Tuvalu likely to lose between US$25-30 million annually if it graduates from being an LDC, Minister Toafa
Tuvalu is expected to lose between US$25-US$30 million annually in development financing if it’s considered for graduation from being a least developed country (LDC) to a developing country in two years’ time. [restrict]
“We are now in the transitional period but we are still arguing our case because we know we will lose a lot of our official development assistance (ODA) if we graduate, Finance Minister Maatia Toafa told PACNEWS in Suva last week.
“Losing between US$25-US$30 million is a lot of money for a small country like Tuvalu that is heavily dependent on 60-70 percent on foreign aid. Our Gross National Income (GNI) includes ODA from our development partners, so it’s a not a true measurement of our GNI, one of the criterias for graduation.”
At the recent meeting of Least Developed Countries in Antalya in Turkey, Tuvalu submitted a proposal to amend the eligibility criterias for LDC graduation.
The three criterias are Gross National Income, Human Assets Index (HAI) and Economic Vulnerability Index (EVI).
“We now argue that because of our economic vulnerability – being small, remote, without resources except for marine resources, we are saying that EVI should be the anchor criteria. Any country that wishes to graduate must meet the EVI requirement with any one of the other two.
“Right now, if you achieve two of the three criteria, you are ready to graduate, said Toafa.
Tuvalu was considered for graduation in 2014 by the Committee for Development Policy (CDP) of the United Nations Department of Economic and Social Affairs (DESA).
In 2015, CPD decided to defer Tuvalu’s graduation to its session in 2018. That gives the small island of just over 10,000 population, a breathing space of two years to fight its case.
“Some Pacific countries took long to graduate. For Samoa it was almost ten years and similarly Vanuatu was given some time to prepare itself for graduation. Their graduation was impacted by natural disasters. That is why we are arguing that EVI must be the anchor of the three criterias, explained Toafa SOURCE PACNEWS [/restrict]