This paper aims to draw insights from New Structural Economics by applying its practical policy tool - the Growth Identification and Facilitation Framework (GIFF) - to least developed countries (LDCs) with a special focus on the case of Uganda. The GIFF offers practical development paths for enabling developing countries to follow comparative advantage in its industrial development and to tap into the potential of advantages of backwardness in industrial upgrading in an effort to achieve sustained and dynamic growth. After a brief introduction of the GIFF, we present an overview of Uganda's recent economic and social performance and analyse Uganda's factor endowments, i.e., land (or…
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Economic growth, environmental sustainability and human development in the Solomon Islands have lagged much of the Pacific region since independence in 1978. Trade contributes insufficiently to development, partly because of the dominance of the logging industry but also due to the lack of emphasis on building productive capacities with a view to economic transformation toward higher productivity activities. Targeted soft industrial policies may help address these shortcomings, in the form of sectoral prioritisation; linkages policies; joint government-donor support to build appropriate infrastructure; and the development of human resources in specific areas. Government institutional…
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Institutional constraints prevent the Least Developed Countries from fully utilizing the trade-related International Support Measures provided by development partners. A cost-benefit analysis has been developed as a methodology to identify institutional constraints and prioritize support measures comparing benefits with costs, based on survey data. Applied in Uganda, it identified critical institutional constraints: limited knowledge on how to access most of the assistance; inadequate institutional arrangements; ineffective communications regarding the use of support measures. International support measures related to sanitary and phytosanitary issues, among others, are expected to…
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Many intergovernmental processes, including the Istanbul Programme of Action, the post-2015 Development Agenda and the Addis Ababa Action Agenda, call for a significant increase in ODA toward LDCs. However, even if the commitments were fulfilled, their effectiveness could be minimal if no significant changes are made in the way in which donors allocate and provide ODA. LDCs are among countries with higher levels of aid-dependency, proliferation of donors and aid fragmentation. The purpose of this paper is to discuss the role that ODA can play in the development process of LDCs and the way in which aid should be allocated among countries.
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Nepal was the first Least Developed Country to negotiate its accession to the World Trade Organization. The negotiation process was demanding, yet it succeeded in securing a relatively well-balanced accession package. The purpose of this paper is to describe the contours of the negotiation process and to share lessons learned. The paper details the onerous process involved in the accession of LDCs to the WTO and describes the context of Nepal's negotiating positions. Some distinctive aspects of Nepal's approach to the process of accession are highlighted and compared with the situation of some other LDCs.
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CDP Background Paper No. 22
By Ana Luiza Cortez, Ian Kinniburgh and Roland Mollerus
The least developed country category was established by the international community for countries requiring special support measures for dealing with their structural impediments to growth. Despite the availability of these measures and the efforts of the LDCs themselves, relatively little progress has been achieved. This paper reviews some of the main international support measures from the perspective of five LDCs. It highlights country approaches to the support received and the challenges confronted in accessing the measures. For an effective use of the special support, the report stresses stronger…
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The proliferation of country groupings indicates the need to assess the effectiveness of the current system for development cooperation and to explore better ways to manage the international system, as heterogeneity among developing countries increases. Great caution should be exercised in devising new country categories. Donors can use sound criteria for aid allocation without creating new groupings. If new categories are created at all, issue-based classifications should be preferred to comprehensive categories; support should be issue-specific. Among the existing comprehensive classifications, the LDC category has significant advantages but it needs to better address the problems and…
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This paper examines the prospects of achieving a main goal of the Istanbul Programme of Action - at least half of the LDCs to meet the graduation criteria by 2020. Based on two different sets of graduation criteria established by the CDP and current trends in socio-economic indicators of LDCs, the paper concludes that the goal is unlikely to be met even under an optimistic scenario. There are considerable uncertainties about the possible outcome, partly owing to the way in which the graduation criteria are established and partly owing to the difficulty of predicting future course of socio-economic development of LDCs.
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Global evidence suggests that trade-related performance is becoming increasingly important for the socio-economic development of many developing countries. The paper finds that trade preferences accorded to Bangladesh as an LDC have played a crucial role in recent accelerated development of her economy and her significant achievements in trade and social sectors. The paper highlights the concerns that emanate from the trade preferences and proposes ways to make these more effective and beneficial for the LDCs. It concludes that Bangladesh will need to build the needed supply-side capacities and undertake necessary reforms to realize the potential opportunities provided by preferential…
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This paper reviews the role of climate change vulnerability in identifying least developed countries (LDCs). Taking a sustainable development perspective, it argues that climate change should be seen as an aggravating factor of existing handicaps and many indicators used to identify LDCs already capture relevant structural vulnerabilities to climate change. However, the paper proposes some refinements in the LDC criteria to better capture vulnerabilities from natural disasters and in coastal areas. These refinements affected the vulnerability ranking in the recent triennial review, but had no impact the eligibility of countries for inclusion in and graduation from the LDC category.
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