DOHA: There will be jubilation in the Himalayan kingdom of Bhutan this year as it leaves the club of the world’s poorest countries, while others still have a mountain to climb.
The small state, famous for its gross national happiness index, will become on December 13 only the seventh country to leave the group of least developed countries set up by the United Nations in 1971.
“We take it with great honor and pride, we are not nervous,” Bhutan’s prime minister said. Lotai Tshering told AFP at the LDC summit that ended Thursday in Doha.
The leaders of the other 45 LDCs are eager to follow. Bangladesh, Nepal, Angola, Laos, Solomon Islands and Sao Tome are expected to graduate by the end of 2026.
But they fear losing the business privileges and cheap finance that disappear three years after they leave. Angola and the Solomons sought to delay their exit. Others may follow.
Despite his confidence, Tshering has reason to be nervous.
– Pride at stake – Booming hydropower exports to India’s regional power has lifted the per capita income of Bhutan’s 800,000 people to around $3,800 a year, 30% more than its giant neighbour.
But the coronavirus pandemic and global inflation have forced spending, and the government last year banned the import of foreign cars to prevent money from leaving the country.
“Life is about adaptation,” Tshering said.
“It’s about losing and winning. You lose one, you win one. I think we will lose on the availability of some grants, but we will be accessible to more business opportunities or more investments It’s just a game thing.”
National pride is also at stake for Bangladesh, described as a “hopeless case” by US Secretary of State Henry Kissinger after its creation in 1971.
The garment industry has transformed the South Asian nation of 170 million people into an export powerhouse, with a GDP per capita also higher than that of India.
But analysts say exports will contract once LDC privileges are gone. And Bangladesh has sought around $5 billion in international loans over the past year to bolster its reserves.
Bangladesh Employers Federation President Ardashir Kabir said the country remained committed. “We are not afraid at all, we will generate our own resources, we will move forward.”
Losing the PMA label brings credibility and “attracts investment from the biggest countries in the world”, he said.
Deputy Prime Minister of Nepal Narayan Kaji Shrestha told AFP: “Graduating means we’re going up. We can’t be under the LDC banner forever.”
– ‘Havoc’ – To gain promotion to middle-income country status, applicants must pass two out of three tests – achieve gross national income above $1,222 a year or achieve defined scores for human well-being or economic vulnerability. UN committees then review the cases for years.
The Maldives became one of the few success stories in 2011.
But the president Ibrahim Mohamed Solih told the summit it was a “bittersweet story”. Successive crises have hit the atolls which attract tourists from all over the world.
Before graduation, the 2004 Asian tsunami was “devastating” and cost nearly 60% of GDP, Solih said.
When Covid-19 forced a near-global lockdown in 2020, it turned “a prosperous upper-middle-income country into a ‘no-income country’ for three months”.
The war in Ukraine has caused more “havoc” with rising commodity prices.
Solih said the countries are “anxious” to leave the club with many “vulnerabilities” that made them poor in the first place.
LDCs want trading privileges to be retained for at least six years after graduation, but wealthier countries are resisting.
President of East Timor Jose Ramos Horta said the crises “have not caused the banks, the rich and the powerful to think rationally that unless all act within the framework of the same humanity, insensitivity and reckless greed will sink the ship global”.
The small state, famous for its gross national happiness index, will become on December 13 only the seventh country to leave the group of least developed countries set up by the United Nations in 1971.
“We take it with great honor and pride, we are not nervous,” Bhutan’s prime minister said. Lotai Tshering told AFP at the LDC summit that ended Thursday in Doha.
The leaders of the other 45 LDCs are eager to follow. Bangladesh, Nepal, Angola, Laos, Solomon Islands and Sao Tome are expected to graduate by the end of 2026.
But they fear losing the business privileges and cheap finance that disappear three years after they leave. Angola and the Solomons sought to delay their exit. Others may follow.
Despite his confidence, Tshering has reason to be nervous.
– Pride at stake – Booming hydropower exports to India’s regional power has lifted the per capita income of Bhutan’s 800,000 people to around $3,800 a year, 30% more than its giant neighbour.
But the coronavirus pandemic and global inflation have forced spending, and the government last year banned the import of foreign cars to prevent money from leaving the country.
“Life is about adaptation,” Tshering said.
“It’s about losing and winning. You lose one, you win one. I think we will lose on the availability of some grants, but we will be accessible to more business opportunities or more investments It’s just a game thing.”
National pride is also at stake for Bangladesh, described as a “hopeless case” by US Secretary of State Henry Kissinger after its creation in 1971.
The garment industry has transformed the South Asian nation of 170 million people into an export powerhouse, with a GDP per capita also higher than that of India.
But analysts say exports will contract once LDC privileges are gone. And Bangladesh has sought around $5 billion in international loans over the past year to bolster its reserves.
Bangladesh Employers Federation President Ardashir Kabir said the country remained committed. “We are not afraid at all, we will generate our own resources, we will move forward.”
Losing the PMA label brings credibility and “attracts investment from the biggest countries in the world”, he said.
Deputy Prime Minister of Nepal Narayan Kaji Shrestha told AFP: “Graduating means we’re going up. We can’t be under the LDC banner forever.”
– ‘Havoc’ – To gain promotion to middle-income country status, applicants must pass two out of three tests – achieve gross national income above $1,222 a year or achieve defined scores for human well-being or economic vulnerability. UN committees then review the cases for years.
The Maldives became one of the few success stories in 2011.
But the president Ibrahim Mohamed Solih told the summit it was a “bittersweet story”. Successive crises have hit the atolls which attract tourists from all over the world.
Before graduation, the 2004 Asian tsunami was “devastating” and cost nearly 60% of GDP, Solih said.
When Covid-19 forced a near-global lockdown in 2020, it turned “a prosperous upper-middle-income country into a ‘no-income country’ for three months”.
The war in Ukraine has caused more “havoc” with rising commodity prices.
Solih said the countries are “anxious” to leave the club with many “vulnerabilities” that made them poor in the first place.
LDCs want trading privileges to be retained for at least six years after graduation, but wealthier countries are resisting.
President of East Timor Jose Ramos Horta said the crises “have not caused the banks, the rich and the powerful to think rationally that unless all act within the framework of the same humanity, insensitivity and reckless greed will sink the ship global”.
