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 (LDCs), 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 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 LDCs 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 LDCs according to the United Nation's specific criteria and procedures and confirmed by a resolution of its 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 and now represents about 40 percent of the developing countries. This covers 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. 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 relatively 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 “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 category 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. In two chapters, Guillaumont explores, in great detail, the evolution of the way in which LDCs are identified and how that procedure changed over time. In a way, this is the history of the Committee for Development Planning (CDP) (which later became the Committee for Development Policy) of the United Nations – a group to which the book's author belonged for many years. The book thus reflects the decades of work and discussions in the CDP about the LDC category for which no better author could have been found. The refinements of the initial identification criteria are described, as are the rules for triennial reviews of the list, and the more recent focus on the specific vulnerability of LDCs.
Currently, four types of quantitative criteria are being used to identify LDCs: population; per capita gross national income (GNI); human assets index (including the subcategories education; nutrition; health); and economic vulnerability index (including export concentration; instability of exports of goods and services; instability of agricultural production; homelessness; share of agriculture, forestry and fisheries in GDP; remoteness from main world markets). Accordingly, developing countries must meet four criteria to be eligible for inclusion on the list of LDCs:
- 1.
population of 75 million or less;
- 2.
per capita GNI;
- 3.
the human assets index value are below a certain threshold; and
- 4.
the economic vulnerability index value is above a certain threshold.
Similarly, there are four but different criteria for LDCs to be eligible for graduation (exclusion) from the list:
- 1.
the threshold for per capita GNI increased to 20 percent over the inclusion criterion;
- 2.
the thresholds for the human assets;
- 3.
economic vulnerability index decreased to 10 percent over the inclusion criteria; and
- 4.
a special vulnerability profile is undertaken for countries meeting the graduation criteria.
A high per capita GNI – at least twice the graduation threshold – would be considered a sufficient single graduation criterion.
This difference between (or even inconsistency of) the inclusion and the graduation criteria reflects two problems in evaluating the development status: there could be more quantities at stake in defining poverty and underdevelopment, and qualitative judgment could be needed in addition to pure quantitative judgment. With the suggestion by the CDP to graduate the Maldives from the list, these potential conflicts came explicitly to the floor: the government of the Maldives declined the suggestion with the argument that climate change would threaten the stability of the country. As there is no generally accepted environmental (or climate) indicator available so far, none is used in the LDC procedure. To develop a structural environment indicator in the future would be one option; to provide a more detailed qualitative country profile would be another option.
Guillaumont knows about this deficiency, but is more concerned with the rationale of the LDC category as such – and defends it with all his intellectual capability. In three chapters he looks for the justification of the theoretical and empirical foundations of the criteria used by the CDP, compares the human assets of LDCs with those of other developing countries, and assesses the economic vulnerability of the LDCs in great detail.
A declining number of LDCs is the essential goal of the category. A substantial decline in this number would suggest that policies towards the LDCs have been succeeding, just as the previous increases implied that such policies were failing. However, factors such as scarcity of natural resources, climate change, domestic policies and civil conflict are likely to affect the eligibility of developing countries for inclusion (or graduation). That makes the prospects for the LDC category somewhat unclear. Therefore, Guillaumont addresses possible future options: expanding the list; shrinking the list; maintaining the size of the current list. This chapter makes exciting reading – that's why this reviewer will not reveal the personal preference of the author. What should be revealed, however, are the great efforts made by the author to further refine the identification criteria and to look for their possible combination, including the question of whether, in future, a synthetic “least likely to develop index” should be designed.
In the final chapter of the book, Guillaumont makes a strong plea for enhancing the consistency of the LDC category. No doubt, the category has a clear rationale. It aims to identify poor countries facing particularly severe structural handicaps to economic growth – obstacles that are more or less independent of policy and that make these countries likely to remain poor even in the long‐term. The logical and empirical foundations of the LDC category also seem well‐established, but a problem remains: that of consistency in the list over time. An inconsistency (or even discordance) results from the present asymmetrical rules for applying the inclusion and graduation criteria. Patrick Guillaumont has written a seminal, well‐documented book on the LDCs. Nobody else should be better qualified to convince the United Nations to rectify this inconsistency. So, it's good to hear that a companion book is already in the making: to use low human assets and high vulnerability as major criteria for more specifically allocating international aid for developing countries to escape from the poverty trap. If the respective future vulnerability index would include environmental assets, this approach (and that of the book) could make a major contribution to the other main challenge of our times, the international efforts of mitigation and adaptation to climate change – and so help to escape from the climate trap.
