SYDNEY, Sep 21 2026 (IPS) - The UN General Assembly will soon vote – most likely favourably – on Bangladesh’s request to postpone the country’s graduation from the UN’s Least Developed Country (LDC) category, currently scheduled for November this year. The request for a 3-year extension was endorsed by the ECOSOC following the recommendation of the UN’s Committee for Development Policy (CDP). It is highly likely that the extension will also be justifiably granted to Nepal and Lao People’s Democratic Republic (Lao, PDR) – the two other countries scheduled to graduate with Bangladesh, given the fast deteriorating global economic situation and recent natural disaster in Nepal. In fact, the same argument for an extension may be admissible to all prospective graduating countries, such as Solomon Islands (2027), Cambodia (2029) and Senegal (2029).
Anis Chowdhury
The background
The United Nations established the LDC category in 1971 for low-income countries facing severe structural barriers to sustainable development and to direct special international support toward them such as preferential market access, financial aid, and technical cooperation. The idea of a special category for low-income, structurally weak countries originated in the first session of the United Nations Conference on Trade and Development (UNCTAD) in 1964.
Since the creation of the LDC category, the UN organised five international conferences, the first being in 1981, to draw up comprehensive ten-year frameworks for supports with specific goals. The current programme is the Doha Programme of Action (DPOA) for the Decade 2022–2031, preceded by the Istanbul Programme of Action (IPOA) for the Decade 2011–2020.
The decision to establish a separate LDC category was undoubtedly commendable. The global consensus around the comprehensive action programmes also reflected the goodwill of the international community.
However, none of the programmes could reduce the vulnerability of LDCs. The number of LDCs steadily increased from the 1971 list of 25 countries, reaching a peak of 51 countries in 2003. The number now stands at 46, still nearly double that of the original list. Only 9 countries exited the list – one, Sikkim, through India’s annexation in 1975.
Although the inclusion of newly independent countries partly explains the lengthening of the LDC list, one cannot avoid the judgement of an overall failure of the international community’s good-intentioned programmes. This is especially so in light of the development successes of countries which did not join the group despite their eligibility.
The Reckoning
The failure became staggering by the time the international community met in Istanbul in 2011. After four decades since the special LDC category was created, only three countries – Botswana, Cabo Verde and Maldives – exited the group. Furthermore, the post-graduation experience has been disappointing.
For example, life-expectancy in Botswana, the first country to exit the LDC group, declined from 61.6 years in 1988 to 50.08 years in 2003, while it remains one of the most unequal countries in the world, holding the 9th highest income Gini coefficient globally. Botswana, although hailed for macroeconomic stability, failed to transform structurally with the share of manufacturing hovering below 6% of GDP, and it remains extremely vulnerable to fluctuations in international commodity markets, especially diamond. Thus, growth has declined significantly since the mid-2000s and the unemployment rate has increased to very high levels, around 26%.
Therefore, the core goals and targets of the IPOA included:
• Enable half of all LDCs to achieve graduation status by 2020.• Attain sustained, equitable, and inclusive economic growth of at least 7% annually.
• Strengthen education, health, and nutrition.
• Build productive bases and diversify economies to generate decent jobs, especially for youth
Unfortunately, only 6 countries – Maldives, Samoa, Equatorial Guinea, Vanuatu, Bhutan and São Tomé and Príncipe graduated – during 2011-2024, and 3 countries – Bangladesh, Nepal and Lao PDR – became eligible to graduate this year. Again, the experience is not very encouraging for the graduated countries, while the fear of graduation has gripped the countries soon to graduate.
In 2021, UNCTAD concluded that 50 years of LDC experience is “sobering”. It found that half of the LDCs fell behind the rest of the world in terms of per capita income and other dimensions of development. Hence, the economic gap between these countries and the rest of the world has widened over the last 50 years.
Rejecting “LDC insult”
Zimbabwe, a land-locked country, rejected the UN’s recommendation to be classified as a LDC in 2006 despite facing severe economic hardships. Zimbabwe viewed the UN recommendation “to be downgraded to LDC status” as an insult, while the neighbouring land-locked Zambia was among the first group of countries classified as an LDC in 1971.
When Zimbabwe’s per capita GDP plunged to USD341 in 2008, resource-rich Zambia’s per capita GDP was around USD1,376. Today, after more than half a century as an LDC, the per capita GDP of Zambia, one of the world’s leading producers of copper, cobalt, and semi-precious gemstones like emeralds, is around USD1,318, while Zimbabwe’s per capita GDP recovered within a decade to around USD3,445 in 2017.
Vietnam, coming out of a quarter century long devasting war in 1975, facing the challenge of unifying the country during the worst global economic situation with a paltry per capita income of around USD85, chose not to join the LDC group. Instead of aid dependence, it opted for the trade and investment route to development. Today, its per capita GDP is approximately USD5,066, while Bangladesh which joined the LDC group in 1975 with a per capita income of around USD230 could manage to raise its per capita GDP to approximately USD2,960.
The Republic of Korea (ROK), one of the poorest countries of the world in the 1960s, could also join the LDC group in 1971 when it was created; but it did not. Maintaining its policy independence and choosing the trade and investment route, ROK has become a full-fledged developed country in 1996 (member of OECD) within three decades. It managed to increase its per capita GDP from USD158 in 1960 to USD36,227 in 2025.
What may have gone wrong?
UNCTAD attributed the “sobering” experience to the LDCs’ inability to exploit international support measures (ISMs) strategically to develop their productive capacity. Others offered different reasons such as failure to understand the complex development process and appreciate the dangers associated with increased integration of structurally weak economies to the rapidly changing global economic system.
Add to these, complicity. Countries joining the group took ISMs as guaranteed; they did not take serious steps to mobilise domestic resources, diversify their economies and expand markets. Take the case of Bangladesh, a country regarded as the best utiliser of ISMs.
Bangladesh’s tax-GDP ratio is dismally low, experiencing a decline from a peak of around 10% to around 7%. Its ready-made garment (RMG) sector’s dominance increased from around 67% of export earnings in 2018 when the country first met the graduation criteria to around 85% by 2025 while it should have been declining as the graduation deadline was approaching.
Bangladesh has also failed to diversify its export markets away from the EU and the USA, accounting for close to 80% of RMG exports. It does not have any meaningful trade agreement with any country or trading bloc, while Vietnam has 17 bilateral FTA and is a member of Progressive Agreement for Trans-Pacific Partnership as well as Regional Comprehensive Economic Partnership, the world’s largest free trade agreement, covering roughly 30% of global GDP.
Ironically, the sector that propelled Bangladesh’s industrialisation, made the country more vulnerable. Worst, too big to ignore, the RMG sector has captured Bangladesh’s political and policy space. The CDP’s recommendation in favour of Bangladesh’s extension request has been made subject to the country’s commitment to reforms. However, political will for reforms may waver when the state is captured by a dominant sector.
Curse or Boon?
Thus, what was supposed to be a boon, for many LDCs, the category has become a curse, trapping them in a perpetual state of underdevelopment and vulnerability. It fits the narrative of William Easterly’s The White Man’s Burden; unfortunately, the international community may feel burdened and grant an extension to the “fearful” LDCs even when its “good-intentioned” efforts have produced so little good.
Anis Chowdhury, Emeritus Professor, Western Sydney University (Australia). He held senior UN positions in Bangkok and New York and served as Special Assistant to the Chief Advisor for Finance (with the status and rank of State Minister) in the Professor Yunus-led Interim Government. E-mail: anis.z.chowdhury@gmail.com; a.chowdhury@westernsydney.edu
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