The Maldives is among only three countries to ever advance from the UN’s ‘least developed country’ (LDC) designation, according to a UN report reviewing the development of the world’s 51 poorest countries.
Only the Maldives (2010), Cape Verde (2007) and Botswana (1994) have ever graduated, leading UN Secretary-General Ban Ki-moon to state that enduring marginalisation of the world’s 48 poorest countries promised “a future we cannot afford.”
“While the number of countries meeting the criteria of ‘least developed’ increased through the 1970s, 80s and 90s, the graduation rate from that grouping has been glacial,” the report’s authors said.
They extrapolated that despite limited economic and social progress, “the gap between the LDCs and the rest of the world, including the low middle income countries, is widening.”
“The structural disadvantage of these economies, weak human assets (education, health, nutrition etc), limited physical and institutional infrastructure, dependence on fragile agricultural sectors and a limited range of exports are at the heart of the continued marginalisation of these countries within the world economy,” the report stated.
While development was one ingredient, “LDCs should assume greater ownership of their own development trajectory,” the authors suggested.
“It is our contention that some of the tools to achieve this is through negotiating better prices for their valuable raw materials and in turn processing these materials to generate capital gains. Increased mobilisation of domestic resources is also a key tool in their development.”
The report also suggested that fighting corruption and seeking for the return of stolen assets can improve the business climate and spur future growth.”
While the Finance Ministry has previously insisted it has budgeted for the graduation, the Maldives’ progression to the middle income category limits the country’s access to concessional credit, removes certain trade concession, and some donor aid – as well as risks creating a perception in the donor community that it is ‘less deserving’ than countries still on the LDC list.
With a crippling budget deficit created by a bloated civil service spend, and political difficulties attached to its resolution, the Maldives earlier this month contested at the UN in New York that graduating countries still require special financial and technical assistance.
The UN may consider the issue ahead of a conference on LDCs to be held in Istanbul from May 9-13, which will seek to promote a 10-year programme for food security, decent work, disaster risk reduction, climate resilience and clean energy growth in the LDCs.
Read the report here (English)