Responses by International Organizations

Survey on International Support Measures specific to the Least Developed Countries (LDCs) related to Multilateral Official Assistance (ODA) Responses by International Organizations Summary and Analysis prepared by the United Nations Department of Economic and Social Affairs (DESA) and the Committee for Policy (CDP) Secretariat* Abstract This report focuses on the survey conducted by the Secretariat of the Committee for Policy (CDP) and addressed to multilateral organizations to collect information on the various types of support measures made available to LDCs. Eighteen multilateral organizations participated in the survey. Their responses indicate that a unified approach is still lacking despite the fact that many organizations have developed and implemented LDC-specific support measures. The international community has recognized LDCs as countries in need of special assistance to overcome their structural handicaps, nevertheless, some organizations have not yet fully acknowledged the category in their work programmes or have not adjusted their programmes to the international development strategy adopted for these countries by the various UN Conferences on LDCs. Similarly, responses to the survey reveal that multilateral donors need to apply a more consistent approach in assisting graduating LDCs to ensure a smooth transition out of the category. This would include the adoption of more formal guidelines and procedures to phase out the LDC-specific support measures upon a country s graduation from the category. In some instances, however, such changes may require the approval of these organizations respective governing bodies. Table of contents: A. Background...2 B. LDC support extended by multilateral organizations...2 C. Support from multilateral organizations to LDCs graduating from the category... 7 D. Conclusions...8 * This summary was prepared by the DESA/CDP Secretariat, based on the responses to a survey on International Support Measures specific to the Least Developed Countries (LDCs), submitted by international organizations. The content, findings, interpretations, and conclusions as expressed in this summary reflect the views of its authors and do not necessarily represent the views of the United Nations, or the organizations that responded to the survey. The views presented in this document should not be considered as the official position of the United Nations or the organizations that responded to the survey. March 2012 1

A. Background The category of the least developed countries (LDCs) was established in 1971 as a special group of low-income developing countries facing structural impediments to growth, and requiring special measures for dealing with those problems. This report focuses on international support measures provided by multilateral development partners to those countries belonging to the LDC category. Information on international support measures offered to LDCs is spread over a wide range of sources, and thus, is not always easy to locate. Support measures provided by bilateral and multilateral donors and trading partners pertain to: international trade, official development assistance, including development financing, and technical cooperation, and other forms of assistance. 1 Various multilateral organizations provide LDCspecific financial and technical assistance. This support may fall into any of the following categories: (i) Substantive support (research and policy analysis) and advocacy for LDCs, (ii) Caps on LDC contributions to the budgets of international organizations, (iii) Allocation of a given share of the organization s budget to LDCs, and (iv) Targeted funds and technical cooperation programmes and financial support for facilitating LDC participation in UN meetings. In his effort to provide background information on LDC identification, the Secretariat of the Committee for Policy (CDP) 2 initiated a multi-year capacity building project to assist in developing graduation strategies for LDCs. 3 One major project objective was to document the international support measures that were specifically offered to LDCs by the international community, including those measures related to the smooth transition from the category. Several surveys 1 Preliminary research by the Committee for Policy (CDP) Secretariat on the existing support measures are documented in: Committee for Policy (2008). Handbook on the Least Developed Country Category: Inclusion, Graduation and Special Support Measures. (UN sales publication, No. E.07.II.A.9) 2 The Committee for Policy is a subsidiary body of the United Nations Economic and Social Council and is responsible, among other things, for the triennial review of the list of least developed countries. 3 See www.un.org/en/development/desa/policy/cdp/ldc_project.shtml were designed to collect the relevant information. This report focuses on the survey addressed by the CDP Secretariat to 39 multilateral organizations to collect further details about the various types of support measures that each organization had made available to LDCs. As of 1 May 2011, a total of 18 international organizations had responded to the survey (see Annex). Summaries of the individual responses are available at: www.un.org/ldcportal. Information thus gathered from the responses was complemented by further research conducted by the CDP Secretariat. B. LDC support extended by multilateral organizations The United Nations Secretariat and a number of other international organizations have recognized the LDC category and established specific provisions, activities or programmes for countries belonging to that list. 4 However, there are important variations in the type and level of LDC-specific assistance offered by international organizations. Support ranges from the UN Capital Fund (UNCDF), which spends most of its resources on LDCs, and the UN Office of the High Representative for the Least Developed Countries, Landlocked Developing Countries and Small Island Developing States (UN- OHRLLS), which was created by the General Assembly to undertake advocacy work in favour of the LDCs, Landlocked Developing Countries (LLDC), and Small Island Developing States (SIDS), to organizations that do not have a formal mandate related to development assistance for LDCs and/or do not provide any specific support measures to this group of countries. Most international organizations participating in the survey recognize the LDC category in their resource contributions or allocations in one way or another; 5 the World Bank, the Asian Bank (AsDB), the International Monetary Fund (IMF), and the Joint United Nations Programme on HIV/AIDS (UNAIDS) are exceptions. 4 See: CDP (2008), op. cit. section II. The WTO has established various special treatments and rules regarding LDCs but these are covered elsewhere on the Portal under trade-related support measures. 5 These 14 organizations are: ESCWA, FAO, IAEA, ILO, IPU, ITC, UNCTAD, UNEP, UNFPA, UN-HABITAT, UNICEF, UNIDO, WMO, and WFP. 2

The next section examines the extent to which international organizations take the LDC category into consideration with respect to assessment rules on Member States contributions to their budget and in terms of resource allocation. This will be followed by a review of LDC-specific funds for technical assistance and travel made available for LDCs to attend international organizations meetings. 1. Organizations that take into account the LDC category in their budget contributions Budget contributions from LDCs LDC contributions to the regular budget of the United Nations Secretariat are capped at 0.01 per cent of the total UN budget, regardless of national income and other factors determining a Member State s assessment rate. There are currently 3 LDCs (Angola, Bangladesh and Sudan) benefiting from the budget cap. Without the assessment rule, these countries would have been required to contribute an additional $300,000 to $600,000 per country in the 2011 budget of the Organization. 6 Every LDC is also entitled to a 90 per cent discount in contributions to peacekeeping operations (i.e. they pay only 10 per cent of their regular budget rate). 7 The regular budget of the United Nations finances activities of the following entities: y Various Offices and Departments (UN Headquarters and UN Offices in Geneva, Nairobi and Vienna) y International Criminal Tribunals y UN Regional Commissions y Economic and Social Commission for Asia and the Pacific (ESCAP) y Economic and Social Commission for Western Asia (ESCWA) y Economic Commission for Africa (ECA) y Economic Commissions for Europe (ECE) y Economic Commission for Latin America and the Caribbean (ECLAC) 6 Based on the information provided by United Nations, Office of Programme Planning, Budget and Accounts. 7 See General Assembly resolution A/RES/55/235 on the scale of assessments for the apportionment of the expenses of the United Nations peacekeeping operations. y Counter-Terrorism Committee Executive Directorate (CTED) y Office of the United Nations High Commissioner for Human Rights (OHCHR) y Office of the United Nations High Commissioner for Refugees (UNHCR) y United Nations Conference on Trade and (UNCTAD) y United Nations Environment Programme (UNEP) y United Nations Human Settlements Programme (UN-HABITAT) y United Nations Office on Drugs and Crime (UNODC) y United Nations Relief and Works Agency for Palestine Refugees in the Near East (UNRWA) Additionally, fifty per cent of the regular budget of the International Trade Centre is also funded by the UN (the other 50 per cent is funded by the WTO). Apart from the UN Secretariat, a number of other multilateral organizations also have special rules regarding LDC contributions to their budgets, which are similar to the UN Secretariat budget assessment rules described above (see Table 1 below). Table 1: Rules on LDC contribution to the budgets of selected international organizations Entity Rule Contributions to the regular budget of the United Nations Secretariat are capped at 0.01 per cent of the total UN budget. UN Secretariat There is a 90 per cent discount in contributions to peacekeeping operations amounting to 10 per cent of the regular budget cape rate. ILO Capped at 0.01 per cent of the regular budget. Contributions of the LDCs whose contribution to the UN regular budget are IPU assessed at 0.0001 per cent are set at 0.1 per cent of the operating revenue. UNIDO Capped at 0.01 per cent of the regular budget. Set at 0.02 per cent of total assessed WMO contribution. Source: UN DESA/CDP Secretariat In the case of the International Atomic Energy Agency (IAEA), the organization s regular budget is assessed to each Member Country according to the UN s scale of assessment, which is used as the base rate for Members contributions. The IAEA s Member Countries 3

are grouped into 5 categories and each category receives a different level of partial relief of their assessment. For example, the so-called unshielded Members, which are largely high income countries, are required to pay 100 per cent of the base rates, while the shielded Members under category 4, most of which being LDCs, pay only 58 per cent of the base rates. All LDC Members in the IAEA enjoy the highest relief under category 4. The latter also includes non-ldc members, such as Nicaragua and Viet Nam. The Joint United Nations Programme on HIV/AIDS (UNAIDS), the United Nations Children s Fund (UNICEF) and the World Food Programme (WFP) are fully funded by voluntary contributions and do not have rules regarding assessments of Member contributions to their budgets. Budget allocations to LDCs On the expenditure side, several international organizations have rules or targets to earmark their resources to geographical or functional groups of developing countries, including the LDCs. For instance, the United Nations Programme (UNDP), UNICEF and WFP use numerical rules to earmark the allocation of their programme budget or extra-budgetary resources to LDCs. UNDP and UNICEF have budget targets of at least 60 per cent of their regular resources to LDCs, based on a system approved by their Executive Board. 8 In accordance with a 1994 decision by its governing body, WFP provides at least 50 per cent of its development assistance to LDCs. Various international organizations do not earmark their regular resources specifically for LDCs, but include the LDC category as a subset of their target groups. For instance, the Internatinal Trade Center (ITC) dedicates at least 50 per cent of its extra-budgetary resources to LDCs, LLDCs, and SIDS. However, only about one-third of ITC s extra-budgetary resources were actually spent in LDCs during the period 2007-2009. Similarly, the Food and Agriculture Organization (FAO) targeted at least 80 per cent of its Technical Cooperation Programme (TCP) to the 4 groups of developing countries designated by the organization: LDCs, low-income food-deficit 8 UNDP has not yet submitted its response to the CDP Secretariat but it has been estimated that 60 to 62 per cent of its core budget for the period 2004-2007 was targeted to LDCs. See CDP, op. cit. p.30. countries, LLDCs, and SIDS. During the period 2008 2010, between 48 and 58 per cent of FAO s TCP resources ($300-$420 million) was delivered to LDCs. Lastly, the Executive Board of the United Nations Population Fund (UNFPA) sets its budget allocation target at 71-73 per cent of its programme resources to a group of countries that are far from attaining the goals of the International Conference on Population and. This group of countries includes all LDCs. Irrespective of the organizations budget allocation procedures for LDCs, LDCs have been receiving increasing importance by the UN, in recent years. Accordingly, the share of LDCs in UN operational expenditures at the country level, including the Secretariat and UN Funds and Programmes, increased from 39 per cent in 2003 to 50 per cent in 2008. 9 Furthermore, the resource allocation from 6 key entities of the United Nations development system with budgetary independence from the UN Secretariat (UNDP, UNFPA, UNICEF, WFP, UNHCR and the International Fund for Agricultural (IFAD)) indicates an increased targeting of expenditures disbursed to LDCs (see Table 2 below). In 2008, these organizations directed 40 per cent or more of their budget to the LDC category. Table 2: Share of total country expenditure in LDCs by selected UN funds and programmes, 2003-2008 (per cent) Entity 2003 2004 2005 2006 2007 2008 UNDP 22 28 36 33 33 43 UNFPA 52 47 41 46 52 55 UNICEF 52 51 51 52 56 58 WFP 47 50 71 70 72 71 UNHCR 51 57 57 56 52 50 IFAD 38 47 45 41 41 40 Source: Report of the Secretary General, Analysis of the funding of operational activities for development of the United Nations system for 2008 (A/65/79-E/2010/76), p.32. 2. Organizations that do not recognize the LDC category A few organizations participating in the survey do not take the LDC category into consideration neither in determining budget contributions from and allocations to LDCs nor in their development activities. For instance, UNAIDS uses its own resource allocation criteria that reflect its organizational mandate. UNAIDS budget is raised entirely from voluntary funding and its resources 9 Report of the Secretary General, Analysis of the funding of operational activities for development of the United Nations system for 2008 (A/65/79-E/2010/76), p. 31. 4

are earmarked according to HIV epidemic priorities and building capacity at the country level. The World Bank, along with regional development banks and the IMF do not take LDC status into consideration when conceptualization their lending modalities or designing country-specific programmes. The multilateral development banks and the IMF have established specific lending facilities for countries according to level of income and access to international financial markets. Countries classified as low-income often qualify to the concessional lending available in these institutions. In the case of the World Bank, as of December 2010, there were 79 countries, including 46 LDCs, which were eligible to access financing by the International Association (IDA), the Bank s concessional lending arm. 10 The low-income group of the Asian Bank (AsDB), which is based on the IDA s eligibility criteria, includes all the LDCs located in Asia and the Pacific, except Yemen, which is not a member of the AsDB. Even though multilateral development banks (MDBs) do not have LDC-specific programmes in place, they do consider LDCs as priority countries, due to the similarity and overlaps between the criteria established by these organizations and those used by the CDP in the classification of countries as LDCs. An overview of the concessional lending facilities of the major multilateral development banks is provided in Table 3 below. The IMF also has lending modalities for low-income countries that differ from those granted to other developing countries. Concessional lending for lowincome countries is offered under the Poverty Reduction and Growth Trust (PRGT), covering urgent, short, and medium term needs. The PRGT-eligible country group includes 45 LDCs, but excludes Angola, Equatorial Guinea, and Tuvalu, according to in formation available on 15 April 2011. 3. LDC-specific technical assistance trust funds and travel-related funds Table 3: Concessional lending windows of major multilateral development banks a and eligibility for least developed countries Entity World Bank African Bank Asian Bank Inter-American Bank Name of concessional lending window Eligibility Note International Association African Fund Asian Fund Fund for Special Operations All LDCs, except Equatorial Guinea and Tuvalu b All LDCs in the region, except Equatorial Guinea All LDCs in the region Haiti is the sole LDC in the region and is eligible Certain island countries with per capita income higher that the cutoff are eligible due to the island exception. Hardened lending terms are applied to Angola and Bhutan. c Hardened lending terms are applied to Angola. b Yemen is not a member of AsDB. Bangladesh is categorized as a blend country. n/a LDC-specific Technical Assistance Trust Funds A small number of trust funds from international organizations are designated for technical or travel-related assistance specifically for LDCs. Among the survey respondents, two international organizations have set up and/or administer LDC-specific technical assistance trust funds (see Table 4 below). The Least Developed Countries Fund (LDCF), which is managed by the Global Environment Facility (GEF) under the World Bank, addresses the special needs of the LDCs, which are especially vulnerable to the adverse impacts of climate change. This includes preparing and implementing National Adaptation Programmes of Action. The Enhanced Integrated Framework Trust Fund is another example of LDC-specific technical assistance. Notes: a The MDBs usually include the European Bank for Reconstruction (EBR). However, the EBR does not have a concessional lending window. b As of 15 December 2010. c Loans with hardened lending terms have lower grant elements than those with regular lending terms. 10 According to information available by mid-december 2010, Equatorial Guinea and Tuvalu were not IDA eligible. 5

Table 4: Selected LDC-specific trust funds, 2007-2010 Amount received (thousands of dollars) Amount disbursed (thousands of dollars) Organization Name of fund Recipient 2007 2008 2009 2010 2007 2008 2009 2010 UNCTAD INT9X77J-trust fund for LDCs All LDCs 220 694 366-606 894 552 - World Bank/GEF Least Developed Countries Fund (LDCF) for Climate Change All LDCs - 36,000 27,000 35,000-16,000 4,000 12,000 Apart from LDC-specific trust funds, there is a wide range of trust funds established or managed by international organizations accessible for all developing countries. Generally, these funds are aimed at assisting particular countries or targeting particular areas and subjects. For example, UNCTAD reported that it has managed 60 funds, mostly for the implementation of projects in the area of transport management or customs for the benefit of some LDCs, but not of the category as a whole. Similarly, FAO and UNICEF have managed funds in their respective areas of expertise in favour of all developing countries, including many LDCs. LDC-specific travel related Trust Funds Several international organizations have trust funds devoted to facilitating the participation of LDC Government representatives in their meetings (see Table 5 on the right). Additionally, the United Nations itself provides financial support for the participation of LDCs to the General Assembly annual sessions. The United Nations pays the travel, but not subsistence expenses, for LDC participation in the General Assembly as follows: (a) up to five representatives (per LDC) attending a regular session of the General Assembly; (b) one representative (per LDC) attending a special or emergency session of the General Assembly; and (c) one member of a permanent mission in New York designated as a representative or alternate to a General Assembly session. Total travel costs incurred by the United Nations for the participation of qualifying LDC members to General Assembly sessions for the years 2005 and 2006 were of $1,124,407 and $980,417, respectively. Assuming all LDCs used this benefit, this would correspond, on average, to about $20,000 per country per year. 11 Table 5: Travel-related funds for LDCs Entity Description FAO/WHO Codex LDCs in meetings of the Codex Alimentarius Alimentarius Commission Commission* International Criminal Court United Nations Secretariat UNCCD UNFCCC UNEP CMS UNEP Montreal Protocol UNEP Stockholm Convention UNIDO UNODC Trust Fund for the participation of LDCs in meetings of the International Criminal Court Assembly of State Parties - Trust Fund to facilitate LDC attendance to the annual review of the Programme of Action for the LDCs for the Decade 2001-2010 - Trust Fund to facilitate LDC attendance of the United Nations Consultative Process on Oceans and the Law of the Sea LDCs in meetings of UN Convention to Combat Desertification (UNCCD) Trust Fund to facilitate LDC participation in the UNFCCC Process LDCs in meetings of the Convention on Migratory Species (CMS) LDCs in meetings of the Vienna Convention for the Protection of the Ozone Layer and its Montreal Protocol Trust Fund to finance the participation of LDCs in meetings of the Stockholm Convention on Persistent Organic Pollutants (POPs) Trust Fund assistance to facilitate the participation of LDCs in its meetings LDCs in sessions of the Commission on Crime Prevention and Criminal Justice and the sessions of related conferences of States Parties * See also Survey on International Support Measures specific to the Least Developed Countries (LDCs) related to WTO Provisions and Preferential Market Access - Responses by LDCs - Summary and Analysis, available at www.un.org/ldcportal. 11 Handbook on the Least Developed Country Category: Inclusion, Graduation and Special Support Measures. (op. cit), p. 32. 6

C. Support from multilateral organizations to LDCs graduating from the category Cape Verde and the Maldives graduated from the LDC category in December 2007 and January 2011, respectively, and Samoa is scheduled to graduate on 1 January 2014. General Assembly resolution 59/209 invites bilateral and multilateral development and trading partners to cooperate and support a smooth transition strategy for countries graduating from the list of LDCs. In particular, the resolution calls for the graduating countries, in cooperation with its development and trading partners, to prepare a transition strategy to adjust to the phasing out of the advantages associated with LDC status. The resolution also recommends the country and its partners to establish a consultative mechanism to facilitate the preparation of the transition strategy and the identification of the associated actions. 12 Survey responses have indicated that LDCs and their development partners have faced delays in establishing consultative mechanisms to facilitate the smooth transition from LDC status within the proposed framework, as envisaged in the GA resolution. UNCTAD has reported that it provided LDC-specific technical assistance in every phase of graduation to Cape Verve and the Maldives, including in the formulation of a smooth transition strategy. It also pointed out its readiness to provide similar assistance to Samoa. Some international financial institutions expressed their readiness to support the consultative mechanism and transition strategies of graduating countries. They also indicated that they had not been approached by the countries concerned. They highlighted the importance for graduating countries of preparing a transition strategy to adjust to the phasing out of the advantages associated with the LDC category and to seek the cooperation of development and trading partners. The lack of formal mechanisms does not imply lack of support by multilateral organizations to the graduated country. For example, UNFPA has decided to keep, until the end of 2011, Cape Verde and the Maldives in its Group A, which is a group of countries that are lagging behind in attaining reproductive health goals and targets, despite both countries graduation from the LDC 12 See: United Nations General Assembly Resolution A/RES/59/209, 28 February 2005 category. The United Nations Environment Programme (UNEP) is a signatory of UNDAF Action Plan in the Maldives for 2011-2015 and in Samoa for 2012-2015; thus, both countries will continue to receive assistance from UNEP through UNDAF. Similarly, UNICEF has assisted the Maldives in formulating a transition plan as part of the United Nations Country Team (UNCT). The IMF and the World Bank reported that they exchanged views with Cape Verde during its transition. The IMF reviewed with the Maldives its medium-term fiscal framework before and after graduation. The World Bank, along with the Maldivian Government and six others development partners, examined ways to harmonize budget support to the country, in anticipation of donors possible withdrawal of concessional aid after graduation. The Government of Cape Verde and its donors have developed an operation matrix, which is now used as the basis for discussions and aid disbursement. Table 7 below shows the recent ODA inflows to the country. While bilateral flows increased since the country s graduation at the end of December 2007, multilateral flows declined in 2009. Table 7: Total ODA to Cape Verde, net disbursements (millions of dollars, current prices) 2005 2006 2007 2008 2009 All donors 192.3 159.21 171.9 216.64 195.94 Multilateral 64.3 42.47 51.95 57.07 34.46 Bilateral 128.0 116.74 119.95 159.57 161.48 Source: UN/MDG Gap Task Force. A number of multilateral donors that have not yet responded to the survey have an established track-record in continuing LDC-specific support measures after a country s graduation. For instance, the Board of the Enhanced Integrated Framework (EIF) approved an automatic extension of full EIF benefits to all graduated LDCs for an initial three-year period, with the possibility of a further extension of up to two years thereafter based on the justification provided, on a case-by-case basis. The Least Develop Country Fund (LDCF), managed by the Global Environment Facility (GEF) under the World Bank to address climate change needs of LDCs, also provides some form of smooth transition by allowing graduated countries access to project funds (up to a maximum of $7 million) already in the pipeline. 13 13 The Least Developed Countries Report 2010 (United Nations sales, publication No. E.10.II.D.5) 7

Table 8 hereafter summarizes the support extended by multilateral organizations to graduating and graduated LDCs. Table 8: Smooth transition support measures by multilateral organizations Specific smooth transition support measures As a development partner of Asian LDCs, the AsDB indicated willingness to participate in the AsDB development of a transition strategy for graduating LDCs in Asia and the Pacific region. No specific support, but graduated LDCs are not expected to experience any impact on their accessing FAO technical cooperation resources as long asthey continue to be SIDS. ILO Not yet determined. Technical assistance support is provided before, during and after graduation from LDC status, based UNCTAD on GA resolution 59/209. See also EIF below. Will provide support to Samoa within the UNDAF UNEP framework in the country, covering the transition period. As a member of the UN Country Team in Cape Verde, UNICEF was involved in the transition UNICEF process of that country, sharing information and data on child development, health, nutrition, education and social welfare. UNIDO No official request received. Plans to participate in the consultative mechanism WMO of Samoa through its office located in that country. World Bank EIF GEF LDCF* United Nations Following participation in the consultative mechanism, donor harmonization in Cape Verde has allowed broadened coverage of international community support and helped avoiding duplicative efforts. See also GEF LDCF below. Automatic extension of full EIF benefits to all graduated LDCs for an initial three-year period, with the possibility of a further extension of up to two years thereafter based on the justification provided, on a case-by-case basis. Access to resources maintained for projects already in pipeline (capped at $7 million per country). UN Group assists graduating countries by providing support from the UN Resident Coordinator and the UN Country Team to the consultative mechanism. * Administered by the World Bank. D. Conclusions Various international organizations have LDC-specific budgetary rules for assessing Member contributions to their budget. Preliminary analysis indicates that, on average, the LDC-specific benefits in assessed contributions could be as much as half a million dollars per year for a limited number of LDCs. A number of organizations have also established budgetary expenditure targets for the LDC category; and the availability of LDC-specific technical assistance funds offered by some entities helps to enhance the development prospects of these countries. Travel-related assistance to LDCs facilitates the participation of LDCs Governments in international organizations meetings. However, only a few of the surveyed organizations consistently take into consideration the LDC category at various levels of LDC-specific support measures. Irrespective of the organizations respective mandates, significant portions of their activities are currently being implemented in LDCs, as these countries suffer from significant gaps in several development areas. Yet, establishing budget allocation targets, as in the case of UNDP, would strengthen the organizations development activities in the poorest and most disadvantaged countries. This measure would also contribute to increasing the predictability of development assistance to these countries. The current level of LDC-specific assistance by international organizations needs to be enhanced. Forty years after the General Assembly stated that the identification of LDCs was an urgent matter to alleviate underdevelopment problems, some organizations still do not accord priority to the LCD category, as per the GA s recommendation. Multilateral development banks and the IMF are cases in point. Furthermore, there appears to be a trend towards establishing new country groupings such as the Low-Income Countries Under Stress (LICUS) by the World Bank. Hence, additional efforts are needed to reduce existing gaps, and improve overall coherence by developing programmes that are compatible with the international strategy designed for these countries and adopted by the UN General Assembly. 8

With respect to graduation, a more formal and better coordinated mechanism should be established to identify and facilitate actions for implementing a smooth transition strategy from the LDC category. In this regard, recent experiences show that: (1) Most multilateral assistance efforts are based on the organizations own policies, priorities and criteria (which may not be necessarily related to LDC status) when providing grants, loans and technical assistance to developing countries. In this regard, graduation does not trigger a new policy stance. (2) Even if these organizations recognize LDC status as part of their policy criteria, graduation often falls in the middle of a multi-year programme or a project cycle, and does not invoke immediate changes. Yet, it is not clear how these organizations will proceed once their respective project cycles are completed in graduated countries. However it is important to highlight that, as developing countries, graduated LDCs are still eligible to assistance by multilateral organizations, as it is the case for developing countries that are not LDCs. (3) Often, organizations review assistance to graduated LDCs on a case-by-case basis, with very few exceptions. Thus, there is no established institutional approach for phasing out LDC-specific benefits to graduated LDCs. (4) Graduating countries need to have a more proactive stance by taking leadership in the process of preparing for a smooth transition, with the support of their development and trading partners. Annex: List of the multilateral organizations that responded to the survey Asian Bank (AsDB) Economic and Social Commission for Western Asia (ESCWA) Food and Agriculture Organization (FAO) International Atomic Energy Agency (IAEA) International Labour Organization (ILO) International Monetary Fund (IMF) International Trade Centre (ITC) Inter-Parliamentary Union (IPU) Joint United Nations Programme on HIV and AIDS (UNAIDS) United Nations Children s Fund (UNICEF) United Nations Conference on Trade and (UNCTAD) United Nations Environment Programme (UNEP) United Nations Human Settlements Programme (UN-HABITAT) United Nations Industrial Organization (UNIDO) United Nations Population Fund (UNFPA) World Bank World Food Programme (WFP) World Meteorological Organization (WMO) 9