Cape Verde graduated in December 2007.  The continued successful integration of Cape Verde in the world economy depends on government policies and support from its development partners. Graduation will involve challenges, in particular, in reconciling the possible reduction in grants and concessional financing support with the country's dependency on aid. 

          Cape Verde is the first LDC to graduate under the new smooth transition strategy resolution adopted by the UN General Assembly for countries graduating from the list of least developed countries. The resolution urges all development partners to support the implementation of the transition strategy and to avoid any abrupt reductions in either official development assistance or technical assistance provided to the graduated country. In line with the General Assembly resolution, Cape Verde prepared a transition strategy in consultation with its development partners under the so-called Groupe d’Appui à la Transition (GAT) comprising the vision and commitment of the Government and its partners for the smooth transition of the country from the LDC category.

        So far, a number of development partners have signaled that their special partnerships with Cape Verde will not be affected by its graduation:

• Cape Verde has been granted a period of transition allowing to benefit from the LDC specific GSP Everything But Arms initiative from the European Union for 3 years.
• Portugal and Cape Verde signed a cooperation agreement covering the next four years, worth 70 million euros.

or, started a new collaboration:

• Trade-related technical assistance through the Integrated Framework (IMF, ITC, UNCTAD, UNDP, World Bank and the WTO) launched in September 2007.

Others appear to interpret the graduation of the country as the beginning of a new era:

• The Dutch Government seems to have decided to adjust its development cooperation relationship with the country: reduced development cooperation and a new emphasis on political, economic and cultural cooperation.
• UNCDF no longer funds projects in Cape Verde.

           For the near future, the overall picture seems to be that some donors may scale down their assistance, but that most may maintain, and a few even increase, their cooperation.  On its part, Cape Verde is preparing for possible declines in ODA by strengthening revenue mobilization, promoting private sector development, and attracting capital flows.

         The CDP will continue to monitor the development progress of Cape Verde and report its findings to ECOSOC in 2009.