The Himalayan kingdom of Bhutan will be jubilant this year when it leaves the club of the world’s poorest countries, while others still have a mountain to climb.
The tiny state, known for its Gross National Happiness Index, will on December 13 become the seventh country to graduate from the band of least developed countries established by the United Nations in 1971.
“We are taking it with great respect and pride, we are not nervous,” Bhutan’s Prime Minister Lotay Tshering told AFP at the LDC summit that ended in Doha on Thursday.
Leaders of all 45 other LDCs are eager to follow. Bangladesh, Nepal, Angola, Laos, Solomon Islands and Sao Tome are scheduled to graduate by the end of 2026.
But they worry about losing business privileges and the cheap finance that vanishes three years after they leave. Angola and the Solomons have sought to delay their exit. others may follow.
Despite his confidence, Schering has reason to maintain his lead.
self respect at stake
Booming hydropower exports to regional power India have raised per capita incomes for Bhutan’s 800,000 people to about $3,800 a year, 30 percent more than its giant neighbor.
But the coronavirus pandemic and global inflation have forced spending and the government last year banned the import of foreign cars to stop money flowing out of the country.
“Life is about adaptation,” Tshering said.
“It is about losing and gaining. You lose one, you gain one. I think we are going to lose out on the availability of some grants, but we will have access to more business opportunities or more investments. It’s just a trick of the game.”
National pride is also at stake for Bangladesh, which was dubbed a “basket case” by US Secretary of State Henry Kissinger after its creation in 1971.
The apparel industry has turned the South Asian nation of 170 million into an export powerhouse, with a per capita GDP above even India’s.
But analysts say exports will decline after the end of the LDC privilege. And Bangladesh has sought an international loan of about $5 billion in the last one year to increase reserves.
Ardashir Kabir, president of the Bangladesh Employers Federation, said the country is committed. “We will not be afraid at all, we will generate our own resources, we will move forward.”
Losing the LDC tag brings credibility and “attracts investment from the world’s biggest countries,” he said.
Nepal’s Deputy Prime Minister Narayan Kaji Shrestha told AFP, “Graduating means we are moving up. We cannot live under the banner of the LDC forever.”
To be promoted to middle-income country status, candidates must pass two of three tests – achieving gross national income of more than $1,222 a year or reaching a set score for human well-being or economic vulnerability. UN committees investigate cases for years.
Maldives became one of the rare success stories in 2011.
But President Ibrahim Mohamed Solih told the summit it had been a “bitter story”. Frequent crises have struck the atoll, which attracts tourists from all over the world.
Before he graduated, the 2004 Asian tsunami was “catastrophic”, costing nearly 60% of GDP, Solih said.
When Covid-19 forced a near global lockdown in 2020, it turned “a thriving upper middle income country into a ‘no-income country’ for three months.”
The Ukraine War caused further “havoc” with higher commodity prices.
Solih said the country is “concerned” about leaving the club with many of the “weaknesses” that made them poor in the first place.
LDCs want trade privileges to be kept for at least six years after graduation but richer countries are resisting.
East Timorese President Jose Ramos Horta said the crisis “has prompted the banks, the rich and the powerful to not think rationally that unless all act as part of the same humanity, insensitivity and reckless greed” Will sink the global ship.”