Bhutan will move up from UN’s Least Developed Countries (LDC) list due its Gross National Income (GNI) growth and social development, after the conclusion of its 12th five year plan in 2023.

However, two other South Asian nations, Nepal and Bangladesh, will continue in the LDC category although they have recorded progress, the UN panel that recommends changes to the list said on Thursday.

The Committee on Development Policy (CDP) announced that it was recommending that the Himalayan kingdom was ready to move out of the LDC pool “because of its increasing national earning power as well as access to better health care and education”.

“Bhutan is a very interesting success story of social progress and also economic progress,” CDP chair Jose Antonio Ocampo told reporters. “They have done very big investments in human development.”

Countries which are classified as LDC have preferential access to development assistance and trade but an interim arrangement spread over many years will smooth their transition when they graduate.

To graduate out of LDC list, a country has to meet two of the three criteria during two successive triennial reviews.

Bhutan met two; the criteria for income, with its GNI tripling between 2003 and 2018, and for the human assets index, which measures health and education, with falling under-five mortality rate and a doubling of secondary enrollment, CDP said.

It did fall short in the third category that measures economic vulnerability, which Ocampo explained, was because “they are very specialized economically” dependent on electricity exports. “They are diversifying, but they are still highly dependent on the export of electricity to India, the major export sector of Bhutan,” he said. But “they are in the process of diversifying. Tourism is one of the major new sectors for them”.

He said that the Committee on Development Policy (CDP) agreed to make the LDC graduation effective after the conclusion of its 12th five year plan in 2023 to ensure a smooth transition, reports The Morung Express.

The recommendation for Bhutan to be dropped from the LDC list – along with three others, Kiribati, Solomon Islands and Sao Thome and Principe – now goes to the UN Economic and Social Council.

If approved by it, the General Assembly will make the final decision later this year.