Ajit Karn
Bhutan, a Himalayan kingdom, will celebrate its exit from the club of the poorest countries this year, while others still have a mountain to climb.
The minuscule state, renowned for its Gross National Happiness index, will be the seventh nation to graduate from the United Nations’ 1971 group of Least Developed Countries on December 13.
At the conclusion of the LDC summit in Qatar on Thursday, Bhutan’s Prime Minister Lotay Tshering told AFP, “We are taking it with great honour and pride; we are not apprehensive.”
The leaders of the remaining 45 LDCs are eager to follow. By the end of 2026, Bangladesh, Nepal, Angola, Laos, the Solomon Islands, and Sao Tome are scheduled to graduate.
However, they are concerned about losing trade privileges and inexpensive financing three years after departing. Angola and the Solomon Islands attempted to delay their departure. Others may follow suit.
Despite his assurance, Lotay Tshering has cause for concern.
– Reputation at peril –
Exports of hydroelectricity to regional utilities are soaring. Bhutan’s 800,000 inhabitants now have an annual per capita income of approximately $3,800, which is 30 percent higher than that of its enormous neighbour, India.
However, the coronavirus pandemic and global inflation have increased expenditure, and the government banned the import of foreign automobiles last year to prevent money from leaving the country.
“Adaptation is the key to life,” Lotay Tshering said.
“It involves both loss and gain. You lose one, you gain one. I believe we will lose access to some grants, but we will have greater access to commercial opportunities and investments. It is just a game strategy.”
Bangladesh’s national prestige is also at stake, as Henry Kissinger, then-secretary of state of the United States, labelled the country a “basket case” upon its creation in 1971.
The garment industry has transformed the 170 million-strong South Asian nation into an export juggernaut, with a per capita GDP that surpasses India’s.
However, analysts assert that exports will decline once LDC privileges are eliminated. And over the past year, Bangladesh has sought approximately $5 billion in international financing to buttress its reserves.
President of the Bangladesh Employers Federation Ardashir Kabir stated that the country remains determined. “We have absolutely no fear, we will generate our own resources, and we will proceed.”
Losing the LDC label confers credibility and “attracts investment from the world’s largest nations,” he explained.
Vice-Prime Minister of Nepal Narayan Kaji Shrestha told AFP: “Graduation signifies advancement. We cannot forever operate under the LDC banner.”
– ‘Havoc’ –
To qualify as a Middle Income Country, candidates must pass two out of three tests: their aggregate national income must be greater than $1,222 per year, or they must achieve predetermined scores for human welfare and economic vulnerability. Then, UN committees examine cases for years.
In 2011, the Maldives became one of the few success tales.
However, President Ibrahim Mohamed Solih informed the summit that the history has been “bittersweet.” Multiple crises have struck the atolls that attract visitors from all over the globe.
Solih stated that the 2004 Asian tsunami was “devastating” and cost nearly 60% of the GDP prior to his graduation.
In 2020, when Covid-19 caused a near-global closure, “a prosperous upper middle income country became a ‘no-income country’ for three months.”
The war in Ukraine caused further “chaos” as commodity prices have risen.
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Solih stated that countries are “concerned” about exiting the club with many of the “vulnerabilities” that caused them to be impoverished in the first place.
The LDCs want trade privileges to be maintained for a minimum of six years after graduation, but wealthier nations are resisting.
Jose Ramos Horta, the president of East Timor, stated that the crises “have not moved the banks, the wealthy, and the powerful to rationally consider that insensitivity and reckless avarice will destroy the global ship unless all act as members of the same humanity.”
