UN raises alarm on state of poor countries

 Supachai Panitchpakda, Secretaire General UNCTAD.

The world’s poorest countries are trapped in boom-bust cycles and their medium-term prospects are a cause for concern, the United Nations Conference on Trade and Development (UNCTAD) said in a report issued on Thursday in Addis Ababa.

The 49 states, categorised as Least Developed Countries (LDCs), weathered the global downturn better than expected, but they now need a new systematic international approach to development, rather than ad hoc emergency measures, to reduce their economies’ reliance on raw materials, UNCTAD said.

“They have not been able to benefit from any global trends to wean themselves away from increasing dependence on commodities,” UNCTAD secretary general, Supachai Panitchpakdi, told a briefing.

 

The 258 report, which was titled ‘Towards a New International Development Architecture for LDCs,’ said though these countries were coping with recession, they remain stuck in ‘boom-and-boost cycle’, which have long plagued their economies, and that their medium-term prospects posed a cause for concern.

The report said the 49 poorest countries need better-designed financing - rising from an estimated $4 billion to $17 billion per annum by 2030 - to cope with the difficulties posed by climate change.

“They will have difficulty escaping poverty and ending the chronic vulnerabilities, and even boom periods have done little to improve living standards in those countries,” it stated.

Optimistic on growth

It said that aggregate growth indicators showed that average GDP growth in LDCs was 4.3 percent in 2009, higher than in other developed countries.

It also stated that donors appear reluctant to scale up their external assistance, but that the new multilateral lending may have partly cushioned the downturn, but it certainly contributed to the build-up of external debt.

“While debt owed to official creditors remains far below its level of year 2000, in the median African LDCs it increased by 1.5 percent of GDP,” the report stated.

“By April 2010, a total of 10 LDCs were in a situation of debt distress and another 10 were at high risk of debt distress,” it said.

The report, which was jointly presented by Jean-Noel Francois of the Trade and Investment Department of the AU Commission, and Maryam Dessables of the UN Economic Commission for Africa, said in spite of the challenges, most of the LDCs would achieve the MDGs by 2015.

Source:234next.com