Poor countries marginalised despite export growth

FAILURE TO diversify and add value during years of plenty has left the economies of poor and developing nations at risk during the global economic slowdown, according to a new Unctad report. The Least Developed Countries Report 2008 found that the world’s 50 poorest nations saw the value of their exports climb by a collective 80% between 2004-2006 and recorded their highest rates of economic growth in 30 years, surpassing the 7% target set by their governments and their development partners. But their increased dependence on selling a few unsophisticated products – primarily petroleum, lowtechnology manufactures, minerals, ores, metals, and farm goods – leaves them vulnerable to a reversal, say the authors. There are 33 countries classified as LDCs in Africa, 10 in Asia, five in the Pacific and one in the Caribbean. Despite their recent record export performance, LDCs remain marginalised in the global economy – in 2006, the overall value of their output and export share remained below 1% of the global value of output (0.5%) and as a share of world merchandise exports (0.8%). A world economic slowdown is likely to lead to a drop in demand for the primary commodities on which the LDCs rely, and could lead to a repeat of the boom-and-bust cycles that have long characterised LDC economies. The vulnerability of the world´s poorest countries is apparent in social unrest related to the food crisis that has already occurred in eight LDCs, the report warns. It adds that a number of LDCs are dependent on imported food. To build economic resilience, the LDC economies need to improve agricultural productivity and diversify their economies to create non-agricultural employment opportunities.