LESOTHO’S failure to meet development criteria means the country will not graduate from the ranks of Least Developed Countries (LDC) at least until the year 2025, a United Nations official has said.
United Nations Conference on Trade and Development (UNCTAD) Economic Affairs Officer, Giovanni Valensisi said this during yesterday’s launch of UNCTAD’s Least Developed Countries Report 2016 The path to graduation and beyond: Making the most of the process in Maseru.
Mr Valensisi further stated that out of the current 48 LDC countries, only 16 were on track towards graduating from the LDC status to a higher level from 2017 to 2024, while Lesotho and the rest may only graduate beyond 2025.
The United Nations currently runs the Istanbul Programme of Action (IPoA) aimed at helping LDCs achieve developmental goals, with a target of ensuring half of the LDCs graduate by 2020.
LDCs are defined by the United Nations on the basis of criteria which considers Per-Capita Income Index, Human Asset Index, and Economic Vulnerability Index.
Under per-capita income index, a threshold of US$1,242 for cases of graduation from LDC status is considered; under Human assets, a composite index (the Human Assets Index) based on indicators of (i) nutrition (percentage of undernourished population); (ii) health (child mortality ratio); (iii) school enrolment (gross secondary school enrolment ratio); and (iv) literacy (adult literacy ratio) are used; while under the Economic vulnerability, a composite index (the Economic Vulnerability Index) based on indicators of (i) natural shocks (index of instability of agricultural production; share of victims of natural disasters); (ii) trade-related shocks (index of instability of exports of goods and services); (iii) physical exposure to shocks (share of population living in low-lying areas); (iv) economic exposure to shocks (share of agriculture, forestry and fisheries in GDP; index of merchandise export concentration); (v) smallness (population in logarithm); and (vi) remoteness (index of remoteness) is used.
According to the report, Lesotho only met the per capita income criterion with its per capita income of US$1,374 which is above the threshold. It was not far off in the second criteria while it missed he third one and this was blamed on its landlocked and remote characteristics.
In response, acting Development Planning Minister, Joshua Setipa said the country could only develop in the context of economic regional integration.
“The only way we can grow this economy is if we are part of a collective,” Mr Setipa said, adding, “So, regional integration is very important economically”.
“This means that our focus should be on getting trade barriers between us and our neighbours and the rest of Africa out of the way so that we can trade.
“For example, if you consider the structure of our exports in the apparel sector, 65 percent of our products go to the United States while 35 percent are exported to the region.
“We are also exporting plated metal to Ghana where the average duty is 19 percent. So, regional integration has to happen if we are to drive growth of our economy because if in Ghana we face 19 percent import duty and in America we face zero import duty, it says that we are missing something there,” he said.