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Jin (Lara) Zhou (Ms.) Research Assistant Intern on LDC Graduation Poverty Reduction Unit, UNDP Lao PDR Jin.lara.zhou@undp.org jz2417@columbia.edu
Table of Contents
Acknowledgement LDC Identification LDC Graduation Criteria Factsheet 1. GNI per capita GNI PC Graduation Threshold 2. HAI Introduction Methodology Sub-indicators HAI Summary HAI Graduation Threshold 2012 HAI Change over time 2009 & 2006 3. EVI Introduction Methodology Exposure Index sub-indicators Exposure Index Summary Shock Index sub-indicators Shock Index Summary EVI summary EVI Graduation Threshold 2012 EVI Change over time 2009 & 2006 Summary Summary of Equation choice Useful Reference Data Sources Sub-indicators 1. GNI per capita 2.1 Percentage of population undernourished 2.2 Under-five mortality rate 2.3 Gross secondary enrollment rate 2.4 Adult Literacy Rate
3.1.1 Population(Size) 3.1.2 Remoteness(Location) 3.1.3.1 Merchandise Export Concentration(Economic Structure) 3.1.3.2 Share of Agriculture Forestry Fishery (Economic Structure) 3.1.4 Share of Population in Low Elevated Costal Zone (Environment) 3.2.1 Instability of Exports(Trade Shock) 3.2.2.1 Victims of Natural Disasters(Natural Shock) 3.2.2.2 Instability of Agricultural Production(Natural Shock)
Acknowledgement
This material has been prepared by Jin Zhou, research assistant intern on LDC graduation roadmap in UNDPs Poverty Reduction Unit in Lao PDR. Special acknowledgement should be given to Mr. Matthias Bruckner, who is the Economics Affairs Officer at UNCDP Secretariat for his guidance and generous help on clarifying concepts, methodologies and calculations of all the indicators. Any comments should be addressed to the author by e-mail: jin.lara.zhou@undp.org. OR jz2417@columbia.edu
LDC Identification
Qualitatively
Low Income
Quantitatively
GNI Per capita
Source
http://databank.worldbank.org/ddp/home.do http://data.un.org
Note:
If a country can achieve a level of GNI per capita that is at least twice the graduation threshold, the country is eligible for graduation even if it doesnt meet either one of the two other criteria (EVI or HAI)
Graduation Threshold:1190
Graduation Threshold:1086
Graduation Threshold:900
2.HAI - Introduction
Measures human capital (Health + Education):
2.HAI - Methodology
Calculation: max-min procedure
Original data are converted into indices ranging from 0 to 100, based on minimum and maximum values in a set of reference countries. What does this mean?
I = [(V-min)/(max-min)] x 100 or II = [(max-V)/(max-min)] x 100 V=observed value for a certain indicator I=100-II, the index ranges from 0 to 100
(Summary on Equation choice)
Reference Group:
All LDCs and those whose three-year average GNI per capita income is less than 20% higher than low income threshold determined by WB. Basically its LDCs and lower income non-LDCs.
Purpose: Eliminate the effect of extreme outliers in the distribution Practice: The bounds will replace the actual country data in the calculation of the index concerned. For example: (Population) Min boundary = 0.15 million, Max boundary = 100 million Countries whose population is fewer than 0.15 million have their value of population replaced by 0.15 million. Countries whose population is larger than 100 million have their value of population replaced by 100 million.
5.00
Undernourishment the lower the better, use equation II = [(max-V)/(max-min)] x 100 Index for undernourishment = [ (65-22)/(65-5))] *100 =71.7
UNCDP draws data from FAO Food Security Statistics or UN Database http://www.fao.org/economic/ess/ess-fs/fs-data/essfadata/en/ , http://data.un.org/
Under-five Mortality the lower the better, use equation II = [(max-V)/(max-min)] x 100 Index for under-five mortality= [ (175-57)/(175-10))] *100 =71.5
Secondary enrollment the higher the better, use equation I = [(V-min)/(max-min)] x 100 Index for Secondary Enrollment = [(44.7-10)/(100-10)]*100=38.5
http://stats.uis.unesco.org/unesco/ReportFolders/ReportFolders.aspx Folder Education Table 5: Enrollment Ratios by ISCED levels Gross enrollment ratio, Secondary, all programs, total.
Literacy the higher the better, use equation I = [(V-min)/(max-min)] x 100 Index for Literacy = [(72.7-25)/(100-25)]*100 = 63.6
http://stats.uis.unesco.org/unesco/ReportFolders/ReportFolders.aspx Folder Literacy and Educational Attainment National Adult Literacy Rates (15+) The most recent data available during 2005-2010
Inclusion threshold: 60
Graduation threshold:66
2006 Review54.05
Inclusion threshold: 60
Graduation threshold:66
Inclusion threshold: 58
Graduation threshold:64
3.EVI - Introduction
Reflects the risk posed to a countrys development by exogenous shocks, the lower the better
Exposure to shock (exposure index) the higher, the lower EVI, the better Magnitude of the shock (shock index) the lower, the lower EVI, the better
3.EVI -Methodology
Same as HAI
Max-min procedure
The larger the population, the more resilient, less exposure, use equation II = [(max-V)/(maxmin)] x 100 Sub-index for Size= [(Log100 Log6.29)/(Log100-Log0.15)]*100 =42.5
Data source:
1. Market share of each country in the world markets UN Statistics National Accounts Main Aggregates Database http://unstats.un.org/unsd/snaama/ 2. Bilateral Physical Distance between Lao and other countries Centre d'Etudes Prospectives et d'Informations Internationales (CEPII) http://www.cepii.fr/anglaisgraph/bdd/distances.htm (Use Variable discap in data series: dist_cepii.xls) Bilateral Physical distance is calculated as distance between capital cities or major agglomerations
Lao
Thailand
Where can I get the market share data? = 8703.752*(50%-47.42%) =224.15 = Sum(E2:E111)/50%
UN CDP uses variable dist in data series dist_cepii.xls from CEPII Source: http://www.cepii.fr/anglaisgraph/b dd/distances.htm
Minimum Average Distance to reach 50% of the World Market Where can I get the distance data?
EVI -Exposure Index
di is the minimum average distance of country I; Dmin, Dmax is the smallest/largest minimum average distance of all 130 countries included in the calculation of the indicator; and ri is the remoteness value of country I; Example: 2012 Review Di (Lao PDR) 4792 Dmin, (Tunisia) 1885 Dmax (Tonga) 10388.4
The higher the remoteness index, the less resilient, the higher the exposure to shock. Use Equation I = [(V-min)/(max-min)] x 100 Remoteness Index = [(61.47-10)/(90-10)]*100 =64.3
http://unctadstat.unctad.org/. Access: International trade Trade Indicators Concentration and Diversification indices of merchandise exports and imports by country Concentration Index
The higher the merchandise export concentration, the less resilient to exogenous shocks, the higher EVI, use equation I = [(V-min)/(max-min)] x 100 Index for Export Concentration = [(0.3343513001 0.1)/(0.95-0.1)]*100 = 27.57
Calculation: CDP draws the data of Share of gross value added in the
Agriculture, Forestry, and Fishery sectors in GDP (%) directly from UN SNA database, and then converted to index using max-min procedure.
Example:
Get the Data: http://unstats.un.org/unsd/snaama Value-added by Economic Activity, at current price US dollars Use Variable Agriculture, hunting, forestry, fishing (ISIC A-B) for year 2008-2010
Step1: Compute AFF percentage 2008: 1588395821.05462/ 5041728866.4513 = 31.5% 2009: 1703906334.92745/ 5389768132.34538 = 31.61% 2010: 1986718614.70404/ 6214534762.18563 = 31.97% Step 2: Compute three-year average: = 1/3 (31.5% + 31.61%+31.97%) = 31.7%
The higher the share of AFF, the less resilient, the higher EVI, use equation I = [(Vmin)/(max-min)] x 100 Index for AFF = [(31.7-1)/(60-1)]*100 = 52.0
3.1.4 Share of Population in Low Elevated Costal Zone (Environment Exposure Index )
Rationale: Reflects vulnerability to coastal impacts such as sea level rise, storm
surges associated with climate change. (the higher, the less resilient, the more exposure to shocks) Definition: Low elevated coastal zone is defined as an area contiguous to the coast below 10 meters of elevation Data Source:
Columbia University, Center for International Earth Science Information Network http://sedac.ciesin.columbia.edu/gpw/lecz.jsp Download the excel, use variable G00PT_lecz for total population in LECZ and variableG00PT_ctry for total population. Note: They only updated these data until 2000 ? .
Calculation: Use the data from Columbia University and convert by using max
min procedure Notes: This is a newly introduced index from 2012 onwards. But this index doesnt really affect Lao PDR because Lao PDR is landlocked and doesnt have costal zones. NEW!!
Index on Share of population in LECZ for Lao=0
Economic Structure
Environment
2. Import Unit Values, IMF International Financial Statistics (IFS) http://www.imf.org/external/data.htm and http://data.un.org
Import Unit Values are unfortunately not available for a sufficient number of countries. Therefore, UNCDP uses import unit values for Emerging and developing countries, not for each specific country. Lao doesnt have data available for import unit values at this point. Currently, IMF IFS database only has this data from 2008-2010 for free. One has to order from IMF for a full set of data. However, this data could also be accessed from UN database although its only updated to 2009.
Using STATA
Import Data
Open Data Editor in the menu, click on start Past the data into the window Data Editor (Edit)
*generate a time trend variable* *Browse to see how the data looks now*
The higher the instability of exports, the larger the shock, use equation I = [(V-min)/(max-min)] x 100 , SE of Lao = 10.2 in this case Index for Instability of Exports = [(10.2-5)/(35-5)]*100=17.3
Definition: Victims are defined as people killed or affected (i.e., people requiring
immediate food, water, shelter, sanitation or medical assistance). It covers weather and climate-related disasters (such as floods, landslides, storms, droughts and extreme temperatures) as well as geo-physical disasters (such as earthquakes or volcanoes). Calculation: (Example of 2012Review) Average of the annual share of population killed or affected by a natural disaster
Note: For those years that dont have data recorded, it doesnt mean data is missing. It means that theres no victims or deaths. So we will have to add those years back when calculating the average. 2. Total Population:
UN DESA Population Prospects Database, http://esa.un.org/unpd/wpp/index.htm Left hand side: Table in excel format Total population both sexes Estimates
Step 2: Compute the average of the annual share of population killed or affected by a natural disaster
The higher the percentage, the larger the shock index, use equation I = [(V-min)/(maxmin)] x 100 Index for Victims = [(ln4.296-ln0.005)/(ln10-ln0.005)]*100 = 88.9
Access: http://faostat.fao.org/site/612/default.aspx#ancor FAO STATS Production Production Indices Net Production Index Number, Agriculture (PIN) + Total, Year 1990-2009 (For 2012 Review, UNCDP accessed FAOs database on 23 August 2011 and by that time the 2010 data hadnt been updated to FAOs website yet. FAO recently updated the database to extend data to 2010 and may contain some data revisions on 2009 data values. )
EVI -Shock Index
Using STATA
Import Data:
Click Data Editor in the menu, click start data editor (Edit) paste the data into the window.
*generate a time trend variable* *Browse to see how the data looks now*
1.50
The higher the standard error, the more volatile is agriculture production, the larger the shock, use equation I= [(V-min)/(max-min)] x 100 , SE of Lao = 6.35 in this case Index for Instability of Agriculture = [(6.35-1.5)/(20-1.5)]*100 = 26.2
1. 2. 3. 4.
Relative: base period 2004-2006 Volume: shows the aggregate volume of production each year. Price-weighted: Total quantities of different agricultural commodities produced are price-weighted, using 2004-2006 average international commodity prices Deduction of seed and feed: Seed and Feed are not included in the total quantities of agricultural commodities. The resulting aggregate represents, therefore, disposable production for any use except as seed and feed.
Equation:
Natural Shock
Graduation threshold:38
Inclusion threshold: 42
Inclusion threshold: 42
Graduation threshold:38
Summary -1
GNI Per capita: Absolute Value HAI Index: Relative Composite Indices EVI Index: Relative Composite Indices
Summary - 2
Reference Group for Computing HAI & EVI:
All LDCs and those whose three-year GNI per capita income is less than 20% higher than low income threshold determined by WB
Note
It is notable that to get the exact same number as UNCDP publishes for its triennial LDC review, one has to
Know the upper bound and lower bound set by UNCDP for each triennial review, this can be obtained from the LDC triennial review data (excel format) published by UNCDP once it finishes the triennial review http://www.un.org/en/development/desa/policy/cdp/ldc/ ldc_data.shtml Visit the according database at the same time UNCDP visited (databases such as FAO are frequently updated for modification of data quality). This information is usually published in the footnote of the LDC triennial review data (excel format). One can get from the same link above.
Useful Reference
2008 CDP Handbook on LDC (Detailed Explanations of Methodologies)at
http://www.un.org/esa/analysis/devplan/cdppublications/2008cdphandbook.pdf
LDC Data Retrieval (Previous LDC Review Data in 2006 and 2009) at
http://www.un.org/en/development/desa/policy/cdp/ldc/ldc_data.shtml
Data Source
World Bank Data: http://data.worldbank.org/ UN Data: http://data.un.org/ UNESCO Institute for Statistics: http://www.uis.unesco.org FAO Food Security Statistics: http://www.fao.org/economic/ess/ess-fs/en/ FAO Agricultural Production Indices: http://faostat.fao.org/site/612/default.aspx#ancor UN DESA, World Population Prospects Database: http://esa.un.org/unpd/wpp/index.htm UN STATS, National Accounts Main Aggregates Database: http://unstats.un.org/unsd/snaama/ UNCTAD database: http://unctadstat.unctad.org/. Columbia University, CIESIN database http://sedac.ciesin.columbia.edu/gpw/lecz.jsp. CEPII Database on geographic distance http://www.cepii.fr/anglaisgraph/bdd/distances.htm WHO Emergency Disaster Database: http://www.emdat.be/,