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The notion of Least Developed Countries (LDCs) originated in the 1970s when the international community recognized the existence of a group of twenty-five developing countries suffering the most from profound structural impediments to growth and had a high prevalence of acute poverty. The number of LDCs has, ever since, nearly doubled, with only two countries having graduated out of the category.
The current 49 LDCs comprise more than 850 million people, about 12 per cent of the world’s population, but account for less than 2 percent of world GDP and about 1 percent of global trade in goods. This group of countries represents the poorest and most vulnerable segment of humanity, lying at the epicenter of the developmental crises.
Their low level of socio-economic development is characterized by low and unequally distributed income and scarcity of domestic financial resources. They often suffer from governance crises, political instability and, in some cases, internal and external conflicts. Their, largely agrarian, economies are affected by a vicious cycle of low productivity and low investment. They rely on the export of few primary commodities as a major source of export and fiscal earnings, which makes them highly vulnerable to external terms-of-trade shocks. Only a handful has been able to diversify into the manufacturing sector, though with a limited range of products in labour-intensive industries (i.e. textiles and clothing). These constraints are responsible for insufficient domestic resource mobilization, low economic management capacity, inadequate local private sector development, chronic external deficits, high debt burdens and heavy dependence on external financing that have kept the LDCs in a poverty trap.
The Economic and Social Council of the United Nations uses the three criteria below to identify LDCs:
For more detailed information about the LDC criteria, please see the UN-OHRLLS website.
|Central African Republic||Mozambique|
|Democratic Republic of the Congo||Sao Tome and Principe|
|Equatorial Guinea||Sierra Leone|
|Lao People’s Democratic Republic||Vanuatu|
Latin America and the Caribbean