Incentives-Based Graduation for a Soft Landing

Doha, 4 December — The High-Level Meeting concluded its third and final day with a focused call to convert commitments into country-tailored action, advancing an incentives-based pathway that turns LDC graduation into a springboard for resilience, productivity, and inclusive growth.

Chaired by H.E. Mr. Abdullah Hameed, Minister of State for Foreign Affairs of the Republic of Maldives, the closing session framed graduation not as an end point, but as a managed transition supported by predictable, well-sequenced measures. Mr. Roland Mollerus, Director of the United Nations Office of the High Representative for Least Developed Countries, Landlocked Developing Countries and Small Island States (UN OHRLLS), delivered the keynote, underscoring the Doha Programme of Action’s (DPoA) ambition to accelerate sustainable and resilient graduation while safeguarding hard-won development gains.

A distinguished panel—H.E. Mr. Amrit Bahadur Rai (Nepal), Ms. Jutta Urpilainen (European Union), H.E. Ms. Nahida Sobhan (Bangladesh), and Sheikha Haya Abdulrahman Al Thani (Qatar Fund for Development)—laid out practical guidelines for an incentives-based graduation framework designed to ensure a “soft landing” beyond the LDC category.

Four Pillars for Smooth and Sustainable Graduation

Speakers converged on a set of Four Pillars to structure support during and after graduation:

1. Extend existing support to mitigate abrupt loss of International Support Measures (ISMs)—including market access preferences and special flexibilities—through predictable, phased arrangements.

2. Create new measures that reflect vulnerability and post-graduation realities: expanded concessional finance, extended duty-free quota-free access, targeted WTO flexibilities, and climate finance calibrated to risk profiles.

3. Introduce incentives-based graduation under the DPoA, using legal and advisory support, improved credit ratings, risk mitigation tools, and technology-transfer incentives to reward progress on resilience and structural transformation.

4. Provide tailored country support through iGRAD, including readiness diagnostics, advisory services, and One UN coordination to deliver coherent, country-specific solutions.

Across interventions, participants insisted that implementation must be country specific, data-driven, and sequenced around sector priorities. They highlighted the importance of productivity growth, shock preparedness, evidence based planning, early warning systems, resilience frameworks, and institutional readiness—with gender inclusion as both a principle and a precondition for success.

Engines of Transformation: Education, Investment, and Domestic Resources

Education emerged as a cornerstone of transformation, particularly for LDCs with young demographics. Participants framed investment in education as an economic catalyst—raising productivity, enabling innovation, and strengthening long-term competitiveness.

Speakers emphasized that private investment must complement public finance, with blended finance, guarantees, and risk sharing mechanisms to crowd in responsible capital. At the same time, domestic resource mobilization, especially fair and effective taxation, was reaffirmed as the most sustainable financing source, contingent on good governance, transparency, and anti corruption as key investor priorities.

Digitalization and State Capacity

The session highlighted digital transformation—connectivity, platforms, and digital public services—as foundational to productivity and state capacity. Participants also stressed institutional coordination within governments, across the UN system, and with the private sector to avoid fragmentation and enhance impact.

Key Takeaways

• Graduation is a transition that requires long-term international support and national ownership.
• Incentives-based graduation under the DPoA reframes graduation from a loss of support to a reward for progress, with the cardinal principle that ISMs should be phased out gradually and predictably, not abruptly.
• Education, private investment, and domestic resource mobilization are the core engines of sustainable transformation.
• Digitalization, data systems, and infrastructure underpin resilience and productivity.
• iGRAD and One UN coordination are central to delivering tailored, coherent, and effective graduation support.

Conclusion and Way Forward

The Meeting stressed that LDC graduation must be supported by predictable, development-oriented measures to safeguard progress and build resilience. Persistent vulnerabilities—such as climate shocks, debt pressures, and limited diversification—require a coherent international support architecture integrating finance, trade, technology, and capacity-building.

Key priorities include national ownership through inclusive Smooth Transition Strategies embedded in development plans; access to long-term, affordable financing, including concessional resources, blended instruments, guarantees, and innovative tools like debt-for-climate swaps; building productive capacities, technological upgrading, and stronger participation in global value chains; institutional reinforcement via coherent policymaking, inter-ministerial coordination, robust data systems, and risk-informed planning.

The Meeting called for an incentives-based approach, where progress on resilience and structural transformation unlocks additional support, reducing reversal risks and sustaining momentum. Multilateral partnerships—especially the UN system and platforms like iGRAD—were highlighted as essential for tailored, coordinated assistance.

Participants reaffirmed the Doha Programme of Action as the guiding framework and committed to aligning outcomes with the 2027 Midterm Review. The roadmap emphasizes global partnerships, national capacity-building, and making graduation a milestone of opportunity anchored in resilience, inclusivity, and sustainable progress.