What are the Differences Between LDC and Middle-Income Country Categories?
|
Issues |
LDC |
MIC |
| Classification authority | UN Classification Single category | World Bank Classification – two classes under middle income- lower middle income & upper middle income |
| Purpose | To attract special support measures from international community; preferential treatment in WTO etc. | Make lending decisions; benefits provided in terms of lower interest rates; debt relief; etc. |
| Basis for taxonomy | 3 criteria- 14 different structural indicators and an indicator for income | Income in WB Atlas method (LMIC: $1,036-
$4,045; UMIC: $4,046-$12,5355) 1 July 2020 |
| Cap on Population | Additional criteria included in 1991; Population must be less than 75 million | No cap |
| Process of exit | Long. Minimum 6 years from meeting the criteria | Short. Changes every year |
| Decision regarding inclusion and graduation | Once recommended for inclusion, countries decide whether to accept the LDC status or not
Once recommended for graduation, countries have no choice but to graduate |
Countries bound to accept whatever classification is assigned to them |
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