Least-Developed Countries, a Status That Many Nations Can’t Leave Behind
Since 1971, the United Nations has recognized least-developed countries as those deemed highly disadvantaged in their development strides because of structural, historical and geographical reasons. The aim has been, and still is, to support these countries to graduate to higher levels of self-sufficiency and economic independence, not in the sense for a privileged minority but for the wide majority of the country’s population.
Equatorial Guinea is the fifth country to graduate in the last 46 years from this status, leaving 47 countries classified as least developed, so it is not a fast record. Previously, Botswana (1994), Cape Verde (2007), Maldives (2011) and Samoa (2014) graduated. Vanuatu and Angola are scheduled to graduate in 2020 and 2021, respectively.
In a report from the UN Conference on Trade and Development titled “Poverty Trap Leaves Least Developed Countries Further Behind,” published in December 2016, the following points were made, among others:
- The proportion of the global poor in the 48 least-developed countries (LDCs) has more than doubled since 1990, to well above 40 percent, while those countries without access to water has also doubled to 43.5 percent in the same period. These countries now account for the majority (53.4 percent) of the 1.1 billion people worldwide who do not have access to electricity, representing an increase of two-thirds.
- How a country graduates is just as important as when it graduates. (This has particular relevance regarding Equatorial Guinea.)
- Countries graduate from the LDC category by satisfying a complex set of economic and social criteria. But only four countries, as noted above, have graduated in the 45 years since this classification was established.
- In 2011, prompted by this glacial rate of progress, the international community set a goal that half of all LDCs should meet the criteria for graduation by 2020. But halfway to the target date, this goal already appears elusive.
In considering the status of least-developed countries even at a basic level, one is struck by the links between politics, power and money and how they seemingly conspire to maintain the status quo rather than improve a country’s well-being.
Perhaps this is not surprising. The UN is made up of 193 countries that include democratic governments as well as governments engineered by totalitarian leaders. It is well assumed that the voting system within the UN — notably the General Assembly — is like a stock market, where outcomes may be the results of back-room bidding.
Similarly, major businesses with international connections may induce local leaders in one way or another to let them exploit national resources with “politics” being overpowered by financial gain and power. This way, multinational enterprises can work with or against their own country’s political system while liaising with corrupt leaders of another country. For example, two former executives of a Dutch oil and gas services company pleaded guilty (in the United States) to conspiracy for their roles in bribing foreign government officials in Brazil, Angola and Equatorial Guinea.
The nature of such alliances can be hard to crack, as the companies could not only be bribing officials but also threatening relevant government ministers to toe the line or the company might pull out, possibly destabilizing the country.
Equatorial Guinea is a classic example of a country that with encouragement toward good governance could have had strong positive effects on its general population. It is a tiny country on the coast of West Africa with offshore territories in the Atlantic. It possesses large oil deposits as well as such minerals as gold, diamonds, bauxite, iron ore, titanium, copper, manganese and uranium. Artisanal gold mining is reportedly taking place in parts of the mainland. An article in answersafrica.com suggests that the Equatorial Guinean president, Teodoro Obiang, is worth $600 million.
Since the mid-1970s, Equatorial Guinea has become one of sub‑Saharan Africa’s major oil producers. It is the richest country per capita in Africa, and its gross domestic product, adjusted for purchasing power parity per capita, ranks 43rd in the world. However, the wealth is distributed unevenly and few people have gained from the oil riches. The country ranks 144th on the UN’s 2014 Human Development Index, and the UN says that less than half of the population has access to potable water and that 20 percent of children die before reaching age five.
The country is entering its two-year elected term on the UN Security Council this month; some civil society members suggest the country bought its seat.
The fact that Equatorial Guinea graduated from least-developed countries status on the basis of GNI per capita ignores the reality that oil income can inflate that measure without increasing average incomes for most of the population.
Thus the qualification for aid to the country is raised and most of the population is subjected to increased poverty. Clearly, aid itself is not the answer to raising the standard of living in LDCs, and graduation from the list can be “achieved” by using insensitive criteria that hurts the population. It is a tragic comment on the judgment of those who assess such situations.
“Oil projects require huge amounts of capital and only pay off fully over decades,” an article in IOL.co.za notes. “This means companies such as Exxon prefer countries with political stability, which is often equated with authoritarian rule. The key is to be able to predict what the country will be like in two decades’ time. With this in mind, Exxon has cut deals with long-serving leaders in major oil producing countries such as Angola, Equatorial Guinea and Chad. President Jose Eduardo dos Santos was in power in Angola from 1979 until this year  and has accumulated a net worth of $20 billion, largely through the oil industry.”
President Obiang has been ruling Equatorial Guinea since 1979, giving him plenty of time to accumulate his vast net worth; President Idriss Déby has been in power in Chad since 1990, and is worth $50m.
Individual countries can coerce or encourage the governments of other countries by offering material and/or political support in exchange for what they want. So, there may be some hope for the poorest of the poor in least-developed countries.
According to Human Rights Watch, the International Monetary Fund acknowledged some of these gaps, recognizing its approach to corruption as “uneven” and often couched in “indirect language.” The IMF promises, it says, to start rethinking how it addresses corruption, rightly recognizing that systemic fraud directly threats sustainable and inclusive growth, contributes to the neglect of health and education and worsens inequality.
As for Equatorial Guinea, Human Rights Watch said: “Moreover, the IMF included government statistics showing a steep decline in poverty, while admitting to us that the data had ‘significant methodological weaknesses.’ ”
In a 1997 report on the Industrial Development Decade for Africa, it noted that LDCs accounted for a high proportion of projects and activities that are financed by outsiders, including Equatorial Guinea.
Even so, the UN report noted: “Meanwhile, signs of deterioration were seen at every turn. Health delivery services could hardly keep pace with increasing poverty, hunger and disease; physical infrastructure could not be maintained and utility services kept falling apart. In some countries this unstable situation was made worse by persistent indulgence in poor governance engulfed in corruption, nepotism and abuse of individual rights and liberty.”
Foreign aid, from whatever source, is a multibillion-dollar business that attracts a range of participants and collaborators. It is promoted by conscience, the potential to make money, national and international politics and other incentives. There are cases where the presidents or leaders of least-developed countries are multimillionaires or billionaires who have made their fortune from using their power and could fund their own country’s foreign aid budget.
So why don’t donors stop giving money to such corrupt countries? One answer is politics: giving aid will result in a quid pro quo. Why is it that many UN project and program managers, working in LDCs, do not complain loudly when they see corruption? Maybe because they are hired on fixed-term contracts and have no incentive to have their contract canceled.
What role can major world powers play in helping — or not helping — LDCs move from poverty? It seems that the status of people in poorer counties is a tool to be used to further gains by wealthy countries or other parties. Indeed, multinational corporations can influence their own governments and other organizations to collaborate with other, questionable governments to secure deals with political and economic benefits.
People power has pressured governments and corporations to change their practices and attitudes: international condemnation of apartheid in South Africa is one of the best examples where the status quo was gutted. For least-developed countries, the future could glow brighter someday.
Originally published at www.passblue.com on January 1, 2018.