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Cape Verde Looks With Concern at Change in Ranking

The West African island nation of Cape Verde is working to change its rank as a U.N. designated lesser-developed country, but government officials say they need more help from donors. From VOA's West Africa bureau in Dakar, Phuong Tran reports the officials and donors are discussing a plan to upgrade Cape Verde's status.

The United Nations has three criteria that countries must meet to change their economic ranking; a stable resident income, good worker training, and proof of poverty reduction.

Cape Verde's foreign affairs minister, Victor Borges, says Cape Verde is only barely able to show poverty reduction.

He says this may delay or threaten its ability to move up from being a lesser-developed country by January 2008, as planned.

The island country has a long history of droughts and few natural resources. About 20 percent of the population lives in extreme poverty in barren countryside filled only with volcanic rocks and decaying colonial-era roads.

The country is heavily dependent on money from Cape Verdeans living outside the islands, as well as about $100 million in aid the country receives each year.

Ironically, an improvement in its U.N. ranking may cause Cape Verde to lose special trade benefits and low-interest loans it now depends on.

Foreign Affairs Minister Borges says without low-interest loans the country will not be able to pay its debts or continue social programs, because 85 percent of its budget comes from outside the country.

For example, he says an agreement with the World Bank now allows Cape Verde to receive zero-interest loans, even though its residents' annual income of almost $2,000 a year would not normally qualify for the aid program.

Borges says he is looking for similar agreements with other donors, as well as help with Cape Verde's nearly $300-million debt.

The minister says the world's leading industrialized countries, known as the G8, do not consider Cape Verde indebted enough to qualify for debt cancellation.

Borges says this view punishes Cape Verde for managing its donor funds well and not needing to borrow as much as its neighbors. He adds loan interest can cripple Cape Verde's chances to survive if it loses the advantages that come with being a lesser-developed country.

The island nation is scheduled to make a final report to the U.N. Secretary-General in December on its transition to a medium-developed country, which is the U.N. rank for countries that fall between lesser-developed and developed countries.

If the new rank is granted, Cape Verde will become the second country to graduate from the U.N. list of lesser-developed countries. Botswana was the first in 1994.