No more an LDC, Cape Verde looks to build on economic gains
At the end of last year, this African island country ceased to be one of the LDCs due to its good performance in the political, social and economic spheres. Its graduation from the category brings down the number of LDCs to 49. Cape Verde is only the second country to graduate from the LDC group since its establishment in 1974. Botswana left the group in 1994.
Cape Verde’s graduation coincided with another notable success; its conclusion in December 2007 of over seven years of negotiations to became the 152nd member of the World Trade Organisation.
Graduation from the LDC list and accession to the WTO attests to strong commitment of Cape Verde to democracy, socio-economic progress and respect for human rights.
Since 1991, the country has pursued market oriented and people-centered policies, private sector development, privatization, trade liberalization and promotion of investment, particularly in tourism, transport and telecommunication infrastructure. Its GDP grew at impressive 6.5 per cent per annum and reached US$ 1.3 billion in 2006. The GDP per capita is US$ 2, 316. Human development indicators are also impressive: life expectancy at birth is 71 years and adult literacy rate is 81 per cent. Women make up 15 per cent of parliament and almost 19 per cent of executive arm of government.
Mr. Cheick Sidi Diarra, the United Nations Under-Secretary-General and High Representative for the Least Developed Countries, Landlocked Developing Countries and Small Island Developing States, and the United Nations Secretary-General’s Special Advisor on Africa , hailed Cape Verde’s graduation and accession to the WTO.
“The graduation of Cape Verde from the list of LDCs and the accession to the WTO is a clear demonstration that with the right domestic policies and strong international support, the fight against poverty can be won,” said Mr. Diarra. He also urged development partners to continue to support the graduating least developed country, to ensure its smooth transition, better integration into the world economy and avoid the disruption of its socio-economic development..
As an archipelago of ten islands, Cape Verde faces the challenge of interconnectivity, a narrow resource base, remoteness from the major world markets, and scarcity of fresh water. It is also highly vulnerable to environmental degradation, namely desertification, climate change and natural disasters. High dependence of its economy on services (over 70 per cent of GDP), remittances (12 per cent of GDP) and ODA (17 per cent of GNI), low share of food production (10 per cent of GDP) and large proportion (nearly 70 per cent) of the population living in rural areas makes it extremely vulnerable to external shocks. Following the recommendations of the United Nations in resolution A/59/209 of 20 December 2004, Cape Verde created a consultative mechanism named “Groupe d’Appui à la Transition” (GAT) in May 2006 which reiterated Cape Verde’s commitment to graduate from the LDC list as well as the commitment of GAT members to support the Government’s efforts to transform the national economy in order to combat poverty and unemployment.
Further integration of Cape Verde in the world economy depends crucially on government policies to enhance macroeconomic stability and continuing to implement structural reforms by removing barriers to productivity of growth and encouraging private sector-led development. It will also depend on the continued international support of the development partners. Luckily, a number of bilateral and multilateral donors signaled that their special partnerships with Cape Verde will be not affected by its graduation.