DEBAPRIYA BHATTACHARYA and MAMTAJUL JANNAT

It has been more than five decades since the UN established the Least Developed Countries (LDC) category, in 1971, identifying these countries as facing the most severe roadblocks to sustainable development.

LDC status unlocks international support measures (ISMs) including trade preferences, concessional finance, technical assistance, and prioritisation in aid allocation. Buffering against shocks and creating openings for investment, trade, and institutional strengthening, these measures are a lifeline for countries facing vulnerabilities due to geography, climate exposure, fragility, or conflict. The ultimate goal is “graduation” from LDC status, which triggers a transition period during which countries prepare to phase out ISMs.

This framework was designed to help countries move out of extreme structural disadvantage. But has it worked? The picture is mixed: today, some LDCs have advanced toward graduation, but many remain stuck. LDCs host about 12 percent of the world’s population, including 27 percent of its refugees, but generate less than 2 percent of global GDP and 1 percent of world trade.

These imbalances reveal the limits of the current graduation model, which overlooks the structural realities keeping many trapped in underdevelopment. To be truly fit for purpose, the LDC paradigm must be updated to better reflect these vulnerabilities, recognise diverse trajectories, and align support with today’s challenges.

THE UNEVEN PATH OF GRADUATION PROGRESS

To determine whether countries should retain LDC status or be considered for graduation, the UN Committee for Development Policy (CDP) reviews the list of LDCs every three years, using three criteria: income level, measured by gross national income per capita; human assets, assessed through health, nutrition, and education indicators; and environmental and economic vulnerability, captured through the Environmental Vulnerability Index (EVI). Countries qualify for graduation after meeting thresholds in two of the three categories in two consecutive reviews. As of late 2025, only eight countries have managed to exit the group of LDCs; 44 remain.

Six countries, Bangladesh, Lao PDR, Nepal, Solomon Islands, Cambodia and Senegal, have confirmed exit years and are preparing transition plans.

Comoros, Myanmar, Djibouti, Kiribati and Tuvalu have met the graduation criteria but deferred their exit due to political or structural challenges. Kiribati and Tuvalu, both Small Island Developing States (SIDS), have remained in the graduation pipeline for nearly two decades, reflecting the compound effects of remoteness, small size and exposure to climate risks.

Despite meeting thresholds in all three categories since 2018, Myanmar’s graduation has been held back by protracted political instability. The graduations of Comoros and Djibouti, which became eligible in 2024, were deferred due to political uncertainty and weak institutions.

Rwanda, Uganda and Tanzania are the newest additions to the graduation pipeline, having met the thresholds for the first time in 2024.

Thirty LDCs (the “holdover” LDCs) have never qualified for graduation. Of these, 26 are in Africa. The remaining four, Afghanistan, Timor-Leste, Yemen and Haiti, face instability and isolation. About 40 percent of holdover LDCs are landlocked, limiting opportunities for connectivity and integration into global markets. Around 60 percent are conflict-affected or institutionally weak; nearly 93 percent fail to meet the EVI threshold. They are also home to 17 percent of the world’s refugees. These pressures deepen fiscal strain and weaken state capacity, making progress toward graduation even more challenging.

THE LIMITS OF THE LDC PARADIGM

The slow pace of graduation is not a function of inadequate effort on the part of LDCs. Rather, it reflects the weaknesses of the model itself.

Specifically, the graduation criteria reward relatively short-term gains in economic and social indicators and downplay the impact of conflict exposure, remoteness, climate and peace-and-security risk — all realities many LDCs face. The EVI threshold, while helpful, does not necessarily fully capture these dimensions, either. ISMs likewise fall short, focusing heavily on trade preferences and concessional finance rather than addressing the challenges that impede sustainable progress. By penalising countries for conditions they cannot easily change, the LDC paradigm keeps them at the bottom of the development ladder.

TOWARD A NEW LDC FRAMEWORK

Graduation must reflect a country’s capacity to absorb shocks, recover and sustain progress despite conflict, climate exposure or geographic disadvantage. Here are some elements that policymakers at national, regional and global levels should prioritise to create a more responsive and equitable framework.

Modernise how vulnerability is measured. A more comprehensive risk and resilience index would better identify structural weaknesses and guide targeted ISMs that strengthen long-term preparedness and adaptive capacity. The UN-CDP along with UNCTAD should revisit how the EVI captures risk, ensuring that conflict, fragility, climate exposure and refugee inflows are adequately reflected.

Promote a cross-pillar approach to resilience. The LDC agenda must move beyond economic metrics to integrate climate action, governance, peace and security, and social inclusion as equal pillars of progress. This would better capture the links between economic performance, environmental stability and institutional strength, aligning international support with the ambitions of the 2030 Agenda.

Strengthen international support measures and link them to resilience-building. ISMs must go beyond trade preferences and concessional finance to address structurally weak and conflict-ridden economies. Climate funds, debt relief, governance support and peacebuilding should be strategically linked.

Domestic reforms such as stronger institutions, fiscal discipline and diversification are also vital to ensure lasting gains.

This reimagined framework cannot be one-size-fits-all: the experience of many LDCs makes clear that the graduation trajectories of landlocked developing countries, SIDS, conflict-affected or climate-vulnerable economies must be considered separately.

There are some positive signs that support for this approach is growing. The UN-CDP has introduced supplementary graduation indicators (SGIs) to allow greater flexibility in evaluating country progress. The Doha Programme of Action (2022, 2031) recognises the diversity of LDCs and calls for tailored support that reflects distinct vulnerabilities.

These are welcome steps, but more work is needed to ensure that global frameworks evolve to match the complex realities of the countries left behind. It is time to rethink the LDC paradigm, aligning measures of progress and support with today’s structural, climate, governance and peace-security challenges.

Debapriya Bhattacharya is a distinguished fellow at Centre for Policy Dialogue, and Mamtajul Jannat is a senior research associate at Centre for Policy Dialogue