Engaging with development and trade partners on LDC graduation

Engagement with trade and development partners is important to secure a smooth transition strategy.  Though most development partners continue to support countries after graduation, it is important to anticipate any possible changes, for example in the type of ODA that will be provided after graduation or the terms of concessional finance; and to be able to work with trade partners to mitigate negative impacts from the end of LDC-specific market access schemes.

Institutionally, countries might engage with development and trade partners through existing coordination mechanisms or may decide to establish a specific consultative mechanism related to graduation. For example, Cabo Verde established a specific donor group to support graduation (see below) while Bhutan integrated the issues related to graduation within the mechanisms already established for support from donors to the 12th five-year development plan and the SDGs. 

Here are some examples of how countries approaching graduation have engaged with development and trade partners:

• Bhutan’s smooth transition from LDC category is aligned to its five-year development plans. Bhutan maintains regular Round Table Meetings with its development partners. A meeting to take stock of progress on the 12th Five-Year Plan and the SDGs in September 2021 was seen as an opportunity to reinforce partnerships and inform the way forward for the period after graduation.   Graduation has also discussed in the context of the annual Country Programme Board (CPB) meetings with heads of Resident UN agencies and Non-Resident agencies. Furthermore, Bhutan has engaged with partners individually. For example, during the 9th European Union-Bhutan Annual Consultations in December 2020, the EU reaffirmed that its assistance
  to Bhutan would continue beyond graduation, and encouraged Bhutan to ratify the conventions that would enable them to apply for GSP+.

• Samoa graduated from LDC status in 2014. It began working on a smooth transition in 2009. In 2011, it agreed with its development partners on a Joint Policy Matrix, which became the basis for the delivery of aid once graduation became effective. To prevent the abrupt loss of preferential market access under the DFQF (duty-free, quota-free) arrangement granted to LDCs, the government negotiated with some of its export partners including the USA and Japan the continuation of DFQF schemes beyond graduation. Under Everything but Arms, a transitional period of three years was automatically allowed after graduation for access of Samoa’s exports to the EU market. In addition, Samoa continued to receive preferential bilateral market access to Australia and New Zealand. As a small island developing state (SIDS) that faces severe and permanent economic and environmental challenges, Samoa has been actively engaged with the international community and in constant dialogue with its development partners to ensure that any LDC-specific concessions lost as a result of graduation could legitimately be retained on SIDS-specific grounds. Successive reports to the CDP on Samoa's transition are available here and the latest is available here.

• Cabo Verde graduated in December 2007. In preparation for graduation, the Government set up a donor support group (Grupo de Apoio à Transição - GAT) for the transition, to adjust to the eventual phasing out of the support measures associated with LDC membership. In June 2007, GAT adopted a declaration supporting Cabo Verde’s socioeconomic transformation agenda. Additionally, a budget support group (BSG) composed by the Government and participating multilateral and bilateral donors was created in 2005 to align and harmonize donor support around the Growth and Poverty Reduction Strategy. Cabo Verde benefitted from the normal 3-year transition period for the EU's Everything-But-Arms scheme, and at the end of this period, in 2010, the EU further extended the transition period until January 2012. Cabo Verde is now a beneficiary of the GSP+ scheme. Monitoring reports on Cabo Verde's transition are available here.

• Maldives graduated in 2011.  It advocated for the LDC group in issues such as the CDP's monitoring and the WTO TRIPs waiver.  It was instrumental in the adoption of a resolution by the General Assembly which extends for a period of three years the support for travel to attend General Assembly sessions. The last monitoring reports for the Maldives is available here (PDF).