Least Developed Countries Category

The conventional approach to least developed country (LDC) graduation has considered these countries as an undifferentiated group whose problems could be solved by means of similar measures focusing on domestic and international liberalisation, preferential aid allocations, and the promotion of their exports by means of trade preferences and free market access. This paper tries to go beyond this analytical and policy tradition and attempts to identify different LDC clusters in which underdevelopment is caused by specific economic and social conditions, and for which the solution depends not only on traditional support measures, but also on the implementation of differentiated, country-specific policies sensitive to the local context.

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 natural resources), labour and capital that can be used in the production process. After identifying tradable goods and services which would fit Uganda's latent comparative advantage, we diagnose sector-specific binding constraints in starting and scaling up the selected subsectors and discuss how to remove or mitigate these key constraints. Finally, we conclude with main findings and policy recommendations. The takehome message is that developing countries should not focus on what they lack but what they have when formulating their development strategies.

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 capacity will only be allowed to improve if policymakers are permitted true ownership over policies and if they are allowed to make mistakes.

Side event on LDC support measures during the Midterm Review Conference for the Istanbul Programme of Action (IPoA) for LDCs

Equatorial Guinea

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 increase the trade value in Uganda.

The second edition of the Handbook on the Least Developed Country Category: Inclusion, Graduation and Special Support Measures (2015) provides comprehensive information on the least developed country (LDC) category, including a description of procedures and methodologies used in the identification of these countries, and the support measures associated with it. It builds upon and updates the previous edition published in 2008. Accordingly, the LDC Handbook is intended for the use by government officials, policymakers, researchers and others interested in the particular development problems and challenges faced by the most disadvantaged developing countries.