Test by Sergio Villatoro

Moving up Moving out

INTEGRATED SUSTAINABLE GRADUATION SUPPORT FACILITY FOR GRADUATING AND GRADUATED LDCS

The views expressed in this publication are those of the authors and do not necessarily reflect the opinions and policies of the United Nations. The term “country” as used in the text also refers, as appropriate, to territories or areas. The designations of country groups are intended solely for statistical or analytical convenience and do not necessarily express a judgement about the stage of development reached by a particular country or area in the development process. All queries should be addressed to CDP@un.org

3 9 15

12 2

6 14

1 5

Graduated

1. Vanuatu

Graduating

2. 3. 4. 5.

Angola Bhutan São Tomé and Príncipe Solomon Islands

Recommended by CDP For Graduation

6. 7. 8. 9. 10.

Bangladesh Kiribati Lao PDR Nepal Tuvalu

Meets the Graduation Criteria and Under the CDP Review

11. 12. 13. 14. 15. 16. 17.

Cambodia Comoros Djibouti Myanmar Senegal Timor-Leste Zambia

FOREWORD

Mr. Liu Zhenmin

Mr. Courtney Rattray

Graduation out of the least developed country (LDC) category will receive global attention and take centre stage as the world convenes at the Fifth UN Conference on the LDCs (LDC5) in Doha, Qatar. It is every LDC’s desire to do so, and this has intensified since the adoption of the Istanbul Programme of Action (IPoA) in 2011, with a goal to help half of the LDCs meet the graduation criteria by 2021. Twenty LDCs have met the graduation criteria at least once, in the last decade (20112021). Four countries have graduated since 2011 and another sixteen are on the graduation pathway. While progress made falls short of the IPoA target, the 20 countries – their governments and people are to be commended for progress made, despite facing climate and disaster risks and external shocks including the prolonged adverse impacts of the Coronavirus (COVID-19) global pandemic. We are pleased to present to you the iGRAD Prospectus. The Prospectus outlines the rationale for establishing the iGRAD, its main purpose, the six service offering lines, how countries can access the services offered and partners can get engaged to support graduating and graduated countries. iGRAD is an integrated, sustainable graduation support facility that is country-led and serves as a global platform. It will also serve as a clearinghouse of initiatives and projects pursued in support of graduating countries. Concerns relating to the implications of graduation due to a loss of LDC-specific international support measures in trade, intellectual property rights and financing for development compounded by the globally unanticipated adverse impacts of COVID-19 have been frequently raised by graduating LDCs. These countries have accentuated the need for dedicated, country-specific support to help them address these concerns, sustain progress made, move upward in their development trajectory and move out of the LDC category without any disruptions to their overall development. 2

FOREWORD

However, dedicated capacity development support is missing and should be a key focus in the new programme of action to be adopted in Doha. In response to the critical gap for much needed support, we have combined our efforts to bring together, enhance and integrate graduation-related advisory services to help graduating and graduated countries prepare for and achieve sustainable and irreversible graduation. Its design is a culmination of the thought leadership of the Committee for Development Policy (CDP), many country consultations, lessons learned from past support provided to LDCs, an iGRAD survey of all 46 LDCs to determine the level of demand, additional ideas and feedback from key development and trading partners and the piloting of the iGRAD service offerings in Vanuatu and Bangladesh. iGRAD was introduced by the CDP and UN Most Vulnerable States (UN MOVES) as IATF Chair at the various stages of the preparatory process leading up to LDC5. As a concrete proposal for the new programme of action, iGRAD will be launched during the LDC5 Roundtable 8: Supporting sustainable and irreversible graduation out of the LDC category. As the LDCs and the international community prepare for Doha, we recommend that they read this iGRAD Prospectus and become an iGRAD partner to jointly deliver dedicated capacity development support that is country-specific, time-bound and with predictable resources. We see iGRAD as a critical springboard for sustainable and irreversible graduation – a stepping stone for graduating and graduated LDCs to achieve the 2030 Agenda for sustainable development and the Sustainable Development Goals in the new Decade of Action.

Mr. Liu Zhenmin Under-Secretary General UN Department of Social and Economic Affairs (UN DESA)

Mr. Courtney Rattray Under-Secretary General UN Most Vulnerable States (UN MOVES)

FOREWORD

MOVING UP, MOVING OUT A record number of least developed countries (LDCs), 17 in total, are set to move up and out of this category or have recently graduated. This is an important yardstick for the future growth and advancement of the other 29 countries in this category. While this achievement holds promise for 880 million people, around 12 percent of the global population, these countries remain highly vulnerable to economic and environmental shocks. Their vulnerability has been exacerbated by the COVID-19 pandemic and escalating climate crisis. Progress towards the Sustainable Development Goals (SDGs) is at risk of rolling back as poverty increases and inequalities widen. Therefore, it is essential LDCs have the means and support to advance towards graduation to ensure they are not left behind.

RATIONALE iGRAD addresses the concerns of graduating and graduated countries relating to graduation and assists them in preparing for graduation and smooth transition, including policy responses to the COVID-19 recovery.

New port of Vanuatu ©José Carlos Alexandre/EIF (2017) MOVING UP, MOVING OUT

PURPOSE iGRAD is inspired by the thought leadership of the Committee for Development Policy (CDP) of the United Nations (UN) and a joint initiative led by UN DESA as the CDP Secretariat and UN Most Vulnerable States (UN MOVES) as Chair of the Inter-Agency Task Force on LDC Graduation.

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iGRAD serves as a country-led global platform that offers dedicated and integrated capacity building support in the form of technical and policy advisory services to graduating and graduated countries.

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iGRAD brings together diverse partners and secures funding for a decade that is predictable for integrated support to graduating and graduated LDCs.

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iGRAD is managed by the Inter-Agency Taskforce (IATF) on LDC Graduation through key UN and non-UN partners.

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iGRAD provides a springboard for LDCs to meet targets and achieve the Sustainable Development Goals by 2030.

STRATEGIC OVERSIGHT A steering committee will provide strategic oversight and champion the purpose and service offering of the facility at global, regional and national dialogues and forums and in members’ own institutions.

PURPOSE

SERVICE OFFERING

Women weaving in Nepal ©EIF (2012) SERVICE OFFERING

COUNTRY-LED Country demand and specific needs have shaped the six main service offering lines provided by iGRAD. A survey was jointly conducted by DESA and UN MOVES inviting all 46 LDCs to respond and identify which of the proposed six main areas of technical assistance would be most relevant and useful, and to indicate any additional areas of assistance needed. Twenty countries responded, of whom 12 are graduating and recently graduated countries. Further country consultations are currently underway with each of the 12 countries to:

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Identify the specific areas of focus under each of iGRAD service offering lines (SOLs) selected

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Identify/agree on the most appropriate service providers and co-designing of the specific areas

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Discuss the country preferred timing for the support to be provided and agree on a timeline

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Establish an agreed understanding of the cost of the services required by countries, resources to be provided under iGRAD, country contribution (if any) and any additional resources to be mobilized

Capacity building related to policy and technical advice will draw on existing technical staff and resources of IATF members - both UN and non-UN entities supplemented by additional policy and technical advisory support funded by iGRAD. The use of national experts from developing countries and those in the same region of the country where services are needed will be actively promoted. The IATF will develop integrated support work plans for each country that outline specific needs requested by a country, the key partners collaborating to support the country with each service offering line, resources (policy and technical resources, financial and in-kind) required and commitments and agreed timeline.

COUNTRY-LED

COUNTRY

SGSF Service Offering Online (SOL) SOL1

Gradutaed

SOL2 c.

1. Vanatu Graduating 2. Angola 3. Bhutan 4. São Tomé and Príncipe

5. Salomon Islands Recommended by the CDP for graduation 6. Bangladesh 7. Kiribiati 8. Lao PDR 9. Nepal 10. Tuvalu Meets the Graduation Criteria and Under the CDP Review 11. Cambodia 12. Comoros 13. Djibouti 14. Myanmar 15. Senegal 16. Timor-Leste 17. Zambia

Honey Production in Zambia ©Simon Hess/EIF (2018) COUNTRY-LED

SOL3 d.

SOL4 a.

SOL5 c.

SOL6 a.

HOW CAN COUNTRIES ACCESS SERVICES? Countries can access iGRAD services based on eligibility that is tied to meeting the graduation criteria as follows:

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Graduating and recently graduated countries

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Countries recommended for graduation by the CDP but are yet to be endorsed by ECOSOC

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Countries meeting the graduation criteria and under the CDP review

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Countries that meet the graduation criteria in 2024 or 2027

Where a country has not submitted its response to the iGRAD survey, it will need to submit an official country response to the survey followed by consultations with the IATF. The process allows countries to own, lead and co-design the services provided to support preparations for graduation and/or smooth transition. This ensures services are delivered according to country-specific needs and timelines.

PROCESS

Formal request

Assessment

Predictable, time-bound, country-specific services under the six SOLs

HOW CAN COUNTRIES ACCESS SERVICES?

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Port Vila, Vanuatu ©José Carlos Alexandre/EIF (2017) 10 VANUATU PILOT

We wish to acknowledge the invaluable backing from UNSCAP, UN DESA, UNCTAD, the EU, the Government of Australia and those development partners who supported the development of our Smooth Transition Strategy. With their support, Vanuatu will transition smoothly beyond graduation with new vigour, new thinking and new pathways of development and partnerships towards equality, resilience and environmental sustainability. Excerpt from a statement by Hon. Marc Arti (MP), Vanuatu Minister of Foreign Affairs, International Cooperation and External Trade at the UNESCAP 77th Commission Session.

Vendor in Port Vila, Vanuatu ©José Carlos Alexandre/EIF (2017) 11

PARTNERSHIPS iGRAD seeks to engage potential partners to bring together existing and new graduation-related advisory services and expertise and financial resources in response to the specific needs of each participating country. Partners initially approached by DESA and UN MOVES are those who offer existing services and expertise that are directly related to the six service offering lines (SOLs) provided by iGRAD and key partners for each SOL already working with and in the respective countries.

12 PARTNERSHIPS

PARTNERSHIP TYPES The types of partnerships under consideration are categorized under four main groups:

Policy and technical advisory Expertise in this area of support that already exist in various institutions - bilateral, regional and multilateral development partners, research centres and think tanks, academia and from the private sector. DESA, ESCAP, UN MOVES, UNCDF, UNCTAD, OECD Development Centre and ODI are current partners.

Financial DESA has provided seed funding through its existing projects including the pilot in Vanuatu. Potential funding partnerships with bilateral partners who have a key role as a development and/or trading partner in any of the 17 countries and/or in their regions, instrumental for development and economic cooperation in the graduating LDCs, are being explored.

Investment and loans As countries prepare for graduation and smooth transition, transition finance in the form of investments requiring alternative sources of development financing will be needed. Potential partners that offer financing opportunities - both concessional and non-concessional instruments and including blended finance geared for the specific needs of graduating and graduated countries are being explored. Regional financial institutions that play a critical role in trade finance, financial solutions and advisory services for the expansion, diversification, promotion and development of trade, especially intra-regional trade, connectivity and environmental resilience would be critical.

Private sector Technology, science, innovation, social entrepreneurship and leadership are areas where expertise in the private sector could be explored. In addition, private sector partners who have expertise in engaging women and girls in the gig economy would be key to enhancing gender equality as a core ingredient for sustainable graduation and a resilient and smooth transition towards sustainable development.

PARTNERSHIP TYPES 13

UN FIFTH CONFERENCE ON LDCS, LDC5 iGRAD will unlock and mobilize integrated and targeted assistance for LDCs under the new programme of action at the Fifth United Nations Conference on the Least Developed Countries, LDC5, in Doha, Qatar and fulfil commitments under the Decade of Action.

DECADE OF ACTION Decade of Action Commitments

iGRAD Commitments

Mobilize everyone, everywhere. We will work to create an unstoppable force linked to the Global Goals. We will identify risks to ensure no one is left behind. This requires each of us to take action—individually and collectively, locally and globally.

iGRAD will deliver targeted assistance for the 17 graduating and graduated LDCs, representing around 350 million people, a large proportion of whom are among the world’s poorest, living on less than $1.9 a day.

Demand urgency and ambition. We must be the generation to end extreme poverty, win the race against climate change and conquer injustice and gender inequality. We will hold leaders to account and point to what is possible when action delivers results Supercharge ideas to solutions. We will shine a light on solutions that expand access and demonstrate the possibilities of ideas. We will drive sustainable innovation, financial investments and technology—while making space in our communities and cities for young people to lead.

14 UN FIFTH CONFERENCE

iGRAD will ensure inclusive and meaningful engagement with national and local stakeholders at every stage of the graduation process. iGRAD responds to challenges and leverages opportunities for graduating or graduated LDCs, particularly to address the dual impact of the climate crisis and COVID-19. iGRAD will broker and manage innovative, forward-looking partnerships for coordinated and collaborative action to support LDCs on the path to graduation and the attainment of the Goals in the last mile.

Additional Information SUSTAINABLE GRADUATION SUPPORT FACILITY Service Offering Line 1 (SOL1)

Addressing the loss of existing LDC-specific international support measures (ISMs

a. Facilitate access to LDC-specific capacity building programmes in priority areas related to LDC graduation. Help graduating LDCs to access funds from existing facilities to which they will soon no longer be entitled. b. Strengthen capacity of government officials to prepare and engage in trade negotiations advocating for extended LDC-specific ISMs, such as trade preferences and to improve access to export markets in particular for commodities that are currently exported with LDC-specific preferential access conditions. c. Provide enhanced technical assistance in addressing the possible loss of LDC-specific special and differential treatment (SDT) under the WTO agreements as well as to build and strengthen intellectual property systems in response to the possible loss of LDC-specific special and differential treatment so as to enable compliance with relevant international obligations after graduation without economic disruption.

Service Offering Line 2 (SOL2)

Improving the ability of graduating and graduated LDCs to access non-LDC-specific support

a. Support assessment of climate funding in line with national development priorities. Many of the smaller, more capacity-constrained graduating LDCs struggle to thoroughly assess the potential contribution of multilateral climate-related funds to broader national priorities. Support will include enhancing the capacity of accredited national implementing entities. b. Assist in accessing non LDC-specific Aid for Trade to increase building of trade capacity and infrastructure needed, including technical assistance that help countries to develop trade strategies, improve understanding of export requirements and negotiate more effectively. c.

Technology transfer and transfer of know-how. In addition to continued support and funding from the technology bank for LDCs, the tacit nature of production knowledge means there is a need to send experts from suitable countries to current, graduating and former LDCs – many of which are undergoing structural transformation and are at a point when technology transfer is critical.

Innovative disaster-risk reduction solutions. Disaster-prone former LDCs may wish to further pool risk either regionally or globally via a facility simple enough that it can be easily accessed by capacity constrained countries. This is particularly relevant for LDCs in Asia and the Pacific and for several other LDCs that are vulnerable to disasters. Most graduating countries tend to be under-served by existing disaster-risk reduction programmes yet suffer the most from disasters associated with natural hazards.

ADDITIONAL INFORMATION 15

Service Offering Line 3 (SOL3)

Preparing and implementing smooth transition strategy

a. Use the STS Guidance Note produced by the CDP Secretariat to guide the preparation and implementation of a smooth transition strategy. Guidance would include strategic policy and technical advice tailored to the specific country context and ensuring the STS is integrated in the medium to long-term sustainable development plans/processes and development financing frameworks of graduating countries. Guidance would also include a focus on lingering vulnerabilities, longer-term development processes, and productive capacities and structural transformation. Guidance can also be provided if needed, in establishing a national consultative mechanism, the role of the UNRCO and collaboration with development and trading partners, the private sector and civil society. Assistance in providing coordinated inputs from agencies working in tandem with the Inter-Agency Task Force on Graduation (IATF) that is led by UN MOVES, would be made drawing on each agency’s comparative expertise. b. Connect countries to partners with required specialized expertise, where additional analysis on the impact of graduation and smooth transition measures is requested by a country to inform the preparation of their STS. A country may require an elaboration of certain aspects of the graduation assessment by DESA/CDP and UNCTAD in preparation of a country’s review for graduation by the CDP and/or other specific assessments undertaken or available from the various entities under the IATF.

Service Offering Line 4 (SOL4)

Assistance in Accessing Financing Transition and Beyond

a. Provide capacity building and technical advisory services to operationalize integrated national financing frameworks (INFFs). These are already in demand by graduating LDCs such as assessments, diagnostics and formulating financing strategies for the achievement of SDGs. Support includes an assessment of public finance and budget allocation in favour of SDGs but can cover the full range of potential sources of financing across the Addis Ababa Action Agenda (AAAA). Support on creating a centralized hub for concessional finance, can be included, if required. b. Facilitate access to finance via private sector capital markets and investment facilities, foundations and funds allocated by countries, including under South-South and Triangular Cooperation and for specific sectors or areas, where needed. Offer finance facilitation services including support for policy development and enabling environment, capacity building, knowledge exchange and sharing platforms on financial tools. Support for convening forums that can create opportunities for public-private partnerships and investments could also be provided to increase access to finance. It could include support with preparation of funding applications and fulfilment of reporting requirements, thus reducing some of the administrative burden of seeking development finance, while accelerating access and enhancing funding predictability.

16 ADDITIONAL INFORMATION

c. Provide support to strengthen revenue generation and collection skills and capacities. Building public revenues is one of the main challenges for former and graduating LDCs. Broadening the tax base is fundamental to self-finance future development and to reduce reliance on aid. Graduation can be seen as an opportunity to solicit capacity-development assistance for domestic resource mobilization including existing programmes such as the Tax Inspectors Without Borders (TIWB) initiative by the OECD and UNDP bringing countries together to tackle tax avoidance, evasion and illicit financial flows.

Service Offering Line 5 (SOL5)

Facilitating South-South Cooperation, dialogue and sharing country as well as region-specific knowledge and experience.

a. Support for South-South dialogue, cooperation and knowledge sharing between graduating LDCs, former LDCs and other developing countries including non LDCs. Such support will draw on expertise in graduating countries and their regions. Cooperation may include creation of joint groups of graduating and former LDCs in trade, climate and other intergovernmental negotiations to strengthen collective bargaining power and mutual support. Knowledge and experience sharing across regions could also be facilitated for cross fertilization and to enable sub-regional and regional organizations to offer these services to graduated countries on a longer term and with their own technical capacity and finances. Graduated LDCs that have successfully enhanced their capacities in the areas provided by the facility could possibly be engaged by the facility to support future graduating LDCs.

Service Offering Line 6 (SOL6)

Ensuring effective participation in the monitoring process of the CDP

a. Facilitate inputs to the CDP indicating any disruption to the development progress due to or after graduation and reporting on progress in the preparation and implementation of the smooth transition strategy and on changes in support from development and trading partners. This will be on a yearly basis during the preparatory period and for a period of three years after graduation becomes effective, and triennially thereafter. b. Facilitate establishment of an effective channel of communication between CDP and Government’s focal point on LDC graduation issues.

c. Assist participation of the country in CDP’s efforts of strengthening the collaborative aspect of the monitoring mechanism. For example, through enhancing capacity in providing and analyzing relevant data and through facilitating engagement in country consultations with the CDP.

ADDITIONAL INFORMATION 17