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Least Developed Countries Stagnate Under Ailing Strategies

Kanya D'Almeida

UNITED NATIONS, Mar 30 2011 (IPS) - A report released Tuesday by the International Labour Organization (ILO) for the Fourth Conference on the Least Developed Countries (LDCs) slated to take place in Istanbul, Turkey in early May expressed a strong critique of the snail’s pace of development, but stopped just short of calling for radical new policies to be implemented.

The report, entitled “Growth, Employment and Decent Work in the Least Developed Countries”, solidified widespread fears that the “graduation” rate of LDCs was abysmally low, with only three countries out of 51 – the Maldives, Botswana and Cape Verde – moving out of the category since it was created by the United Nations in 1970.

Addressing a panel at the U.N. headquarters Tuesday, Jose Manual Salazar-Xirinachs, the executive director of the employment sector of the ILO, said that even the minor recorded growth was falling far short of acceptable economic and social returns, making the realisation of the Millennium Development Goals (MDGs) in the world’s poorest 48 countries an unlikely possibility.

“Productive capacity in agriculture and manufacturing remain limited, exports are too concentrated, employment grew at a mere 2.9 percent from 2000-2009 and the majority of workers in [LCDs] remain trapped in vulnerable forms of employment that cannot lift them from the poverty line,” Salazar- Xirinachs said.

He added that the ILO hoped to contribute solutions to these imbalances through a two-fold policy aimed at “accelerating sustainable growth while simultaneously improving the quality of growth” in a more a diversified production structure and a more socially-inclusive and job-rich pattern.

However, he did not elaborate as to how these slightly modified policies, which nevertheless constituted a “business-as-usual” approach, would suffice to address the devastating levels of poverty, economic degradation and mounting income inequalities in countries still suffering from the debilitating impacts of centuries of colonialism and decades of neoliberal development agendas.

“Business as usual is not sufficient,” Sir Richard Jolly, an honourary professor at the Institute of Development Studies at the University of Sussex and a member of the U.N. secretary-general’s newly-appointed Group of Eminent Persons (GEP) on LDCs, told IPS.

“Trade reforms in agriculture are urgent and essential, especially because a high proportion of the poor in LDCs are dependent directly or indirectly on agricultural production…Strengthening agricultural production in these countries often means improving local markets and limiting cheap exports from COP 8 countries where agricultural production is subsidised,” he added.

A report released ahead of the summit in Istanbul by the GEP made clear that “increasing marginalisation of the LDCs is creating a future that we, as a global community, cannot afford.”

“Of course, economic growth alone is not the only test of progress. There is need for human development, which is sustainable, attention to the priority issues of poverty reduction, MDG achievement and attention to environmental sustainability for the medium and longer run,” Jolly told IPS.

While this rhetoric is hopeful, and possibly even inspiring to some, many experts believe that it is quickly becoming obsolete.

Kouglo Lawson Body, the director of economic policy for the International Trade Union Confederation-Africa, stressed that his organisation, which represents 16 million workers from 48 African countries, was less focused on finding solutions to community-level problems than it was in understanding and analysing global trends that lead to local challenges.

“We need real reform in global governance to free the LDCs from the dominion of international institutions and even from some of the emerging developed countries,” Body said.

“Giants like the International Monetary Fund and the World Bank are too concerned with influencing the decisions and strategies of LDCs, particularly in Africa – this is a trend that needs to change on systemic level,” he added.

Omar Dahi, a professor of Economics at Hampshire College, echoed Body’s words and stressed the need for more autonomy for former colonies.

“It’s possible for a country like Angola to achieve over 10,000 to 15,000 dollars per capita GDP in the next few years, but that means very little for the majority of the population,” Dahi told IPS.

“Additionally, recent events in the Arab world indicate that, regardless of development, people will rebel against authoritarian rule even if they are experiencing decent economic growth, such as in Tunisia. This should make everyone question the so-called ‘Chinese model’, which has become popular in the last decade,” he said.

“Neoliberal globalisation, with the trinity of liberalisation, deregulation, and privatisation, has not delivered,” he added. “Instead, it has exposed the most vulnerable populations to the vagaries of the international market and rising commodity prices, while making LDCs more and more desperate for attracting foreign investment.”

Dahi insisted that LDCs needed to be freed from the constraints of structural adjustment policies, which work greatly to their disadvantage.

“Writing off LDCs’ debt (rather than debt relief) is a first step to reversing this legacy, since there are estimates that the poorest countries pay 90 million dollars daily in debt payments. Recovering an appropriate role for the state in those countries is another step. Once policy space and some autonomy are recovered, grassroots organisations can thrive,” he concluded.