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Vanuatu's Graduation From the LDCsSince the United Nations created the least developed countries (LDCs) list in the 1970s, only six nations have moved off of the list to a higher ranking of development. Vanuatu, an island nation in the South Pacific, became the sixth country to do so on December 4, 2020, after being designated an LDC in 1985. Vanuatu’s graduation from the LDCs list can serve as a beacon of hope for more LDCs to achieve higher rates of development.

Economic Growth

The U.N. Committee for Development Policy (CDP) identifies LDCs based on their level of human assets, environmental and economic vulnerability and per capita income. Since 1991, Vanuatu has met the CDP’s income per capita threshold and was recommended for graduation in 2012, having more than twice the income per capita threshold and also meeting the threshold for human assets. In an effort to pursue graduation, Vanuatu began shifting its economic policies to decrease reliance on imports, increase exports and create employment and income-generating opportunities. Vanuatu’s rural economy grew after improvements in the livestock sector in addition to the country’s diversification of agricultural activities to include timber, kava, coconut oil and copra. The tourism industry and real estate investments were also an aid to Vanuatu’s economic growth as income per person increased by more than 2.5 times between 2002 and 2017.

Vanuatu’s Setbacks

Throughout Vanuatu’s progress in economically developing the country, the nation has also been stymied by recurring natural disasters. The U.N. Conference on Trade and Development estimates that Vanuatu is affected by an average of two to three natural disasters per year and noted that Vanuatu is uniquely affected by natural disasters as its size causes the entirety of the country to be affected as opposed to just specific regions. In 2015, Vanuatu was hit by Cyclone Pam, a Category 5 cyclone that destroyed 50-90% of the country’s shelters and 95% of crops. Cyclone Pam delayed Vanuatu’s previous progress toward graduation and warranted an extension of the country’s grace period to 2020. Additionally, the onset of the COVID-19 pandemic has caused a decrease in the country’s tourism industry. While Vanuatu’s first case of COVID-19 was reported only in November 2020, the pandemic has impacted the nation and its economic sectors.

A Pathway for LDCs

While Vanuatu is the third country in the Asia-Pacific region to graduate from LDC status, following Samoa in 2014 and the Maldives in 2011, it is only the sixth country to graduate overall. On track to move up from LDC status are Angola in 2021, Bhutan in 2023 and São Tomé and Príncipe and the Solomon Islands both in 2024. Vanuatu’s graduation can bring hope to the other 46 countries on the LDC list, especially given the global circumstances in which Vanuatu achieved this feat. The COVID-19 pandemic has effectively stalled worldwide markets and further excluded many LDCs from international supply chains. With the encouragement of Vanuatu’s graduation from the LDCs list during a global pandemic, hope for the four countries scheduled for graduation in the near future increases alongside support from the international community to ensure an eventual zero countries on the LDCs list.

Caroline Mendoza
Photo: Flickr

Tuvalu Poverty RateConsisting of nine small islands in the South Pacific, Tuvalu is known for its social programs and fiscal resilience. However, the Tuvalu poverty rate remains a large impediment to the nation’s development.

Being one of the smallest countries in the world, the country remains in isolation and depends significantly on imports such as food and fuel. With poor natural resource endowments other than fisheries, the Tuvalu poverty rate can be attributed to the minuscule opportunities for monetary gain and the dependence on the outside world.

The most recent record of the poverty rate in Tuvalu was in 2010, placing 26.3 percent of the country’s population below the poverty line. While poverty has declined in the country since the mid-1990s, the lack of local employment opportunities has manifested in high levels of unemployment, which increases the burden of low earnings.

In addition to low employment rates, climate change has also had a significant effect on the people living on Tuvalu’s islands. A recent study found that a significant proportion of individuals living on the islands suffered monetary losses due to natural disasters. Cyclone Pam, the natural disaster that swept over the island in 2015, proved this, as 45 percent of the nation’s population was displaced due to the storm’s effects.

With the highest point of the Tuvalu islands only reaching 4.6 meters above sea level, the country is vulnerable to and significantly impacted by the increased magnitude and frequency of natural disasters. With the poor investing their earnings in their homes, durable goods and furnishings, they are that much more threatened by storm surges and the floods associated with them.

Therefore, while the poverty rate has been decreasing in recent years across the Tuvalu islands, climate change negatively threatens the future livelihoods of the native population and further deepens the levels of poverty.

With the increasing threat from the waves surrounding the islands, more needs to be done to reduce the chance of future impacts. Aso Ioapa, a citizen from Tuvalu, noted that “We have to face that we might have to go to another place. That is hard. But migration is the last option. We want to save our countries.”

Tuvalu citizens will continue to do just that; save the country they love. The ADB country operations business plan emphasizes this. The 2017-2019 plan aims to improve fiscal management, communication services, and island port facilities while also building disaster resilience for Tuvalu.

If the country continues to improve its employment opportunities and address the climate change issues, the Tuvalu poverty rate will continue to reduce over time.

Tess Hinteregger

Photo: Flickr