Bhutan is on its way to graduate from the Least Developed Countries (LDC) status by June 2023, according to The Bhutan Live, citing senior officials.
To graduate the status, countries are expected to follow a smooth transition strategy. Macroeconomic stability, product space diversification, and disaster resilience are some of the parameters recommended for inclusion in Bhutan's transition strategy.
According to officials, a change in Bhutan's status will not affect the country's foreign aid support. The graduation's impact will mainly be seen in three LDC-specific international support measures (ISM) related to international trade, development cooperation (ODA) and contributions to the funding of the UN system, support for travel to official meetings, scholarships, and research grants.
According to The Bhutan Live, Bhutan currently benefits from LDC-specific preference schemes granted by developed countries under the Generalised System of Preferences (GSP) scheme, which provides for tariff exceptions, and duty-free and quota-free (DFQF) market access such as in EU and Japanese markets.
LDC status is also provided with flexibility for required commitments for World Trade Organisation (WTO) accession.
"While graduation will have negative implications for access to the LDC fund created under the UNFCCC, Bhutan will remain eligible for the Green Climate Fund (GCF), Global Environment Facility (GEF) trust fund, the special climate fund, and the adaptation fund," a Bhutanese official said, as quoted by The Bhutan Live.
Bhutan will be excluded from the priority group of the GCF, it said.
According to officials, graduation will not affect the country's contributions to the UN's regular budget. However, there won't be any benefits of LDC for travel assistance provided by the UN and some of its agencies to participate in official meetings.
LDC graduation clearly indicates that there has been an improvement in the social and economic performances of the country and is therefore considered a stable environment for foreign direct investments.
According to The Bhutan Live, the fulfillment of the three graduation criteria means that the country has a healthy socio-economic ecosystem and enhanced creditworthiness.
Officials from the finance ministry said that the country would not be dependent on donor funding for its development needs which means the government has to raise its own resources.
"We will achieve greater self-reliance, especially in financing requirements. In the long run, Bhutan's stature in the international organisations will enhance," the official said as quoted by The Bhutan Live.
As of now, there are 46 countries that come under LDC status. Nine of them are in Asia, including Nepal, Bangladesh, Myanmar, and Nepal among others. (ANI)