The Least Developed Countries Report 2020

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Productive capacities for the new decade

Least developed countries (LDCs) have so far been spared from the worst effects of the health emergency, yet the fallout from the COVID-19 pandemic has taken its toll on their economies, rolling back some of the progress made towards sustainable development and possibly leading to long-term damage. Not only has the crisis laid bare structural weaknesses of LDCs, but also the deep-seated flaws of the international support measures at their disposal. It has also brought back to the fore the pivotal role of productive capacities for a sustainable, inclusive and resilient recovery.

UNCTAD's The Least Developed Countries Report 2020: Productive Capacities for the New Decade maintains that the broadening and full utilization of LDC productive capacities remains central to upgrade LDC economic structure, and bridge their development gaps vis-à-vis other countries. In the same vein, using UNCTAD's Productive Capacities Index as a yardstick, the report documents how the performance of LDCs against the objectives enshrined in the Istanbul Programme of Action has been uneven and overall lackluster, with only a handful of LDCs displaying sustained progress.

The advent of digitalization and the Fourth Industrial Revolution are modifying the very nature of productive capacities and reshaping global value chains. Advanced technologies offer ample scope for spillovers and productivity gains, but also risks deepening entrenched inequalities and technological divides.

Against this background, bold concerted policies to strengthen LDC productive capacities are as imperative as ever; in fact, the report maintains that they should constitute a key pillar of any sustainable recovery and development strategy.

Beyond countercyclical policies, this calls for:

  1. an investment push to redress infrastructural gaps and support employment creation;

  2. forward-looking science technology and innovation policy frameworks; and

  3. brave industrial and sectoral policies to promote domestic value addition and productive linkages.

The international community should play its part, and assist LDC efforts with adequate financial resources, suitable policy space and more effective international support measures, notably in the area of technology transfer.

The rapid spread of the pandemic has underscored how the call for an authentic global partnership to "leave no one behind" goes well beyond a moral commitment, and also reflects longer-term considerations on global systemic resilience.


"A prolonged COVID-19 crisis threatens to worsen the already weak economic base of the least developed countries (LDCs) and has effectively reconfigured global value chains in ways that further disadvantage LDCs.

The Least Developed Countries Report 2020: Productive Capacities for the New Decade highlights the importance of public investment for LDCs to address their short-term needs. It emphasizes the importance of comprehensive support for meso-level policies for productive capacity development in the context of addressing structural constraints and building the resilience of these countries. The international community should rally to the report's call for greater solidarity and stronger international support to avert this crisis and build long-term resilience through fostering productive capacities. In this context, I also call on developed countries to understand that much like addressing the COVID-19 pandemic, tackling the acute development challenges LDCs face is a multilateral issue par excellence, and as such, should be a top priority for the international community."

H.E. Dr. Lazarus McCarthy Chakwera,
President of the Republic of Malawi

 

"While no country has been spared from the COVID-19 crisis, the least developed countries have the least capacity to rebound after this major crisis, due to their inherent development deficits. For least developed countries to become resilient to future shocks and attain sustainable development, they must invest in their productive capacities for structural transformation.

The role of women and youth must be front and centre. Their efforts to advance in this direction demand the active and decisive backing of the international community, especially in the fields of technology, finance and trade. International solidarity with the least developed countries should be reflected in a transformative programme of action to be adopted in the UNLDC-V Conference in 2022.

UNCTAD's The Least Developed Countries Report 2020 will be a valuable tool to help least developed countries and their development partners shape a better and more resilient and inclusive future for the world's poorest countries."

Amina J. Mohammed,
Deputy Secretary-General of the United Nations

 

"The least developed countries have deployed their limited means to counter the COVID-19 recession, but they find themselves the countries most vulnerable to the impact of the pandemic. The international community needs to show its resolve to assist its weakest members by giving them the tools to tackle the root causes of their vulnerabilities.

UNCTAD analysis and empirical work offers a major contribution towards addressing these causes. The time to act is now. The least developed countries deserve a plan of action focused on developing productive capacities for their successful structural transformation."

Mukhisa Kituyi,
Secretary-General of UNCTAD