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The purpose of defining LDCs was to 
attract special international support for 
the most vulnerable and disadvantaged 
members of the UN family. The official UN 
recognition of LDC category was adopted 
by the General Assembly in 1971 declaring 
a list of 25 LDCs; which were Afghanistan, 
Benin, Bhutan, Botswana, Burkina 
Faso, Burundi, Chad, Ethiopia, Guinea, 
Haiti, Lao People DR, Lesotho, Malawi, 
Maldives, Mali, Nepal, Niger, Rwanda, 
Samoa, Sikkim (became a part of India in 
1975), Somalia, Sudan, United Republic of 
Tanzania, Uganda, and Arab Republic of 
Yemen. Unfortunately, the number of LDCs 
has almost doubled since the concept was 
adopted in 1971 and many of the original 
designees have lower per-capita income 
today compared to thirty-five years ago.

In the 47 years of the LDC category’s 
existence, only five countries have graduated 
(Botswana (1994), Cape Verde (2007),  
Equatorial Guinea (2017), Maldives 
(2011) and Samoa (2014)) and two 
more countries, Vanuatu and Angola, are 
scheduled for graduation in 2020 and 
2021, respectively. Nepal and Timor-
Leste also met the criteria but were not 
recommended for graduation at this time, 
due to economic and political challenges. 
Bangladesh, Lao People’s Democratic 
Republic and Myanmar met the graduation 
criteria for the first time but would need to 
do so for a second time to be eligible for 
consideration in 2021.

Graduation Methodology

Graduation is a result from a broad-based 
process of development of productive 
capacities, structural transformation and 
diversification of the economic structure. 
The list of LDCs is reviewed every three 
years by the CDP, a group of independent 
experts reporting to the United Nations 
Economic and Social Council (ECOSOC). 

The CDP, in its report to ECOSOC, may 
recommend countries for addition to, or 
graduation from, the list of LDCs.

1. The income criterion —GNI per capita

2. A human assets index (HAI)

3. An economic vulnerability index (EVI)

1. Gross National Income (GNI) per 

capita

 Rationale: GNI per capita provides 

information on the income status 
and the overall level of resources 
available to a country.

 GNI is calculated from national 

accounts data converted into USD 
using the World Bank Atlas method 
(to reduce impact of short-term 
exchange rate fluctuations).

 GNI per capita is derived by dividing 

GNI in USD by the annual population 
of a country.

Data Sources

 GNI per capita is calculated by 

the UN Statistics Division on the 
basis of its National Accounts Main 
Aggregates Database.

 Population data are taken from the 

UN Population Division.

Thresholds

i) The inclusion threshold is set at the 

three-year average of the level of GNI 
per capita, which the World Bank 
defines for identifying low-income 
countries. At the 2018 review it was 
$ 1,025.

ii) The graduation threshold is set at 

20% above the inclusion threshold. 
At the 2018 review it was $ 1,230.

iii) The income-only graduation threshold 

is twice the graduation threshold. At 
the 2018 review it was $ 2,460.

2. Human Assets Index (HAI)

Since 2015 the CDP uses absolute 
thresholds for the HAI to determine 
inclusion and graduation eligibility. The 
HAI is composed of 5 indicators grouped 
into a health and education sub-index and 
the original values for each HAI indicator 
are converted into index numbers using a 
max-min procedure.

Human

Assets

Index

Health

Index

(1/s2)

Under-five mortality rate (1/6)

Percentage of population undernourished (1/6)

Maternal mortality ratio (1/6)

Gross secondary school enrolment ratio (1/4)

Adult literacy rate (1/4)

Education

Index

(1/2)

Figure-1: Composition of HAI

EXPERT’S INSIGHT