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Least developed countries (LDCs) have so far been spared from the worst effects of the health emergency, but the fallout from the COVID-19 pandemic has impacted their economies, slowing some of the progress made towards sustainable development and long-term damage. Not only has the crisis exposed the structural weaknesses of the least developed countries, but also the profound flaws in the international support measures available to them. It also brought to the fore the central role of production capacities for a sustainable, inclusive and resilient recovery.
UNCTAD 2020 Report on Least Developed Countries: Production Capacities for the New Decade argues that the expansion and full use of the productive capacities of the least developed countries remains central to improving the economic structure of the least developed countries and filling their development gaps relative to other countries. Similarly, using the UNCTAD production capacity index as a parameter, the report documents how the performance of least developed countries against the objectives enshrined in the Istanbul Action Program has been uneven and overall lackluster, with only one handful of least developed countries showing sustained progress.
The advent of digitalization and the fourth industrial revolution are changing the very nature of manufacturing capabilities and reshaping global value chains. Advanced technologies offer ample scope for spillover and productivity gains, but they also risk deepening deep-seated inequalities and technological gaps.
In this context, bold concerted policies to strengthen the productive capacities of the least developed countries are more imperative than ever; in fact, the report argues that they should be a fundamental pillar of any recovery and sustainable development strategy.
Beyond countercyclical policies, this requires:
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a boost to investment to fill infrastructure gaps and support job creation;
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forward-looking science and innovation technology frameworks; is
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courageous industrial and sectoral policies to promote internal value addition and productive links.
The international community should play its part and assist the efforts of least developed countries with adequate financial resources, adequate policy space and more effective international support measures, particularly in the area of technology transfer.
The rapid spread of the pandemic underlined that the call for a genuine global partnership to “leave no one behind” goes far beyond a moral commitment and also reflects longer-term considerations on global systemic resilience.
“Although no country has been spared from the COVID-19 crisis, least developed countries have the least ability to recover from this severe crisis, due to their inherent development deficits. For least developed countries to become resilient to future shocks and achieve sustainable development, they must invest in their production capacities for structural transformation.
The role of women and young people must be at the fore and at the center. Their efforts to advance in this direction require the active and decisive support of the international community, especially in the fields of technology, finance and commerce. International solidarity with least developed countries should be reflected in a transformative action agenda to be adopted at the UNLDC-V conference in 2022.
UNCTAD’s 2020 Least Developed Countries Report will be a valuable tool in helping least developed countries and their development partners shape a better, more resilient and inclusive future for the world’s poorest countries. “
Amina J. Mohammed,
Deputy Secretary General of the United Nations
“Least developed countries have deployed their limited means to counter the COVID-19 recession, but the countries most vulnerable to the impact of the pandemic are found. The international community must show its determination to assist its weaker members by giving them the tools to address the root causes of their vulnerabilities.
UNCTAD analysis and empirical work make an important contribution to addressing these causes. The time to act is now. Least developed countries deserve an action plan focused on the development of productive capacities for their successful structural transformation. “
Mukhisa Kituyi,
UNCTAD Secretary General
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