LDC Identification Criteria & Indicators | Economic Analysis and Policy Division

LDC Criteria

The Committee for Development Policy (CDP) is mandated by the General Assembly (GA) and the Economic and Social Council (ECOSOC) to review the list of LDCs every three years and to make recommendations on the inclusion and graduation of eligible countries using the following criteria:

Income

Human Assets

Economic and Environmental Vulnerability

Application and Indicator Selection

Countries are eligible to enter or leave the LDC category if they meet the defined inclusion or graduation thresholds of the criteria. The graduation thresholds are set higher than the thresholds for inclusion. This asymmetry aims to ensure that graduation is sustainable.
Each of the three criteria is measured using key indicators which reflect long-term structural handicaps. These indicators are chosen on the basis that they are methodologically robust, maintain stability of the criteria, ensure equal treatment of countries over time, and are frequently updated for all countries. They are periodically revised to reflect improved data availability and insights from new research.
The Paper on the "Outcome of the comprehensive review of the LDC criteria" adopted at the CDP Plenary in 2020 can be accessed here.
The "Handbook on the Least Developed Country Category provides additional information on the LDC criteria and their indicators. Download the handbook here.

Gross national income (GNI) per capita

Rationale

GNI per capita provides information on the income status and the overall level of resources available to a country

Thresholds

The inclusion threshold is set at the three-year average of the level of GNI per capita, which the World Bank defines for identifying low-income countries. The threshold for the 2024 review is $1,088.
The graduation threshold is set at 20 per cent above the inclusion threshold and is $1,306 for the 2024 review.
The income-only graduation threshold is set at three times the graduation threshold and is $3,918 for the 2024 review.

Methodology

GNI is calculated from national accounts data converted into USD using the World Bank Atlas method (to reduce impact of short-term exchange rate fluctuations)
GNI per capita is derived by dividing GNI in USD by the annual population of a country

Data sources

GNI per capita is calculated by the United Nations Statistics Division on the basis of its National Accounts Main Aggregates Database
Population data are taken from the United Nations Population Division

Human Assets Index (HAI)

Rationale

The HAI is a measure of level of human capital
Low levels of human assets indicate major structural impediments to sustainable development
A lower HAI represents a lower development of human capital

Thresholds

Since 2015 the CDP uses absolute thresholds for the HAI to determine inclusion and graduation eligibility
The inclusion threshold has been set at 60
The graduation threshold has been set at 10 per cent above the inclusion threshold at 66

Composition

The HAI is composed of six indicators grouped into a health and education subindex with each indicator carrying an equal weight of 1/6
Original values for each HAI indicator are converted into index numbers using a max-min procedure

Economic and Environmental Vulnerability Index (EVI)

Rationale

The EVI is a measure of structural vulnerability to economic and environmental shocks
High vulnerability indicates major structural impediments to sustainable development
A higher EVI represents a higher economic vulnerability

Thresholds

Since 2015 the CDP uses absolute thresholds for the EVI to determine inclusion and graduation eligibility
The inclusion threshold has been set at 36
The graduation threshold has been set at 10 per cent below the inclusion threshold at 32

Composition

The EVI is composed of eight indicators, grouped into an economic and environmental subindex with each indicator carrying an equal weight of 1/8
Original values for each EVI indicator are converted into index numbers using a max-min procedure