COVID-19: Impact is integral to key LDC criteria scores of graduation review

At the upcoming triennial review of the list of 47 Least Developed Countries (LDCs), as defined by the United Nations, scheduled on 22-26 February 2021, five countries will be reviewed and recommended for graduation from the LDC category if they continue to meet a set of criteria.

These are: Bangladesh, Lao PDR, Myanmar, Nepal and Timor-Leste.

The last review in March 2018 decided that Bangladesh, Lao PDR and Myanmar will be considered for graduation review for their second consecutive time in 2021, while the decision for Nepal and Timor-Leste was deferred to 2021 due to sustainability concerns in terms of their development progress.

Other LDCs that are already scheduled for graduation are Vanuatu (2020), Angola (2021), Bhutan (2023), Sao Tome and Principe (2024) and Solomon Islands (2024).

LDCs are eligible for graduation, if they meet thresholds for either two of the three key LDC criteria (gross national income per capita, human assets index and economic vulnerability index) or alternatively, at least twice the Gross National Income (GNI) per capita threshold, in two consecutive triennial reviews.

The triennial review also considers additional information (country-specific analysis), as a flexibility principle, before a graduation recommendation.

In early 2020, after a comprehensive review of the LDC criteria, new supplementary graduation indicators are being introduced as additional information for each triennial review, starting in 2021, to enhance the graduation framework.

Further, as part of the refined LDC criteria, additional changes have been made to the indicators of the human assets index and economic vulnerability index, with the latter being renamed as "economic and environmental vulnerability index".

The new supplementary graduation indicator set is described as "methodological sound indicators covering most LDCs and other developing countries" and "covers vulnerabilities and relevant factors not adequately captured by the LDC criteria and country-specific information (e.g. inequalities, infrastructure, domestic and external financial resources, technology, conflict and violence, governance)."

It is "relevant for graduation recommendation, but not requirement for graduation" and "further strengthens alignment with 2030 Agenda for Sustainable Development and other relevant agendas with refined LDC criteria directly linked to eleven SDGs and supplementary graduation indicators covering all SDGs".

In its 12 May statement addressing "Covid-19 and graduation from the LDC category", the UN Committee for Development Policy (CDP), responsible for the periodical review of the LDC category and for recommending countries (all UN member states in developing regions) for both graduation and inclusion, has announced that it "is deeply concerned about the possible negative impacts of the Covid-19 crisis on LDCs. The Committee is also anxious that Covid-19 may negatively impact the preparations of LDCs that are graduating and those to be considered for graduation at the next triennial review".

However, the CDP statement further states that "the LDC criteria for the 2021 triennial review will be calculated on basis of the most recent data available at the end of 2020 and will include data up to 2019. Hence, the LDC criteria scores will not show the impact of Covid-19".

As regards the five countries that will be considered for graduation at the 2021 review, it informs that "in making this decision, the CDP will not only consider the LDC criteria scores, but also additional information in the form of supplementary graduation indicators and country-specific analysis. This material will include information on Covid-19 and its impacts. In obtaining and reviewing this information, the CDP will also consult with countries concerned. In case any of these countries are recommended for graduation, the CDP will also draw on this information, inter alia, for suggesting priorities and support needs required to ensure a smooth transition from the LDC category".

Similarly, the statement notifies that "the CDP will also identify countries that meet the criteria for graduation for the first time. The LDC indicators will not reflect the impact of Covid-19 in 2021. However, the CDP will start reviewing information on Covid-19 and its country-specific impacts after countries that meet the graduation criteria for the first time have been identified. The relevant information will also be reflected in the additional material to be considered at the subsequent triennial review scheduled for 2024".

The hugely detrimental impact of COVID-19 that will continue to dominate 2020 and beyond, is strangely not being accounted for in the three key LDC criteria scores but only considered as "additional information" in the form of supplementary graduation indicators and country-specific analysis.

This glaring gap of data in the LDC criteria scores is, therefore, a recipe for a highly questionable graduation assessment in the upcoming triennial review in February 2021.

In mid-May, the UN Children's Fund (UNICEF) announced that in the next six months, COVID-19 will cause under-five deaths of up to 28,000 in Bangladesh and 4,000 in Nepal, based on analytical estimates by researchers from the Johns Hopkins Bloomberg School of Public Health, recently published in The Lancet Global Health Journal.

This negative impact on under-five mortality rate, one of the health indicators of the human assets index, hence directly influences the LDC criteria scores of Bangladesh and Nepal.

Exclusion of this data therefore begs the question of a sound and factual graduation assessment.

The UN Secretary-General's report of 19 March on progress made in the implementation of the Istanbul Programme of Action for the LDCs for the Decade 2011-2020, has already alerted that "economic activity in the least developed countries in the near term could be negatively affected by the new coronavirus (COVID-19) pandemic, for example, as a result of lower commodity prices and reduced tourism, leading to growth rates lower than the 7 per cent called for pursuant to the Istanbul Programme of Action and the Sustainable Development Goals".

The Istanbul Programme of Action was adopted at the fourth UN Conference on the LDCs in 2011 in Istanbul, with the aim of enabling half the number of LDCs to meet the criteria for graduation by 2020.

With a success rate of graduation of only three LDCs by 2020, the fifth follow-up conference is scheduled to be held from 21 to 25 March 2021.

The Director-General of the World Trade Organization, in the foreword of its report released on 8 May, focusing on "Trade impacts of LDC graduation", warns that "the release of this report comes amid the COVID-19 health crisis, which is threatening the lives and livelihoods of people around the world, and having an enormous impact on economies large and small" and that "economic dislocation threatens to reverse hard-won socioeconomic development gains in LDCs, and could potentially delay graduation for some countries. As we monitor the impact that COVID-19 is having on all members, it will be critical to keep a close eye on the evolving situation in graduating LDCs".

Further, the UN Department of Economic and Social Affairs (UN-DESA), hosting the CDP Secretariat, has stated in its 1 May policy brief, that COVID-19 "threatens to undo progress achieved towards sustainable development by the LDCs over recent decades. Even before the crisis, LDCs were unlikely to achieve the SDGs" and "once the new coronavirus spreads within an LDC, prospects are dire. Covid-19 is overwhelming public health systems even in many developed countries. It will almost certainly wreak havoc in countries with underdeveloped health systems. There are on average only 113 hospital beds per 100,000 inhabitants in LDCs, less than half the number in developing countries and around 80 per cent below developed countries".

According to UN-DESA, as of 27 May, based on World Health Organization data, there are a total number of 82,832 confirmed cases in the 47 LDCs, with 1,666 deaths. The data shows a spike of 20,021 cases and 352 deaths, within a week of the update.

The still comparatively lower number of reported cases, can be attributed to lower rates of testing with 714 reported tests per 1 million population, as of 20 May, based on Worldometer data tracked by UN-DESA.

The COVID-19 impact is, therefore, integral to graduation assessment in the February 2021 triennial review and not merely "additional information".

The impact must accordingly be reflected in the three key LDC criteria scores of GNI per capita, human assets index and economic and environmental vulnerability index as well with inclusion of data up to 2020.

Further, it must be noted that the comprehensive review of the LDC criteria has also strengthened graduation eligibility starting from 2021 and hence, "countries with highly skewed development are only eligible for graduation if they pass the two graduation thresholds [of key LDC criteria] with sufficiently high margin".

The inclusion of data up to 2019 only, as stated in the 12 May CDP statement, and therefore, absence of COVID- 19 impact on the key LDC criteria scores of graduation assessment, will be a fundamental shortcoming as well as a flaw in any sound graduation recommendation.

By Prerna Bomzan.

Source: SUNS - South North Development Monitor, #9128 Friday 29 May 2020.