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MARKET PULSE 

FEB-2018

It is illegal to reproduce this material in any format without prior 

written approval of LankaBangla Securities Limited.

 Rationale: The HAI is a measure of 

level of human capital.

 Low levels of human assets indicate 

major structural impediments to 
sustainable development.

 A lower HAI represents a lower 

development of human capital.

Thresholds

 The inclusion threshold has been set at 60.

 The graduation threshold has been set at 

10% above the inclusion threshold at 66.

3. Economic Vulnerability Index 

(EVI)

The EVI is a measure of structural 
vulnerability to economic and environmental 
shocks, where high vulnerability indicates 
major structural impediments to sustainable 
development. Therefore, a higher EVI 
represents a higher economic vulnerability.

 The EVI is composed of eight 

indicators, grouped into various sub-
indices.

 

Original values for each EVI indicator 

are converted into index numbers 
using a max-min procedure.

Thresholds

 Since 2015 the CDP uses absolute 

thresholds for the EVI to determine 
inclusion and graduation eligibility.

 The inclusion threshold has been set 

at 36.

 The graduation threshold has been set 

at 10% below the inclusion threshold 
at 32.

Economic

Vulnerability

Index

Exposure

Index

(1/2)

Size

Subindex

(1/8)

Location

Subindex

(1/8)

Environment

Subindex

(1/8)

Trade Shock

Subindex

(1/4)

Natural Shock

Subindex

(1/5)

Economic

Structure

Subindex (1/8)

Shock

Index

(1/2)

Population (1/8)

Remoteness (1/8)

Merchandise export concentration (1/16)

Share of agriculture, hunting, forestry

and fishing in GDP (1/6)

Share of population in low elevated

coastal zones (1/8)

Instability of exports of goods

and services (1/4)

Victims of natural disasters (1/8)

Instability of agricultural production (1/8)

Figure-2: Composition of EVI

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.