Current account balance of Least Developed Countries (LDCs), 2000–2021, in billions of current dollars. Graphic: UNCTAD

15 December 2016 (United Nations) – Even as the international community pledged to ‘leave no one behind’ with the adoption of the 2030 Agenda, the United Nations Conference on Trade and Development (UNCTAD) has warned that without stronger global support, 48 of the world’s most vulnerable countries will lose ground in economic development and face increasing levels of poverty.

UNCTAD’s The Least Developed Countries Report 2016: The Path to Graduation and Beyond – Making the Most of the Process, released earlier this week, underscores the need for more action from the international community to help these countries progress.

“These are the countries where the global battle for poverty eradication will be won or lost," stated stated UNCTAD Secretary-General Mukhisa Kituyi, stressing that a year ago, the global community pledged to “leave no one behind” – the rallying call at the heart of the 2030 Agenda and its Sustainable Development Goals (SDGs) – but that is exactly what is happening to the least developed countries.

The proportion of the global poor in those countries has more than doubled since 1990, to well over 40 per cent. They also currently account for the 1.1 billion people worldwide who do not have access to electricity – an increase of two thirds.

Many of these countries are stuck in poverty, where the only way out is with finance, trade and technology support. Countries can also graduate from the category if they meet a certain economic and social criteria. However, for many this goal remains out of reach.

In addition, in order to achieve a long-term development, each country needs to take more than one step. Countries also require what the Report calls “graduation with momentum” – a process of structural change to increase the productivity of their economies, criteria which many graduated countries will not meet.

“Graduation is not the winning post of a race to escape from the [least developed country] category. It is the first milestone in the marathon of sustainable long-term development,” said Mr. Kituyi, adding that ‘how’ is just as important as ‘when’ in terms of graduation.

The Report actively targets the issue of insufficient international support that least developed countries receive to fulfil their developmental needs.

The report suggests a few measures that can be taken, such as faster progress towards 100 per cent duty-free and quota-free access for least developed country exports to developed country markets, renewed efforts to break the stalemate on special and differential treatment for the country’s in World Trade Organization negotiations, improved monitoring of technology transfer to, and fulfilment by donors of their long-standing commitments to provide 0.15–0.20 per cent of their national income for assistance to the least developed countries, to make aid more stable and predictable, and to align it more closely with national development strategies.

Caught in ‘poverty trap,’ least developed countries being left behind – UN report

Least Developed Countries (LDCs) percent share in world population, poverty, and infrastructure shortfalls, 1980–2014. Graphic: UNCTAD

Deteriorating economic performance

Following several years of apparent resilience to the international economic and financial crisis, economic growth in  the  least  developed  countries  (LDCs)  has  declined  steeply  since  2012,  reaching  a  low  of  3.6  per  cent  in  2015. This is the slowest pace of expansion this century, and far below the target rate of at least 7 per cent per annum recommended  by  the  2011  Programme  of  Action  for  the  Least  Developed  Countries  for  the  Decade  2011–2020 (the so-called Istanbul Programme of Action (IPoA)). Thirteen LDCs experienced a decline in gross domestic product (GDP) per capita in 2015. This performance has been strongly influenced by the sharp decline in commodity prices, which  has  particularly  affected  African  LDCs.  Such  weak  economic  growth  is  a  serious  obstacle  to  generating and  mobilizing  domestic  resources  for  structural  transformation  and  investment  in  the  development  of  productive capacities.  It  also  hampers  progress  towards  the  United  Nations  Sustainable  Development  Goals.  This  economic slowdown is likely to be reinforced by the current world economic climate, which remains lacklustre in its recovery.

Depressed exports as a result of falling commodity prices, with a smaller decline in imports, have also led to a doubling of the merchandise trade deficit of LDCs as a group from $36 billion in 2014 to $65 billion in 2015. The largest increase in the merchandise trade deficit took place in the subgroup of African LDCs and Haiti. The services trade deficit fell somewhat for the LDCs as a group, from $46 billion in 2014 to $39 billion in 2015, as a shrinking deficit  across  African  LDCs  and  Haiti  more  than  offset  an  increasing  deficit  across  Asian  and  island  LDCs.  These developments largely account for an increase of almost one third in the LDC current account deficit to a record $68.6 billion in 2015, a trend that is expected to continue over the medium term.

Domestic resource mobilization has been recognized by the Addis Ababa Action Agenda of the Third International Conference on Financing for Development and the 2030 Agenda for Sustainable Development (2030 Agenda) (both adopted in 2015) as an important process for LDCs to finance their development. However, this objective remains elusive  for  most  LDCs  due  to  their  external  resource  gaps,  the  complexity  of  their  development  challenges,  their narrow tax bases, deficiencies in tax collection and administration, resources forgone due to illicit financial flows, and the underdevelopment of their domestic financial sectors. The external resource gap of LDCs as a whole increased to 3.2 per cent of GDP in 2014, due mainly to an increase in fixed investment in Asian LDCs that was not accompanied by  a  corresponding  rise  in  their  domestic  savings.  If  LDCs  are  to  raise  their  fixed  investment,  as  is  essential  for structural  transformation,  the  deficit  will  inevitably  widen  in  the  coming  years,  particularly  in  view  of  the  enormous financing needs associated with the Sustainable Development Goals.

The Least Developed Countries Report 2016


  1. Anonymous said...

    The only way to reduce carbon emissions, is to raise the standard of living of those in the third world.  

  2. Anonymous said...

    the word 'sustainable' is pretty much meaningless these days, completely co opted and only means sustaining the status quo of industrial civilization, capital accumulation and bourgeois reality.  

  3. Anonymous said...

    "The only way to reduce carbon emissions, is to raise the standard of living of those in the third world. "

    Increased standards of living increase carbon emissions (resource consumption). This is not the answer.

    The answer is always this: less, not more. People, resource use, carbon emissions, etc., especially in developed countries like the US.  

  4. Anonymous said...

    "The answer is always this: less, not more." Then why the constant hand wringing over third world poverty? The owner of this blog, and many of its readers really need to read, The Psychology of Modern Leftism.  

  5. Anonymous said...

    Income inequality has NO effect on happiness in affluent countries and even a positive effect in developing nations.


  6. Anonymous said...

    You've just interjected a conjecture and most likely, a straw argument.

    The only people "hand wringing" over poverty are those that accept growth as the answer. Which includes you.

    More growth is definitely not the answer. It's not conjecture to say "we tried that already" to discover that it does not work, has led to widespread destruction, suffering, injustice and oppression.  

  7. Dennis Mitchell said...

    leftism and rightism are both tribes that keep us from real solutions. Somewhere between the left and right but a good bit higher rests the brain. Maybe we should use that. Minimal levels of food, shelter, health care, and education, can be cheap. Much cheaper than any governmental bureaucracy could provide. It would need to be a social unit. Organic bottom up structures. Imagin health care funded by voluntary contributions. Or the government being considered a charity. I know im smokin some good stuff....  

  8. Anonymous said...

    The point is, many so called environmentalists, are as concerned or more so about social justice causes, as they are environmental ones. Many of these causes are in direct conflict with a better environment. For instance I have suggested that people in the developed world, work as little as possible and adopt a life of voluntary poverty. This sounds like an environmentalist dream right? Of course many strongly reject this proposal. Why is that? How could that be? It's because of their grand plans for the world, and those grand plans involve taxing people in the developed world, even more than they already are. This is why I have adopted this life for myself, and use the internet and you tube to encourage others to do the same. Only this type of change will truly make an impact of the environment.  

  9. Anonymous said...

    Many so-called "right to lifer's" refuse to see the connection between growing populations, declining resources and environmental destruction. They believe one triumphs over the other. I don't. I don't even rate humans at the most important species.

    There is little balance anywhere.

    I love the idea of bottom up structures, but pretty sure this has been broadly tried. It was outlawed.

    Humans appear to be hard-wired to insist on more. I like hot showers. It would be difficult to just say no. I like a lot of things, but then again, I'm actually one of the more honest people I know and will admit to the truth of the matter.

    My view is a different world too - with less people, but a high standard of living. Never going to happen of course, much too late for that. But it could have.

    I've got a child (grown and married) who thinks her lifestyle is going to change the world (minimalist, vegan). I wish it were true. Until we do something serious about population, it's all just so much wishful thinking.

    Self-poverty won't accomplish anything on a scale larger then that individual. It won't defund the corporations or reduce the consumption or contributions. It won't stop global warming at all. It won't even save much in the way of resources, not even if 10,000,000 people subscribed. There have been studies on this.

    It's people, people. Too many, and especially too many in highly developed countries (because they use the lion's share of resources and energy).

    Until that changes, nothing changes.  


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