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Handbook on the Least Developed Country Category: Inclusion, Graduation and Special Support Measures Third Edition

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Department of Economic and Social Affairs THE COMMITTEE FOR DEVELOPMENT POLICY Committee for Development Policy The Committee for Development Policy (CDP) is a subsidiary body of the United Nations Economic and Social Council. It provides inputs Handbook on the and independent advice to the Council on emerging cross-sectoral development issues and on international cooperation for development, Least Developed focusing on medium- and long-term aspects. The Committee is also responsible for reviewing the status of least developed countries (LDCs) Country Category: and for monitoring their progress aer graduation from the category. Inclusion, Graduation For more information, please visit and Special Support cdp.un.org Measures RD 3EDITION 18-14767 — Designed by the Branding and Graphic Design Unit, United Nations Committee for Development Policy and United Nations Department of Economic and Social Affairs Handbook on the Least Developed Country Category: Inclusion, Graduation and Special Support Measures Third Edition United Nations October 2018 United Nations Department of Economic and Social Affairs (UN/DESA) The mission of the Department of Economic and Social Affairs of the United Nations Secretariat (UN/DESA) is to promote and support international cooperation in the pursuit of sustainable development for all. UN/DESA’s work addresses a range of cross-cutting issues that affect peoples’ lives and livelihoods, such as social policy, poverty eradication, employment, social inclusion, in- equalities, population, indigenous rights, macroeconomic policy, development finance and coop- eration, public sector innovation, forest policy, climate change and sustainable development. To this end, UN/DESA: analyses, generates and compiles a wide range of data and information on devel- opment issues; brings together the international community at conferences and summits to address economic and social challenges; supports the formulation of development policies, global standards and norms; supports the implementation of international agreements, including the 2030 Agenda for Sustainable Development; and assists States in meeting their development challenges through a variety of capacity development initiatives. In carrying out its work, UN/DESA engages with a variety of stakeholders around the world—non-governmental organizations, civil society, the pri- vate sector, research and academic organizations, philanthropic foundations and intergovernmental organizations—as well as partner organizations in the United Nations system. For more information, visit https://www.un.org/development/desa United Nations publication Sales No. E.18.II.A.1 ISBN: 978-92-1-104692-2 eISBN: 978-92-1-047225-8 Copyright © United Nations, 2018 All rights reserved Handbook on the Least Developed Country Category iii Foreword The category of the least developed countries (LDCs) was established in 1971 as a special group of developing countries characterized by a low level of income and structural impediments to growth and requiring special measures for dealing with those problems. The Committee for Development Planning, the predecessor of the Committee for Development Policy (CDP), was a key actor in the establishment of the LDC category. Since then, the CDP has been responsible for identifying which countries should belong to the LDC category. For this purpose, it has developed a rigorous methodology, as detailed in this publication. TheHandbook on the Least Developed Country Category is prepared by the United Nations Depart- ment of Economic and Social Affairs, which hosts the secretariat of the CDP. It responds to the need to make the methods and approaches used in the identification of LDCs, and the interna- tional support measures available to them, known to a wide range of stakeholders and to all those interested in finding solutions to the development challenges faced by these countries. This revised edition has been updated to reflect recent developments in the LDC category, includ- ing refinements to the LDC criteria and progress of several countries towards graduation from the category. Moreover, this edition of the Handbook contains additional information on interna- tional support measures, in particular on “smooth transition” provisions for countries graduating from the LDC category. I invite you to fully utilize this Handbook as a tool to better understand the category and the chal- lenges confronting LDCs. The Handbook can further help galvanize support for the development efforts of LDCs, an integral pledge of the 2030 Agenda for Sustainable Development and the Ad- dis Ababa Action Agenda of the Third International Conference on Financing for Development. Liu Zhenmin Under-Secretary-General for Economic and Social Affairs United Nations August 2018 Handbook on the Least Developed Country Category iv Acknowledgements The present publication is a collaborative undertaking of the Committee for Development Policy (CDP) and the United Nations Department of Economic and Social Affairs. The procedures pre- sented here reflect the outcome of collaborative efforts by various members, past and current, of the CDP. This issue of the publication was prepared by the secretariat of the Committee for De- velopment Policy under the general supervision of Roland Mollerus, Secretary of the Committee, who counted on substantive support from Annette Becker, Matthias Bruckner, Márcia Tavares, Daniel Gay, Namsuk Kim, and Teresa Lenzi. The contributions of Leah C. Kennedy, Mary Lee Kortes, Nardos A. Mulatu and Nancy Settecasi in producing this publication are also gratefully acknowledged. Handbook on the Least Developed Country Category v Summary The third edition of theHandbook on the Least Developed Country Category provides compre- hensive information on the least developed country (LDC) category, including a description of procedures and methodologies used in the identification of these countries and the international support measures available to them. It builds upon and updates the previous edition, published in 2015. The Handbook aims at providing comprehensive and up-to-date information on the LDC category and the benefits derived from membership therein, as well as on graduation from the category. The publication is intended for use by government officials, policymakers, researchers and others interested in the LDC category. The Handbook is organized as follows: Chapter I provides a brief history of the LDC category since its creation in 1971 and a detailed description of the procedures for inclusion in and gradu- ation from the category. Chapter II presents an overview of the international support measures accorded specifically to LDCs, including measures related to trade, development assistance and support to participation in international forums. Lastly, chapter III provides a detailed explana- tion of the LDC criteria, including composition, methodologies and data sources. In addition, the chapter presents specific examples of the application of the criteria, based on the Committee for Development Policy (CDP) 2018 triennial review of the list of LDCs. As measures of support, provisions, procedures and methodologies evolve over time, the infor- mation contained in the present Handbook will be updated on a regular basis to reflect relevant developments, including the outcome of the triennial reviews of the list of the least developed countries. Updates will be posted at http://www.un.org/ldcportal/. Up-to-date detailed infor- mation, including statistical data on the LDC category, is also available on the CDP website at http://cdp.un.org . Handbook on the Least Developed Country Category vii Contents Foreword ............................................................iii Acknowledgements ....................................................iv Summary .............................................................v Explanatory notes .....................................................xi I. The least developed country category: criteria and procedures for inclusion and graduation ....................................................... 1 A. The least developed country (LDC) category ............................. 1 B. Criteria defining the LDC category .................................... 6 C. Procedures for inclusion into the LDC category ......................... 10 D. Procedures for graduation from the LDC category ........................ 12 E. Preparing for graduation and the concept of “smooth transition” ............. 20 F. Monitoring and reporting during the transition .......................... 23 II. International support measures for the least developed countries ................ 27 A. Introduction .................................................... 27 B. Trade-related support measures ...................................... 27 1. Preferential market access for goods .............................. 28 a. DFQF and preferential tariffs ............................... 29 b. Preferential rules of origin for goods .......................... 31 2. Preferential treatment for services and service suppliers ................ 33 3. Special treatment regarding obligations and flexibilities under WTO rules . 34 C. Development cooperation. 37 1. Commitments in bilateral official development assistance (ODA) flows to LDCs ............................................... 37 a. Quantitative commitments on ODA by donors ................. 38 b. Modalities of bilateral ODA: grant element and untied aid ......... 38 2. Multilateral development cooperation ............................
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