Least Developed and Landlocked Developing Countries

6.1 Definition of the Least Developed Countries (LDCs)

According to United Nations Department of Economic and Social affairs least developed countries (LDCs) are low-income countries confronting severe structural impediments to sustainable development. They are highly vulnerable to economic and environmental shocks and have low levels of human assets.

• There are currently 44 countries on the list of LDCs which is reviewed every three years by the Committee for Development Policy (CDP).
• LDCs have exclusive access to certain international support measures in particular in the areas of development assistance and trade.

The low level of socio-economic development in LDCs is characterized by historically weak development capacity, low and unequally distributed income and scarcity of domestic financial resources. LDCs typically rely on agrarian economies which subsequently can be affected by a vicious cycle of low productivity and low investment, especially as wealthier countries develop and utilize more productive farming technologies. Generally, LDCs rely on few primary commodities as major sources of exports and fiscal earnings, causing them to be vulnerable to external terms-of-trade shocks. Some LDCs have been able to diversify into the manufacturing sector though often remain limited to products in labor-intensive industries, such as textiles and apparel.

These development constraints are responsible for insufficient domestic resource mobilization, low economic management capacity, weaknesses in programme design and implementation, chronic external deficits, high debt burdens and heavy dependence on external financing in LDCs.

LDC CRITERIA: 

Income (GNI): Countries must have an average per capita income of below USD$1,088** (2024 review) for inclusion, and above USD$1,306** (2024 review) for graduation;

Human Assets (HAI): Countries must also have a low score on the Human Assets Index, a tool that measures health and education outcomes, including under-five mortality rate, maternal mortality, adult literacy rate and gender parity for secondary school enrolment;

Economic and Environmental Vulnerability (EVI): Countries must score high on the Economic and Environmental Vulnerability Index, which measures factors like remoteness, dependence on agriculture and vulnerability to natural disasters.

To be classified as an LDC, a country must satisfy all three criteria and agree to the classification.

Landlocked Developing Countries (LLDC)

LLDCs are developing nations that lack territorial access to the sea.

United Nations Convention on Laws of Sea (UNClos)1982 Article 124 (a) defines land-locked state as a State which has no sea-coast

Problems of the Least Developed Countries (LDCs)

Many LDCs face political instability, internal conflicts, and armed violence, which hinder their development efforts. Countries such as Nepal, Sudan, Afghanistan, Somalia, Central African Republic, and South Sudan have experienced such challenges. Sustainable political stability is difficult to achieve without addressing underlying economic problems.

In addition, LDCs have limited capacity to respond to climate change. Major climate-related challenges include glacier and snow melt in Asia's mountain regions, rising sea levels in Pacific island nations, and increasing desertification and food insecurity in Africa.

• Weak Economic Growth: Economic growth in LDCs has slowed in recent years. Average growth declined from 6.6% during 2001–2010 to 4.7% during 2011–2019. This slower growth has limited improvements in living standards and widened the gap between LDCs and faster-growing developing economies in Asia. The COVID-19 pandemic further weakened economic performance in 2020 and 2021, leading to increased poverty and slowing development progress.
• Rising Debt: Even before the COVID-19 pandemic, LDCs faced increasing debt levels, limiting their ability to fund essential services such as healthcare and education. Debt servicing costs more than tripled between 2011 and 2019, and the pandemic further increased repayment obligations. As a result, many countries struggle to finance poverty reduction programs and infrastructure development.
• Limited Role in Global Trade: LDCs account for only about 1% of global merchandise exports. Many remain heavily dependent on a few primary commodities, such as oil, cotton, and copper. This dependence makes them vulnerable to price fluctuations, which can reduce export earnings, employment, and government revenue.
• Energy Poverty: More than half of the population in LDCs lacks access to electricity, particularly in rural areas. Even where electricity is available, supply is often unreliable. Limited access to energy hinders economic growth and affects essential services, including healthcare and education.
• Climate Vulnerability: Although LDCs contribute very little to global greenhouse gas emissions, they are among the most affected by climate change. These countries experience a large share of climate-related disasters and deaths, despite having a much smaller carbon footprint than developed nations. This highlights the unequal impact of climate change on vulnerable populations.

Rights of Landlocked Developing Countries (LLDCs)

UNCLOS 1982 Article 125: Right of access to and from the sea and freedom of transit

1. Land-locked States shall have the right of access to and from the sea for the purpose of exercising the rights provided for in this Convention including those relating to the freedom of the high seas and the common heritage of mankind. To this end, land-locked States shall enjoy freedom of transit through the territory of transit States by all means of transport.

2. The terms and modalities for exercising freedom of transit shall be agreed between the land-locked States and transit States concerned through bilateral, sub regional or regional agreements.

3. Transit States, in the exercise of their full sovereignty over their territory, shall have the right to take all measures necessary to ensure that the rights and facilities provided for in this Part for land-locked States shall in no way infringe their legitimate interests.

6.4 Challenges of the Landlocked Developing Countries (LLDCs)

Lack of territorial access to the sea, isolation from world markets and high transit costs continue to impose serious constraints on the overall socio-economic development of Landlocked Developing Countries (LLDCs).The challenges/problems can be broken down into three major pillars:

1. Geographical & Infrastructure Barriers

Geographical Isolation & No Sea Access: Lacking direct access to maritime trade routes, LLDCs are entirely dependent on transit neighbors to reach international markets. This fundamental vulnerability inherently complicates and restricts trade logistics.

Severe Remoteness from Global Hubs: Many LLDCs are located far from major economic centers. This massive physical distance translates directly into prolonged transit times and inflated shipping expenses.

Substandard Infrastructure Networks: Inadequate roads, poorly maintained railways, and outdated border facilities create physical bottlenecks that disrupt the fluid movement of freight and cause severe logistical delays.

2. Trade, Transit, & Border Complications

Prohibitive Transport & Logistics Costs: Long distances to seaports combined with unavoidable transit fees and high insurance premiums inflate the final cost of goods, heavily undermining the global competitiveness of LLDCs.

Complex Border & Customs Bureaucracy: Inefficient border-crossing procedures, redundant documentation, and complex customs regulations result in costly administrative delays at checkpoints.

Asymmetric Transit Dependence: LLDCs rely heavily on the political stability, goodwill, and infrastructure of neighboring countries. Because these transit nations are often developing economies themselves, they frequently suffer from similar infrastructure deficits and economic constraints.

3. Structural Economic & Development Vulnerabilities

Over-Reliance on Primary Commodities: The export profiles of LLDCs are typically dominated by a narrow range of raw materials, agricultural products, or minerals. This lack of diversification leaves their economies highly exposed to volatile global market prices.

High Trade Concentration: Economic risk is amplified by a concentration of exports in only a handful of products or markets, leaving the entire nation vulnerable to external shocks or a decline in demand from a single trading partner.

Stifled Investment & Suppressed Growth: The financial burden of high trade costs deters Foreign Direct Investment (FDI), starves domestic industries of capital, and stifles industrial development.

Pervasive Poverty & Low Human Development: Cumulatively, these economic barriers translate into broader societal challenges, including entrenched poverty, high unemployment rates, low labor productivity, and lagging social development metrics compared to coastal nations.