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UNCTAD case studies on Zambia, Benin, and Cambodia show global financial crisis is hurting LDCs
Plan for half world’s least developed countries to graduate by end of decade is hindered by downturn, report says

Geneva, Switzerland, (23 September 2012)

The world financial and economic crisis has reversed recent growth trends in the world’s poorest nations, dampening the prospects that half of the 48 least developed countries (LDCs) will be able to graduate from that status by the end of the decade, as called for by last year’s international conference on LDCs, UNCTAD research shows.

Case studies on Zambia, Benin and Cambodia show that “the recent economic and financial crisis severely weakened the abilities of many LDCs to maintain steady income and spending,” an UNCTAD expert told the organization’s Trade and Development Board at a meeting 21 September. The findings are contained in a report presented to the Board titled “Enabling the Graduation of LDCs: Enhancing the Role of Commodities and Improving Agricultural Productivity.”

The report is available online.

Teffere Tesfachew, Director of the organization’s Division on Africa, Least Developed Countries and Special Programmes, said that in Zambia, “it was estimated that the loss in mining production and reduced exports – which meant low royalty payments as well as temporary closure of some production activities – led the country to lose up to 22 per cent of its government revenue between 2009 and 2010.” He added that the largest copper mining company in Zambia reported a 40 per cent reduction in all supplier contracts. Between June 2008 and June 2009, the total job loss in Zambia’s mining sector amounted to 30.4 per cent of the total labour force engaged in mining.

In Cambodia, the case study found that “the share of households that did not have sufficient income for food and other essential expenses increased from 62 per cent to 69 per cent between June 2007 and June 2008. It was also estimated that 63,000 jobs were lost in the country’s garment sector during the same period, and that employment in the country’s construction sector sank by 30 per cent.”

In Benin, Mr. Tesfachew said at the meeting the case study had shown that the proportion of people living in absolute poverty increased from 33.4 per cent to 34.4 per cent between 2007 and 2009.

The Fourth United Nations Conference on the Least Developed Countries, held last year in Istanbul, resulted in a Programme of Action that sets a target of having at least half of LDCs on track to graduate from the category by 2020. It was acknowledged, even at the time, that the goal posed a stiff challenge for the countries and for international efforts to help them.

In the 40 years in which the LDC category has existed, only three countries have graduated – Botswana, Cape Verde and the Maldives.  One more – Samoa – is slated to exit in 2014. Meanwhile a new country – South Sudan – is expected soon to officially join the ranks of LDCs, raising the global total to 49.

The Programme of Action assigns a broad mandate to UNCTAD to carry out research and analysis, consensus building and technical cooperation work related to LDCs. UNCTAD’s principal objectives are to contribute to international consensus building on trade and development issues of interest to LDCs, to draw the attention of policymakers to the development challenges confronting these countries, and enable them to build their institutional and human resources capacities in the areas of trade, finance, investment, trade logistics and other areas.

For more information, please contact:
UNCTAD Communications and Information Unit
T: +41 22 917 5828
T: +41 79 502 43 11

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