Caught in a Trap. Identifying the Least Developed Countries

Abstract

CAUGHT IN A TRAP. IDENTIFYING THE LEAST DEVELOPED COUNTRIES by Patrick Guillaumont, Paris: Economica, 2010, xiv + 386 pp., $ 54,95, ISBN-13: 978-2717857993 In the course of reading this book, Haiti was hit by a heavy earthquake. Instantly one looks for answers to such vulnerability. Could this book perhaps help to explain why so many people had to die when the Earth had trembled? First of all, Haiti is on the list of least developed countries, and ranks poorly on all the indicators used to define that list: it has a low average income, a low value for the human assets and a high value for the economic vulnerability index. In the comprehensive ranking, however, Haiti is not at all the worst case. But one aspect is striking: while most of the other least developed countries became politically independent only in the 1960s and 1970s, Haiti has been independent since 1804! Still, the country seems not to be in a position to handle major challenges --it is definitely caught in a poverty trap. Patrick Guillaumont starts his book with the basic question--"what are the least developed countries"--and gives the final answer right away. Today, 49 countries make up the category of least developed countries (LDCs), according to specific criteria and procedures, and as confirmed by a resolution of the UN General Assembly. Countries in that category are low-income countries that suffer from severe structural handicaps to growth, particularly low human resources and high economic vulnerability. In the years since the LDC category was established, the number of countries on the list has doubled, now representing about 40 percent of the developing countries, with more than 750 million people or 11.8 percent of world population. By contrast, their Gross Domestic Product (GDP) is just 0.7 percent of world GDP and 3.2 percent of the GDP of all developing countries on an exchange rate basis (UNDP 2007). Compared on the basis of purchasing power parity, the differences are a little smaller, with the LDCs share at about 1.8 percent of world GDP and 4.0 percent of the developing country GDP. Most LDCs are small or medium-sized in population, are located in Africa, are land-locked, insular or arid. Haiti is the only Latin American country among the LDCs. In the literature and in international relations, other (unofficial) structural categories of developing countries are being used. While the LDCs are an official category of the United Nations, "low-income countries" is a classification established empirically each year by the World Bank, making a group of 60 or more. Another category used, this one geographical, is that of the "small island developing countries", which has about 50 members, 36 of them independent states. A final structural category is that of the "land-locked developing countries", 28 in number. Furthermore, there are three political categories of developing countries that partly overlap with the LDC category: the "African, Caribbean and Pacific countries"; the "heavily indebted poor countries"; and the "low-income countries under stress", now included in the broader 'fragile states' group. For 2005, 46 countries were classified as fragile states according to an OECD approach and 35 according to the World Bank. The link between the categories of LDCs and fragile states can seem critical, insofar as the LDC category basically refers to structural features while the fragile states category refers to policy and governance indicators, more likely to change over time. In sum, the LDC is a structural category, not designed to reflect present policy and its assessment. As such it is rather stable, though not permanent. Countries are likely to join or exit from the list according to trends in their structural features; these features are only progressively influenced by policy, yet they influence policy. The official recognition of the LDCs as a special category of developing countries by the United Nations took place as early as 1971. …