Summary |
The least developed countries (LDCs) are a group of countries that have been classified by the United Nations as least developed in terms of their low GDP per capita, their weak human assets and their high degree of economic vulnerability. This report argues that the impact of the global economic crisis is likely to be so severe in LDCs that “business as usual” is no longer possible. The crisis offers both the necessity and an opportunity for change. Coping with the impact of the crisis in LDCs will require dedicated policy action and resource flows, including from the international community. But beyond this, new policy approaches are necessary to ensure that development after the crisis will be more resilient and more inclusive.
The report stresses that no unique and optimal model of development exists that is applicable to all countries, therefore it calls for policy diversity and institutional learning. It recognizes the deep underlying complementarities between the public and private sectors. The need for official development assistance is underlined, but the report insists on country ownership of policies. Since institutional learning takes time and resources, policy space is essential for long-term success.
The report recognizes that LDC governments have a vital role to play in the restructuring of their economies, the development of productive capacities, and the creation of conditions for catch-up growth, including learning and the accumulation of knowledge both in the firm and on the farm. The crisis confirms that this kind of policy orientation is the only sustainable option for LDCs. This will involve broadening and adapting public action to small, open developing economies. The report sketches out a concrete, alternative economic strategy and a fresh agenda for LDC policymakers, which includes institutional capacity-building and the strengthening of the market-complementing developmental state.
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