WT/GC/W/806/Rev.1  
21 September  2021 
(21-7045) Page: 1/7 
General Council  Original:  English  
 
  COMMUNICATION FROM CHAD ON BEHALF OF THE LDC GROUP  
TO THE GENERAL COUNCIL  
Revision  
The following communication, dated 15 September 2021 , is being circulated at the request of the 
delegation of Chad on behalf of the LDC Group.  
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LDC GRADUATION FACT SHEET  
THE LDC CATEGORY  IN A NUTSHEL L 
1. LDCs suffer from common structural challenges  including low-income  levels, high 
vulnerability  to external  shocks , and weak human assets . In turn, t hese handicaps hamper  LDC 
productive capacities, trade performances and development prospects . 
2. The definition of LDCs is based on three criteria developed and regularly reviewed by the 
Committee for Development Policy (CDP) - a subsidiary advisory body of the United Nations 
Economi c and Social Council (ECOSOC).  
3. These include the Gross National Income (GNI) per capita, the Human Asset Index (HAI) 
and the Economic Vulnerability Index  (see figure 1 for a list of indicators used to measure these 
criteria) . 
Figure 1 : LDC criteria as refi ned in the 2021 triennial review  
 WT/GC/W/806/Rev.1  
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  Inclusion in and graduation f rom the LDC category  
4. Countries are eligible to enter or leave the LDC category if they meet the inclusion or 
graduation thresholds defined by the CDP.  
5. To be included, a country must meet each of the three inclusion criteria during one triennial 
review and its population must be lower than 75  million . 
6. To graduate, a country must meet at least two of the three graduation thresholds in two 
consecutive triennial reviews . Countries can also gra duate based on the income -only criteria if 
their GNI per capita is at least twice the graduation threshold in two consecutive reviews.  
Table 1 : Inclusion and graduation thresholds as defined by the 2021  Review  
Criteria  Inclusion Threshold  Graduation Threshold  
Gross national income (GNI) 
per capita  Three -year average of 
GNI per capita lower than 
USD 1,018  Set at 20% above the inclusion threshold : 
USD 1,222 
The income only graduation threshold is twice 
the graduation threshold : USD  2,444 or above  
Human asset index (HAI)  60 or below  Set at 10% above the inclusion threshold : 66 
or above  
Economic vulnerability index 
(EVI)  36 or above  Set at 10% below the inclusion threshold : 32 
or below  
Figure 2 : LDCs performance under the three criteria in the 20 21 review  
 
 WT/GC/W/806/Rev.1  
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Source : Elaboration based on data by the UNCDP . 
The Graduation Process  
7. The Istanbul Programme of Action (IPoA) for the period 2011 -2020 sets, for the first time, 
the goal of "enabling half the number of least developed countries to meet the criteria for 
graduation by 2020 ". 
8. When an LDC meets the graduation criteria for two consecutive triennial review s, the CDP 
may recommend it for graduation based on an ex-ante impact assessment, a vulnerability profile 
and taking into account the position of the country concerned.  
9. Once endorsed by the ECOSOC, the General Assembly (GA) takes note of the CDP 
recommendation,  and the graduation becomes effective three years later.  
10. Under exceptional circumstances, the General Assembly may grant an additi onal transition 
period during which the country remains in the LDC category.  
11. Since the creation of the LDC category  in 1971 , only six LDCs have managed to graduate 
from the category . The latest example is Vanuatu, who graduated on 4 December  2020.  
12. Currentl y, however, 16 countries meet the graduation criteria  and 4 are already scheduled 
for graduation : Angola (2024), Bhutan (2023), Sao Tome & Principe (2024) , and Solomon Islands 
(2024) . 
13. The ECOSOC has endorsed the recommendation of the CDP  on the graduation of 
Bangladesh, Lao PDR and Nepal . Myanmar and Timor -Leste met the criteria for two or more 
consecutive time s but the recommendation by the CDP has been deferred . Cambodia , Comoros, 
Djibouti, Senegal, and Zambia have met the graduation criteria f or the first time  in 2021 . 
14. Finally, another 10 countries met one graduation criteria at the 2021 triennial review.  WT/GC/W/806/Rev.1  
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  Table 2 : LDCs meeting the graduation criteria  
LDC Graduation criteria met  
GNI per capita only  GNI per capita  HAI EVI 
Angola  X X   
Bangladesh   X X X 
Bhutan  X X X X 
Cambodia   X X X 
Comoros   X X  
Djibouti  X X   
Kiribati  X X X  
Lao PDR  X X X  
Myanmar   X X X 
Nepal    X X 
Sao Tomé and Principe   X X X 
Senegal   X X  
Solomon Islands   X X  
Timor -Leste   X X  
Tuvalu  X X X  
Zambia   X X  
Source : UNCDP . 
Table 3 : LDCs meeting one graduation criterion in the 20 21 triennial review  
GNI EVI HAI 
Sudan  Central African Republic  Haiti 
Mauritania  Togo Rwanda  
Lesotho  Congo DRC   
 Guinea   
 Uganda   
Source : UNCDP . 
International support measures  
15. To help overcome  their structural impediments , LDCs benefit from  specific international 
support measures (ISM) targeting their handicaps  and vulnerabilities . 
16. In the area of trade, these include , among others , enhanced technical assistance , 
preferential market access and special and differential treatment (S&DT) provisions in WTO rules.  
17. While graduation represents a significant achievement , leaving the LDC category also implies 
that these countries , after graduation,  lose access to the LDC-specific ISM , which contribute to 
their socio -economic development.  
18. This has prompted calls for supporting graduating countries with additional targeted 
measures after losing their LDC status as an incentive to graduate and enable them to adjust to 
their new status.  
A "smooth transition " to facilitate graduation  
19. In recognition of this need, the UNGA introduced the principle of 'smooth transition '1 to 
ensure  that graduation does not cause disruption in the development  progress of the country 
concerned . 
20. In particular , the GA calls for LDC -specific ISM to be phased out in a gradual and predictable 
manner following the final exit of countries from the list.  
21. The COVID -19 outbreak significantly reinforces the need for such a smooth graduation 
process as the pandemic risks undoing many of the LDCs' development achievements so far  (see 
box 1). 
 
1 For further details, see UN resolution A/RES/59/209; A/RES/65/286; or A/RES/67/221.  WT/GC/W/806/Rev.1  
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  22. To date, there is no clarity on the length of  time for the transition period . Furthermore , 
smooth transition arrangements lack  formal  and binding  procedures that are applicable to all 
LDC-specific ISM across the board .2 
23. In practice , the extent to which LDCs can retain access to relevant ISM depend s therefore 
on their ability to negotiate ISM extensions bilaterally or multilaterally with development and trade 
partners.  
Box 1 : LDC Graduation and the COVID -19 Pandemic  
 
According to UN/DESA3, the COVID -19 pandemic threatens to undo many of the LDCs' progress 
achieved towards sustainable development over recent decades . By putting national health 
systems under stress, the virus affects graduating LDCs performance under the Human Asset 
Index . A comprehensive study on the Impact of COVID -19 on LDCs by the CDP shows t hat the 
pandemic has disrupted global trade, affecting graduating LDCs more severely than other 
countries .4 In 2020 , trade has plunged owing to the limited range of products exported to a few 
markets that were themselves affected by the pandemic . Prices f or primary commodities have 
gone down, as have revenues from tourism or remittances . Finally, manufactured goods have 
suffered from disruptions in value chains, for example in sectors like textiles and clothing . All these 
impacts will affect jobs, income and savings in graduating LDCs and will be reflected in increased 
economic vulnerability and declines in GNI . Some LDCs may opt for delaying their graduation 
under those circumstances but for those who decide to go ahead, the risk of falling back in to the 
LDC category may be significant in the absence of effective smooth transition measures.  
 
"Smooth graduation " in the WTO context  
24. Paragraph 16 of the  General Assembly  Resolution adopted on 2 1 December  2012 on smooth 
transition for countries graduating  from the list of least developed countries  (A/RES/67/221)  
focuses specifically on trade -related ISM and invites  all Members of the WTO : 
"to consider extending to graduated countries the existing special and differential 
treatment measures and exemptions available to least developed countries for a period 
appropriate to the development situation of the country ". 
25. Paragraphs 17 and 18 also invite LDCs trading partners to establish procedures for 
extending or phasing out preferential market access , and LDC -specific funds to continue providing 
technical assistance to graduated countries over a certain  period  of time . 
26. In practice - with the exception of the Enhanced Integrated Framework (EIF)  - there are no 
formal WTO procedures for smooth transition.  
27. After leaving the category, LDCs would normally  lose access to all trade-related  support 
measures and flexibilities granted to them, unless they request  a waiver  which must be approved 
by the whole membership . 
28. This puts graduating LDCs in a difficult situ ation, not least given their economic 
vulnerabilities and their limited negotiating capacity.  
Trade -related international support m easures  (ISMs) in favour of LDCs  
29. Trade -related ISM  can be broadly organized under three categories : 
• Unilateral trade preferences in favour of LDCs  (e.g., in the form of  duty-free quota 
free (DFQF) market access  or through the WTO services waiver ). 
 
2 See Tesfachew, T. (2018). Support for post -graduation soft-landing of LDCs: Implications in the 
context of the WTO. Geneva: CUTS International, Geneva.  
3 See, UN/DESA Policy Brief #66: COVID -19 and the least developed countries available at 
https://www.un.org/development/desa/dpad/publication/un -desa-policy -brief-66-covid-19-and-the-least-
developed -countries/  
4 See https://www.un.org/development/desa/dpad/publication/comprehensive -study -on-the-impact -of-
covid-19-on-the-least-developed -country -category/  WT/GC/W/806/Rev.1  
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  • Most developed Members  and a growing number of developing Members  have 
implemented DFQF schemes covering all or nearly all tariff lines  with only a few 
exceptions.  
• Empirical analysis show s that LDCs use and benefit significantly from DFQF schemes 
when these provide a comprehensive product coverage combined with flexible rules 
of origin .5 
• Most preferential schemes do not include any specific smooth transition or phasing 
out mechanism  for graduated LDCs . 
• Only the EU , the UK and  Turkey provide a  transition period of at least 3 years from 
the date of graduation,  and, in the case of the  EU, additional periods have been 
granted in the past.  
• Special and differential treatment in WTO Agreements and relevant decisions  
• A recent report on "Trade impacts of LDC graduation " published jointly by the WTO 
and the Enhanced Integrated Framework (EIF) provides a detailed overview of the 
LDC specific S&DT provisions in WTO Agreements and relevant Ministerial or General 
Council Decisions .6 
• While some of these provisions are in the form of be st endeavour provisions , several  
are potentially significant from a development perspective . 
• These include the extension of the implementation periods of the TRIP S agreement, 
the right to maintain and allow time limited measures deviating from TR IMS 
obligations, or the goods and services benchmarks under the accession decision.  
• LDCs also enjoy some flexibility in terms of frequency of WTO notifications, for 
example, in  the area of domestic support notifications  in Agriculture . 
• Most of these provis ions are the result of decisions, by the General Council or the 
Ministerial Conferences,  taken after 1994 . Any smooth transition arrangement in the 
WTO should therefore also include Ministerial  Conference , General Council , and other 
relevant decision s in addition to S&DT provision in WTO agreements.  
• LDC-specific t echnical assistance facilit ies and funding mechanism  
• The main channel of LDC-specific support is the Enhanced Integrated Framework  
(EIF). 
• Other facilities include free legal advice from the Ad visory Centre  on WTO Law 
(ACWL ), the Standards and Trade Development Facility (STDF) , which requires l ower 
co-financing requirement from LDCs for technical assistance , or WTO  programmes 
targeting LDCs such  as the Geneva -based Introduction Course for LDCs . 
• So far, only the EIF allows for smooth transition arrangements , with g raduated 
countries having  access to EIF benefits for a period of five years after leaving the 
LDC category.  
Conclusion  
30. LDCs leaving the category will lose access to most trade -related support measures , and this 
may hamper their sustainable graduation . 
31. While they may ask for a time -limited waiver under certain WTO obligations, this request will 
have to be accepted by the rest of the WTO membership.  
32. Such process is particularly bu rdensome for LDCs with limited negotiating capacities and 
leverage in international negotiations.  
 
5 See Klasen S., I. M artínez -Zarzoso, F. Nowak -Lehmann and M. Bruckner (2016) "Trade preferences for 
LDCs. Are they effective? Preliminary econometric evidence. CDP Policy Review Series. United Nations, New 
York, or Elliot, K.A. (2015) "Trade Preferences for the Least Develope d Countries: Opportunities Not Panaceas". 
E15 Initiative. Geneva: International Centre for Trade and Sustainable Development (ICTSD) and World 
Economic Forum.  
6 See tables 39 and 40 available at 
https://www.wto.org/english/news_e/news20_e/rese_08may20_e.pdf  WT/GC/W/806/Rev.1  
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  33. Given the potentially high cost associated with the loss of key trade -related ISM  at a time 
where the world is affected by a global pandemic , it is not surpri sing that several LDCs have been  
reluctant  to graduate.  
34. Addressing this concern in the WTO could consist in securing ex ante,  that LDC specific 
support measures would continue to apply after graduation  for a certain amount of time , to be 
negotiated,  and wo uld be phased out progressively.  
35. Such an approach would be consistent with UN resolution s A/RES/59/209  and 
A/RES/67/221 . 
36. It would also enhance predictability and confidence for those LDCs about to graduate.  
37. In practice, a formal smooth transition process in the WTO exten ding LDC specific provisions 
or technical assistance should be automatically and unconditionally accessible to all LDCs after 
their graduation for a uniform period of time.  
38. It should cover both LDC specific  S&DT provisions in WTO Agreements, and any Ministerial, 
General Council or other Relevant WTO Decisions.  
39. It would  represent a significant deliverable for LDCs and send a strong signal in support of 
LDCs by the multilateral trading system.  
 
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