IMF and LDCs A developing country, also called a less-developed country (LDC), is a nation with a low living standard,

underdeveloped industrial base, and low Human Development Index (The Human Development Index (HDI) is a composite statistic of life expectancy, education, and income indices to rank countries) relative to other countries. There is no universal, agreed-upon criteria for what makes a country developing versus developed and which countries fit these two categories, although there are general reference points such as the size of a nation's GDP compared to other nations. Kofi Annan, former Secretary General of the United Nations, defined a developed country as follows. "A developed country is one that allows all its citizens to enjoy a free and healthy life in a safe environment." The World Bank classifies countries into four income groups. These are set each year on July 1. Economies were divided according to 2011 GNI per capita using the following ranges of income: Low income countries had GNI per capita of US$1,026 or less. Lower middle income countries had GNI per capita between US$1,026 and US$4,036. Upper middle income countries had GNI per capita between US$4,036 and US$12,476. High income countries had GNI above US$12,476. Gross national income (GNI) comprises the total value produced within a country (i.e. its gross domestic product), together with its income received from other countries (notably interest and dividends), less similar payments made to other countries. The World Bank classifies all low- and middle-income countries as developing but notes, "The use of the term is convenient; it is not intended to imply that all economies in the group are experiencing similar development or that other economies have reached a preferred or final stage of development. Classification by income does not necessarily reflect development status." The development of a country is measured with statistical indexes such as income per capita (per person) (gross domestic product), life expectancy, the rate of literacy, et cetera.

IMF concessional lending is provided through the Poverty Reduction and Growth Facility at a fixed interest rate of 0.5 percent, as compared to the charges levied on the use of the General Resources Account,15 which, at current market interest rates, entail a degree of concessionality (or a grant element) of about one-third of the principal. The grace period for concessional loans is comparatively longer than that for standard IMF arrangements. A borrowing low-income member begins

repaying a loan five and a half years after the disbursement of the first tranche, while the grace period for a standard credit tranche is two and a half years, which can be extended up to three and a quarter years. The maturity of a concessional arrangement is, at ten years, five years longer than that of a standard IMF arrangement. Table 1 summarizes the main features so far discussed and compares the terms of concessional lending to other main forms of IMF lending.