Their ability to respond to and recover from crises such as COVID-19 pandemic, and to advance towards sustainable development, is dependent on increasing production capacities, UNCTAD’s Least Developed Countries Report 2021, released on Monday notes, calling specifically for increased investment in State and productive capacities for the Least Developed Countries (LDCs) grouping.
"Today LDCs find themselves at a critical juncture," said UNCTAD Secretary-General Rebeca Grynspan in a press release oon Monday.
"They need decisive support from the international community to develop their productive capacities and institutional capabilities to face traditional and new challenges," she added.
UNCTAD defines productive capacities as the productive resources, entrepreneurial capabilities and production linkages that together determine the capacity of a country to produce goods and services and enable it to grow and develop.
Developing production allows the world’s LDCs to foster structural economic transformation, which will in turn help reduce poverty and accelerate progress towards the UN Sustainable Development Goals (SDGs).
The report warns that reaching SDGs will require massive investment and spending, which go well beyond LDCs’ own financial means.
The UN established the LDC category 50 years ago. The grouping of the world’s weakest economies has expanded from an initial 25 countries in 1971, peaking at 52 in 1991, and stands at 46 today, with only six countries progressing enough to no longer be considered an LDC.
Over the last two decades, only a handful of LDCs have displayed encouraging signs of structural transformation and meaningful productivity improvements, the report said.
LCDs recorded the worst growth performance in about three decades during 2020. The COVID-19 pandemic has dramatically highlighted their institutional, economic and social shortcomings, the report highlights.
LDCs’ limited resilience is reflected in their low COVID-19 vaccination rates, as only 2% of their population have managed to get shots, compared with 41% in developed countries.
Grynspan urged LDCs’ development partners to consider the special needs of the more than one billion living in these countries during UNCTAD’s upcoming conference in October, under the theme, From inequality and vulnerability, to prosperity for all.