How can research help Least Developed Countries achieve sustainable development?

By Kunal Sen, Director of United Nations University – World Institute for Development Economics Research (UNU-WIDER)

 Portuguese church, Mozambique

The next decade is a make-or-break for the world’s most vulnerable countries. To tackle the unprecedented confluence of COVID-19, climate, and economic crises, new solutions are desperately needed. Scientific research is one key for finding long-lasting solutions.

Least developed countries (LDCs) are low-income countries that face severe structural impediments to sustainable development. These countries are highly vulnerable to economic and environmental shocks and have low levels of human assets. Most LDCs suffer simultaneously from multiple development challenges, ranging from socioeconomic and environmental ones, to those related to security and governance. This makes settling on a sustainable development path a particularly daunting task – one that is aggravated by the often dire lack of data and evidence on which a country could effectively plan its policies, and weak financial resources to produce new knowledge.

Mozambique – a country rich in both natural resources and problems

The above is the case for Mozambique — a country rich in natural resources yet with one of the highest poverty rates and lowest ratings in educational attainment. A country that is prone to climate change-induced extreme weather events, with an ongoing natural resources-related armed conflict, and a debt crisis. Data and evidence are scarce, even for Mozambique’s priority sectors, and most of it is produced within one-off donor-driven projects, leading to a lack of comparable data over time.

However, through a collaborative research programme implemented in 2015, gathering two Mozambican institutions — the Ministry of Economics and Finance, and the University Eduardo Mondlane — and UNU-WIDER and the University of Copenhagen, the Mozambique government has been able to gain access to new data, analyse policy-relevant evidence and adopt policies that benefit the poorest and most vulnerable groups. One example of this partnership is the work done on poverty analysis, including the production of Mozambique’s National Poverty Assessments every five years. Thanks to our long-term collaboration, the poverty team at the ministry is now knowledgeable in this area, can explain and defend the methodology to other ministers and apply new data to ensure continuity.  

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It’s time to move beyond a debt moratorium and finance productive capacities in least developed countries

By Paul Akiwumi, Director, Division for Africa, LDCs and Special Programmes, UNCTAD

According to recent UNCTAD analysis, most LDCs will likely take several years to recover the level of GDP per capita they had in 2019, and compared to developed countries, which may experience a short V-shaped recovery, the median LDC would take roughly three years to climb back to pre-COVID-19 levels of output per capita. Moreover, extreme poverty in LDCs is projected to rise to 35%, equivalent to 32 million people, due to the pandemic.

Confronted with looming fiscal distress, LDCs will need further long-term support to recover and address the structural economic challenges they face. Beyond the recovery, for LDCs to achieve inclusive development, global action should be geared towards supporting LDCs build their underdeveloped production systems.

Looming fiscal distress

For many LDCs, COVID-19 has precipitated a fiscal crisis. Rising health-care expenditures, slowing trade and support programmes to smooth consumption have increased already high debt levels in these countries.

Before the onset of the COVID-19 crisis, five LDCs were already in debt distress and 13 more were at high risk of debt distress.  Most of these LDCs had received debt relief only 10 to 15 years earlier, under the Heavily Indebted Poor Countries Initiative or the Multilateral Debt Relief Initiative.

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Least Developed Countries have 13 years to meet global trade rules, but still lack critical flexibility at the WTO

By Rachel Thrasher, Researcher, Boston University Global Development Policy Centre

By only granting a 13-year extension in a critical time for economic recovery from COVID-19, Members of the World Trade Organization may be creating more severe challenges for Least Developed Countries and the global economy down the road.

Without much fanfare, on June 29, 2021, the member countries of the World Trade Organization (WTO) quietly agreed to extend the transition period for least-developed countries (LDCs) to implement the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS Agreement) for another 13 years.

The recently granted extension falls substantially short of what was requested, though it is slightly longer than the previous two nine-year extensions. The news has received relatively little attention in the midst of negotiations for vaccine access and pandemic fears about new vaccine-resistant variants, but to be sure, the failure to acknowledge the need for a longer-term transition period has substantial impacts for LDCs’ development trajectories.

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COVID-19 pandemic: threats to SMEs in poorest nations require swift policy action

By Frank Hartwich and Jenny Larsen, United Nations Industrial Development Organization (UNIDO)

Factories around the world roared into action again in the second half of 2020, following the COVID-19-related slump that brought large parts of industrial production to a standstill in early 2020. The bounce back, led by Europe, China and other parts of Asia, has been faster than expected, with most of the losses felt in the first half of 2020 recovered by early 2021, although there are big differences between regions and sectors.

Using the limited data available, it appears that manufacturing in selected LDCs has also staged a recovery. UNIDO’s Index of Industrial Production (IIP) – only available for four of the 46 LDCs – showed a dramatic drop in the early part of 2020, followed by a sharp rise in early 2021, although a closer look at the data reveals a nuanced picture. Mozambique and Senegal saw little impact from the pandemic whereas in Bangladesh and Rwanda the effects were much stronger. In general, within low-tech industries which predominate in LDCs, the food industry benefitted from the pandemic while other sectors such as textiles, clothing and leather were hit particularly hard.

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Amid cyclones and COVID-19, Vanuatu makes bold decision to graduate from ‘least developed country’ category

By Violeta Gonzalez Behar, Head of Partnerships, Outreach and Resource Mobilisation, Enhanced Integrated Framework (EIF), World Trade Organization & Michelle Kovacevic, Communications Specialist and Consultant for EIF

Fresh fruit and vegetable market in Port Vila, Vanuatu. Photo: Shutterstock

On 4 December 2020, Vanuatu shed its official classification as one of the world’s least developed countries (LDC). This significant milestone – called ‘graduation’ – is something that only five other countries have managed to achieve in the last 40 years. And Vanuatu’s graduation achievement may be the most impressive of all given that, over the past few years, not only has it has weathered significant economic and social fallout from repeated natural disasters, but also a major drop in tourism revenue due to border closures during the global COVID-19 pandemic.

At this time of exacerbated economic vulnerabilities, some have questioned whether this is the right time for Vanuatu to leave its LDC status behind. Indeed it is a courageous choice – on the surface it may seem that there is more to lose than gain from graduation. Graduating countries usually surrender international support measures earmarked for LDCs such as preferential market access, targeted multilateral aid funding, free legal advice and technical assistance from some United Nations agencies, as well as travel support to attend international UN meetings.

While the impact of losing international support measures will depend on what goods a country exports, the trade agreements it is part of, and other factors, the UN’s Committee for Development Policy’s (CDP) LDC graduation impact assessments have shown that the loss of these measures doesn’t actually make much of a practical difference.

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Building productive capacities can avert a lost decade in the poorest countries

By Dr. Perks Master Ligoya, Ambassador and Permanent Representative of Malawi to the United Nations and Mr. Paul Akiwumi, Director, Division for Africa, Least Developed Countries and Special Programmes, UNCTAD

Dhaka, Bangladesh, on April 4, 2020. Photo: Mamunur Rashid, Shatterstock

The COVID-19 crisis shook the very foundations of the international system, triggering an abrupt and severe global recession, which threatens to heighten economic contagion.While no country is spared, the coronavirus has hit the world’s poorest nations disproportionately.  

The 46 least developed countries (LDCs) were already  highly exposed due to weak healthcare services and their lower levels of socio-economic resilience. Despite relatively strong growth in LDCs prior to the outbreak, the effects of the crisis will reverse years of painstaking economic and social progress. The potential long-term impacts, including secondary and tertiary shocks, and spillover effects on production, job creation, household income, domestic finances and investment mean that LDCs will continue to rely on external financing to sustain their much-needed development.

However, the outlook for official development assistance (ODA) is bleak as donor countries focus on domestic economic stresses. High levels of informality, limited IT access and skills shortages, and fragile industrial sectors coupled with weak integration into global value chains also hamper the uptake of new technologies in LDCs.

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Regional Comprehensive Economic Partnership: why should it involve the excluded LDCs?

By Mustafizur Rahman, Distinguished Fellow, Centre for Policy Dialogue (CPD)

The world’s largest trading bloc, the Regional Comprehensive Economic Partnership (RCEP), was signed in November 2020, counting 15 Asian member countries. Should the excluded countries, more specifically the low income and least developed countries (LDCs) of Asia, be worried about this development?

In recent years, the number of regional trading arrangements of various types, dealing with trade in goods or services or both, has been on the rise. 305 regional trade arrangements are already in force and the World Trade Organisation has been notified of another 496 currently under negotiation. However, the RCEP stands out for several reasons. The ten original members of the ASEAN Free Trade Area (Brunei, Indonesia, Philippines, Cambodia, Singapore, Lao PDR, Malaysia, Myanmar, Thailand and Vietnam) have now joined hands with five of the six countries with which ASEAN had bilateral free trade areas – China, Japan, South Korea, Australia and New Zealand. India opted out at the last moment, but the door has been kept open.

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How can island states reimagine tourism for green recovery?

Riad Meddeb, Senior Principal Advisor for Small Island Developing States, UNDP


This blog is part of a series on tackling COVID-19 in developing countries. Visit the OECD dedicated page to access the OECD’s data, analysis and recommendations on the health, economic, financial and societal impacts of COVID-19 worldwide. This blog is also a part of a thread looking more specifically at the impacts and responses to the COVID-19 crisis in Least Developed Countries (LDCs).

Grenada’s Molinere Bay Underwater Sculpture Park, Molinere Beauséjour Marine. Credit: Grenada Tourism Authority

Small Island Developing States (SIDS) have experienced great success in expanding their tourism industries, particularly over the past 10 years. The industry is an economic lifeline and driver of development for many SIDS. Their rich biodiversity and beautiful ecosystems attracted around 44 million visitors in 2019. However, global travel restrictions imposed as a result of the COVID-19 pandemic have devastated SIDS’ economies. Compared to Gross Domestic Product (GDP), export revenues from tourism represent about 9% of SIDS economies. In countries like St. Lucia and Palau, tourism revenues make up 98 and 88 percent of total exports respectively. It is a vital source of revenue for community livelihoods, disaster recovery, biodiversity and cultural heritage preservation.

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Lessons from LDCs’ responses to COVID-19: From crisis to opportunities?

By Ratnakar Adhikari, Executive Director, Enhanced Integrated Framework


This blog is part of a series on tackling COVID-19 in developing countries. Visit the OECD dedicated page to access the OECD’s data, analysis and recommendations on the health, economic, financial and societal impacts of COVID-19 worldwide. This blog is also a part of a thread looking more specifically at the impacts and responses to the COVID-19 crisis in Least Developed Countries (LDCs)


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June 2020 : Staff members outside the Republican Hospital for Covid-19 Patients in Taiz, Yemen. Photo: Akramalrasny / Shutterstock.

Many least developed countries (LDCs) have not yet seen large numbers of COVID-19 cases – though there are notable exceptions such as Afghanistan, Bangladesh, Nepal and Sudan.

Yet, all LDCs are confronting severe economic disruptions – and a major fiscal squeeze – from the global demand shock, supply chain disruptions and, significantly reduced income from tourism and remittances. Domestic lockdowns to prevent the spread of the virus present unique challenges in countries with high poverty rates in which large sections of the workforce are informally employed.

At the same time, crises can come with opportunities for positive change, and the present crisis might offer this for LDCs, to undertake much-needed reforms that would place them on firmer footing as economic recovery takes hold. A few LDCs have done just that, examples of which are below. Continue reading

Don’t put export bans on medical supplies during COVID-19. Why trade should flow freely to the world’s poorest countries

By Violeta Gonzalez Behar, Head, Partnerships, Outreach and Resource Mobilization, Enhanced Integrated Framework, World Trade Organization


This blog is part of a series on tackling COVID-19 in developing countries. Visit the OECD dedicated page to access the OECD’s data, analysis and recommendations on the health, economic, financial and societal impacts of COVID-19 worldwide.
This blog is also a part of a thread looking more specifically at the impacts and responses to the COVID-19 crisis in Least Developed Countries (LDCs).



export-medical-covid19-tradeWith coronavirus spreading fast and now present in 185 countries, the pandemic has already reached some of the world’s poorest countries. We are all familiar with the headlines pointing to a shortage of masks, ventilators, gloves, gowns and face shields across countries. Fear and hoarding is only magnifying scarcity.

Amidst the uncertainty surrounding the availability of medical supplies, it may be tempting for governments to save supplies for their own citizens. And this is exactly what is playing out at the global level. Currently there are over 80 curbs on exports of essential COVID-19 medical supplies and medicines that have been introduced by 76 nations this year.

The consequences of such actions are already visible in countries like Italy, Spain, the United Kingdom and the United States. Now imagine how life-threatening this could be in the poorest countries, an example being the Central African Republic, where there are only three ventilators in the entire country. Continue reading