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

Foreign aid is very important to many less-developed countries (LDCs) around the globe. It can have a substantial effect on their improvement by providing much-needed programs that provide jobs, healthcare and sustainability to the regions of the globe that need it most. Providing aid to LDCs can also promote positive outcomes for the country giving aid.

Here are 10 reasons why providing foreign aid to LDCs is so important:

  1. It can be used as humanitarian aid. This form of aid is generally given during times of great distress such as natural disasters until the state can support the disaster relief effort. The European Consensus on Humanitarian Aid categorizes humanitarian aid as a “…needs-based emergency response aimed at preserving life, preventing and alleviating human suffering, and maintaining human dignity wherever the need arises if governments and local actors are overwhelmed, unable, or unwilling to act.”
  2. It can help LDCs fight against diseases such as HIV/AIDS. HIV and AIDS are still a major threat in countries such as Africa and require support from other countries willing to help with the crisis. Organizations and governments around the globe, such as UNITAID and PEPFAR, provide aid to help fight HIV/AIDS in LDCs. A new plan submitted by UNAIDS projects the end of the HIV epidemic as a public health threat by 2030. The new plan would need $26.2 billion by 2020 and an additional $22.3 billion by 2030 to eliminate the disease.
  3. It helps with economic growth in LDCs. Aid is generally given in countries that are characterized as low income or that have high unemployment rates. This results in low savings and investments, meaning the capital stock is small. Countries that are provided aid need rapid economic development. Providing aid stimulates the growth of the world economy along with promoting economic development within the region.
  4. It can help with market expansion. Providing aid to a country could mean the expansion of goods and resources that can be shared between the two countries. This can attract new investors into the country further improving the LDCs economy.
  5. It helps with basic infrastructure in LDCs. Another key component to promoting a strong economy is the expansion of a well-developed infrastructure. Basic necessities such as transport, communication, power, education, health services and industry serve as key components to building a strong and long-lasting infrastructure.
  6. It helps promote improvements in agriculture. Aid can be used to teach farmers how to utilize their land and resources more efficiently to produce more crops. This, in turn, provides vitamin and nutrient giving foods to people living in LDCs.
  7. It can help with poverty relief. In 2013, 767 million people (10.7 percent of the world population) lived on less than $1.90 a day, well below the world poverty line. This is a drastic improvement from the 1.85 billion in 1990 and the number has gotten significantly better over the years. However, there is still much to do. Many of the global poor live in rural areas where they do not have access to adequate medical treatment and education.
  8. It helps LDCs grow and become more independent. By providing aid to promote health, education, and infrastructure, LDCs can focus more on growing their economies. By reducing the amount of disease and poverty, citizens of these regions will be able to flourish and contribute to the growth of the country.
  9. It promotes political ties. Aid can be used to establish and strengthen the connection between the donor and recipient countries. Aid is given to both LDCs and developed countries alike to promote solidarity and companionship.
  10. It makes the world safer. Providing LDCs with aid and development reduces the threat of terrorist organizations by alleviating poverty in susceptible countries. A study provided by the RAND Corporation concluded that development is a more effective strategy against terrorism than military force.

Providing foreign aid is, first and foremost, a humanitarian gesture. The aid’s ultimate goal is to support or stabilize an LDC until it is capable of supporting itself. When aid is provided, there are benefits for all participating nations involved way. In most developed nations, foreign aid is still an important part of the legislation and the conversation.

Drew Hazzard

Photo: Flickr