Classifying Poor and Rich Countries 2

Least Developed Countries (LDCs), which includes the poorer developing countries from the South that lack infrastructure, social services and which have a very low per capita income. These countries usually require specific measures to be able to get out of poverty.
Some LDCs can also belong to other categories, such as Landlocked Developing Countries (LLDCs). These are developing countries with no direct access to the sea; their situation calls for specific policies as they experience difficulties in integrating themselves into the world market or are particularly vulnerable because of their geopolitical situation.

Criteria used to identify an LDC

In its triennial review of the list of Least Developed Countries in 2003, the Economic and Social Council of the United Nations (ECOSOC) used the following three criteria, as proposed by the Committee for Development Policy (CDP), to identify LDCs:

• a low-income criterion, based on a three-year average estimate of the gross domestic product per capita (under $750 for inclusion, above $900 for graduation);
• a human resource weakness criterion, involving a composite Augmented Physical Quality of Life Index (APQLI) based on indicators of (a) nutrition, (b) health, (c) education, and (d) adult literacy; and
• an economic vulnerability criterion, involving a composite Economic Vulnerability Index (EVI) based on indicators of (a) the instability of agricultural production, (b) the instability of exports of goods and services, (c) the economic importance of non-traditional activities (share of manufacturing and modern services in GDP), (d) merchandise export concentration, and (e) the handicap of economic smallness (as measured against population in logarithm). The percentage of the population displaced by natural disasters is also taken into account.