-concessional loans only. For other LDCs, graduation would not affect classification at the ADB.  The reclassification process is not automatic, considers a range of factors including risk of debt distress, and is undertaken on a case-by-case basis.

In regard to resource allocation by UNDP, graduation from the LDC category could potentially affect a portion of the core resources dedicated to a country that has graduated out of the LDC category in the subsequent UNDP integrated budget cycle. However, the amount of resources available after graduation would depend on numerous factors, including the country’s needs and overall UNDP funding.

Several organizations are committed to supporting countries through a “smooth transition” out of the category in response to General Assembly resolutions and the programmes of action for LDCs, including the Doha Programme of Action. UN-OHRLLS coordinates an inter-agency task force to that effect.