Global financial crisis threatens progress of least developed countries – UN report

24 September 2012

The ongoing financial crisis and weak global economic growth have hampered development in the world’s poorest nations, a United Nations report has warned, adding that half of the world’s least developed countries now risked missing their development goals.

The Enabling the Graduation of LDCs report, produced by the UN Conference on Trade and Development (UNCTAD) and released on Friday, points to case studies on Zambia, Benin and Cambodia, which demonstrate that the continuing global economic upheaval had severely weakened and, in some cases, reversed economic gains in the world’s 48 Least Developed Countries, or LDCs.

In his presentation of the report, the Director for UNCTAD’s Division on Africa, Least Developed Countries, and Special Programmes, Taffere Tesfachew, noted that in Zambia, the estimated loss in mining production and reduced exports between 2009 and 2010 had caused the country to lose up to 22 per cent in government revenues.

Moreover, during the previous year, between June 2008 and June 2009, the total job loss in Zambia’s mining sector amounted to 30.4 per cent of the sector’s total labour force.

“The recent economic and financial crisis has severely weakened the abilities of many LDCs to maintain steady income and spending,” said Mr. Tesfachew, adding that the study’s findings in Cambodia – where an estimated 63,000 jobs were lost between June 2007 and June 2008 – also indicated a downward global trend among the LDC category.

According to the report, Benin also demonstrated a negative trend with the study showing that the proportion of people living in absolute poverty had increased from 33.4 to 34.4 per cent during the 2007 to 2009 biennium.

Last year’s Fourth UN LDC Conference, held in Istanbul, resulted in a Programme of Action which set the target of having at least half of the LDCs emerge from their classification as “least developed” by 2020.

Only three countries – Botswana, Cape Verde, and the Maldives – have ever succeeded in graduating from the LDC ranking in the 40 years since the category has existed.

The island nation of Samoa is expected to exit in 2014, while the world’s youngest nation, South Sudan, is soon slated to join the ranks of the LDCs, raising the official number of countries to 49.

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