51吃瓜

Least Developed Countries (LDCs) in the Asia-Pacific region have generally demonstrated socioeconomic progress over the past decades, despite being among the most vulnerable and structurally disadvantaged countries. Among the seven LDCs scheduled to graduate by 2026, five (Bhutan in 2023, the Solomon Islands in 2024, and Bangladesh, Lao People’s Democratic Republic and Nepal in 2026) are from the Asia-Pacific region (UNCDP, 2021). Although graduation is a development milestone, the transition gives rise to concerns that these countries may lose access to various international support measures (ISMs) associated with LDC status. The paper finds that because AP LDCs rely more on tariff preferences for their competitive strength and have less financial support and compliance capacity, graduation and the associated loss of LDC-specific preferential tariffs and financing could pose challenges for their firms’ ability to invest in ESG-related issues. Although bilateral and multilateral donors more often do not consider LDC status a precondition for development assistance, post-graduation, AP LDCs may face challenges accessing some LDC-specific funds unless the terms of engagement are adjusted as the number of graduates grows and the LDC club shrinks. Overall, graduation may not impose major constraints on trade and financial flows for most AP LDCs. Apart from Bangladesh, the impact of graduation is likely to be limited. The paper suggest that there are ways to extend ISMs to graduating AP LDCs for graduation-related adjustments. These should include, among others, continuing any market access preferences; improved terms for preferential schemes for non-LDC and/or graduated developing countries; more concessional financing backed by an improved absorption capacity; and external support and internal actions to confront development challenges that persist beyond graduation