A united call from UNCTAD's quadrennial conference for fairer trade, financing and investment frameworks in support of economies that are structurally weak and vulnerable.
© Shutterstock/AP Tolang | A farmer harvesting traditional way paddy in Kathmandu, Nepal.
At the 16th United Nations Conference on Trade and Development (UNCTAD16), world leaders step up advocacy for the world’s most vulnerable economies – least developed countries (LDCs), small island developing states (SIDS) and landlocked developing countries (LLDCs).
Across various ministerial-level roundtables, participants echoed UNCTAD's longstanding call for stronger international action to confront rising tariffs, tightening finance, climate shocks and structural constraints to safeguard prosperity for all.
Least developed countries: Tackling steep tariffs and shrinking fiscal space
LDCs are facing a perfect storm. The average tariff on their exports to major markets has tripled to 27%, bilateral aid has fallen, and in some countries' debt service absorbs more than 10% of government revenue.
“The road ahead just became steeper,” UNCTAD Secretary-General Rebeca Grynspan said, “We need relief, reform and resilience.”
Relief means protecting vulnerable economies from tariff shocks and financial tightening. Reform involves stronger representation in the international financial system. Resilience requires investing in productive capacities, diversifying economies and ensuring sustainable graduation from LDC status.
Small island developing states: Addressing rising costs and financing gaps
For SIDS, geographic remoteness, high trade costs and climate vulnerability remain persistent obstacles. Natural disasters have doubled over the past 20 years, but these economies receive only 0.2% of global climate finance, and external debt continues to rise.
“Small island developing states face challenges that are both unique and urgent,” Ms. Grynspan said, “Innovative financial instruments must be deployed, not just promised.”
She identified three key priorities: Reducing transport costs, accelerating digital transformation to overcome isolation and building ocean-based industries for diversification. SIDS ministers also highlighted the disproportionate climate impacts they face despite contributing less than 1% of global greenhouse gas emissions.
Landlocked developing countries: Overcoming geographic barriers
For LLDCs, high transport and logistics costs limit their ability to trade and compete. Shipping costs are almost double those of transit countries. Despite this, Ministers as well as the heads of UNCTAD, the International Trade Centre, the Economic Commission for Europe and the UN High Representative for the Least Developed Countries, Landlocked Developing Countries and Small Island Developing States (OHRLLS) insisted that distance is not the real problem and that policy can address costs and efficiency.
“Let us ensure that geography doesn’t define destiny,” said UN Under-Secretary-General Rabab Fatima of OHRLLS.
UNCTAD has called for stronger trade facilitation, investments in digital economy sectors to bypass physical constraints, and increased Aid for Trade, noting that LLDCs currently receive just 14% of such funding.
A shared agenda for action
Though their contexts differ, the three groups face common vulnerabilities. All called for a fairer and more predictable international trade and finance system, greater investment in productive sectors and support aligned to their specific development needs.
The outcomes of these ministerial meetings will feed into the UNCTAD16 outcome document, with resilience and structural transformation placed at the heart of global development priorities.
“These aren’t just promises – they’re mandates,” Ms Grynspan said, “UNCTAD will deliver through research, consensus-building and technical cooperation, so no economy is left behind.”
What is the link between UNCTAD and the world's most vulnerable economies?
UNCTAD was instrumental in the establishment of the least developed countries category by the UN General Assembly in 1971. These countries suffer from a specific set of vulnerabilities including very low per capita incomes and restricted life chances, as well as structural challenges such as weak or non-existent infrastructure. Moreover, these countries are more exposed to natural disasters and conflict as well as the impacts of climate change and are the least able to respond.
Since, the category of small island developing states was introduced in 1992 in recognition of their unique disadvantages stemming from remoteness, poor connectivity, dependence on imports and the costs of transport, as well as their exposure to weather and climate events.
UNCTAD works closely with LDCs, LLDCs and SIDS to build resilience and support their integration into the global economy.