2008 report on least developed countries

01 Aug 2008

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The Least Developed Countries 2008 Report states that although the least developed countries (LDCs) have achieved their strongest growth performance in 2005 and 2006 exceeding the 7% target, this growth has failed to translate into poverty reduction efforts and has only slowly improved the well-being of LDCs.

New Horizons - The report stresses that this is due to wrong types of growth and development models that only allow limited segments of the population and underlines that LDCs should have greater control and flexibility over how foreign aid they receive is used so that it has the greatest positive impact. The 2008 Least Developed Countries Report titled “Growth, Poverty and the Terms of Development Partnership” prepared by the United Nations Conference on Trade and Development (UNCTAD) was launched worlwide on 17 July 2008 as well as in Ankara, Turkey.

The report assesses how sustainable economic growth is, in the LDCs and how many LDCs are participating in the growth surge, the extent to which economic growth is leading to improvements in human well-being and in particular to poverty reduction as well as progress towards country-owned development strategies in LDCs and the role of aid management policies at the country level.

The launch of the report in Ankara was attended by various diplomatic missions and the media. During his opening remarks, UN Coordinator and UNDP Turkey Resident Representative Mahmood Ayub said “it’s a tradegy that a lot of promises have been made but very little has been delivered”. Ayub stressed that the report was very comprehensive and timely. Comprehensive in a way that it covers the issues of trade, finance, trends in poverty, progress in achieving the Millennium Development Goals (MDGs), impact of global food crisis on LDCs and development partnership and timely due to the approaching meetings in September on the MDG status and the status of the Paris Declaration on Aid Effectiveness and also due to the rising concern of the impact of rising commodity prices on LDCs.

Following the opening remarks, UNCTAD Economic Affairs Officer Rolf Traeger made a presentation on the content and the results of the report (Please click here to view Trager’s presentation). Traeger reminded that more than a quarter of the UN member countries are LDCs and explained the basic message of the report. Accordingly, there is rapid growth among LDCs but this growth is not sustainable and is not inclusive, there is a need for a different development model and there is weak country ownership that constrains policy making. Traeger stated that there is uneven growth among LDCs and that income per capita grew by less than 1% in one thirds of LDCs and added that this was a very weak performance. Traeger stated that Asian LDCs followed a more benign growth trajectory than African LDC and island LDCs.

Traeger explained the growth factors in LDCs as foreign dynamics rather than domestic growth, increased overseas development assistance, debt relief by the International Monetary Fund, World Bank and other donors and commodity boom such as exports of petroleum, metals, gold and copper. Traeger stressed that these factors however were not allowing LDCs to have a sustainable growth as it caused high economic vulnerability to external shocks, high dependence on commodities and volatility of commodity prices, high reliance of external savings and an undynamic productive and export structure. Traeger stated that LDCs need a development model that would shift them from commodity-price led to “catch-up” growth.

Commenting on LDCs progress towards the Millennium Development Goals, Traeger stated that although the rate of extreme poverty had decreased since 1994, one thirds of the population of these countries was suffering from extreme poverty while those who live on more than a dollar a day but less than two dollars a day made three fourths – 75% - of the total population. Traeger stressed that poverty was higher in countries depending on oil and mineral exports in particular most African LDCs. Traeger said “the overall message is that most LDCs are off track and won’t be able to meet the MDGs by 2015”. Traeger also shared the report’s evaluation on developing partnerships and the role of aid management as well as the report’s overall recommendations.

During the launch of the report, LDCs Coordinator at the Ministry of Foreign Affairs Kenan Tepedelen also delivered a brief speech on Turkey’s role as an emerging donor country not only in the region but increasingly in Africa as well, explained Turkey’s activities in supporting LDCs and provided recommendations for the international community. Tepedelen provided facts and figures on Turkey’s assistance and stated that Turkey had provided 600 million dollars official development assistance to LDCs in 2005 while it provided 750 million dollars in 2006. Tepedelen said “improving relations and cooperation with LDCs is an important element of Turkish foreign policy” and provided a brief history of the Turkish International Cooperation and Development Agency (TİKA) which is Turkey’s major channel for international development assistance.

Today forty-nine countries are currenly designated by the United Nations as “least developed countries” and include various countries from Africa (33), Asia (10), Pacific (5) and the Caribbean (1). A country is designated a “least developed country” based on its gross national income, Human Assets Index that consists of indicators on nutrition, health, school enrolment and literacy and Economic Vulnerability Index which includes indicators on natural disasters, trade shocks and economic smallness etc.

To view the 2008 Least Developed Countries Report, please click here.