What Are Least-Developed Countries (LDC)?

Least-developed countries (LDCs) (sometimes referred to as less-developed countries) are underdeveloped countries that face significant structural challenges to sustainable development. The UN's list of LDCs currently comprises 46 countries.

Key Takeaways

  • Least-developed countries are low-income countries that face significant structural challenges to sustainable development.
  • The United Nations Committee for Development Policy created measures to help LDCs gain access to and benefit from international support.
  • As of October 2021, the U.N.'s list of LDCs contained 46 countries.

Understanding Least-Developed Countries

Least-developed countries are highly vulnerable to economic and environmental shocks and have fewer human assets than other nations. In some cases, least-developed countries are referred to as "emerging markets." LDCs have access to specific international support measures for development assistance and trade that are not available to more developed nations.

The U.N.'s Committee for Development Policy (CDP) Secretariat of the Department of Economic and Social Affairs/Department of Economic and Social Affairs (DPAD/DESA) created measures to help LDCs gain access to and benefit from international support. The secretariat is responsible for reviewing the status of LDCs and monitoring their progress after they graduate from the LDC category.

The secretariat’s criteria for placing nations on its list of least-developed countries include the categories of income, human assets, and economic vulnerability:

  • Income thresholds are $1,018, which is set at the three-year average of gross national income (GNI) per capita. The graduation threshold is 20% higher at $1,222.
  • Human assets are calculated using five indicators, grouped into a health and education subindex.
  • The economic vulnerability index measures structural vulnerability to economic and environmental shocks, with a high level of vulnerability, which indicates major structural impediments to sustainable development.

List of Least-Developed Countries

Forty-seven countries comprised the United Nations list of LDCs, as of Sept. 2020:

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Image by Sabrina Jiang © Investopedia 2021

In March 2018, the CDP recommended that Bhutan, Kiribati, São Tomé and Príncipe, and the Solomon Islands graduate from the LDC category by the year 2024. This endorsement was unprecedented at the time, as never before had the committee recommended so many countries for graduation at a single review. In the 47 years that the LDC category has existed, only five countries have graduated: Botswana, Cabo Verde, Equatorial Guinea, Maldives, and Samoa. The committee has also scheduled Angola for graduation in 2024.