News / Economy

UN: Reconsider Economic Approach for Least Developed Countries

FILE - A homeless child repairs a shoe along a street in the in capital Kinshasa, in the Democratic Republic of Congo, June 2013.
FILE - A homeless child repairs a shoe along a street in the in capital Kinshasa, in the Democratic Republic of Congo, June 2013.
Marthe van der Wolf
A new United Nations report says the world’s poorest countries should reconsider their economic policies, because they are not creating jobs for the masses.

The United Nations Conference on Trade and Development is warning that current economic policies will not significantly reduce poverty, because no jobs are created for the masses.

The UNCTAD 2013 Least Developed Countries report released Wednesday predicts social unrest and international mass emigration will be the consequences if the employment situation in these countries is not improved.
 
Taffere Tesfachew of UNCTAD said a new economic approach is needed. “We are not questioning growth and growth matters very much, it is absolutely critical. Nobody is changing their views on the need for growth. But it think the question is - perhaps there is a way to grow and create employment, and there is a way you grow you do not create employment. The policies followed by many least developed countries and those especially that did not create employment while there is a need to create employment.”

Development partners like the World Bank and International Monetary Fund have mainly advocated macro-economic stability and liberalization policies for poor and undeveloped countries. But this approach has failed to generate many jobs, even during the economic boom from 2002 to 2008, when many least developed countries experienced an average annual growth of eight percent or higher.
 
According to the United Nations there are 49 "least developed countries." Thirty-four are African, along with nine in Asia, five in the Pacific and one in the Caribbean.

Almost all of these countries face rising numbers of new entrants to the labor market, with the youth population looking for jobs expected to rise to 300 million by 2050.

Taffere said countries should invest in labor-intensive industries such as manufacturing to create jobs for the millions of unemployed. “We really believe that infrastructural transformation, countries that are moving, jumping from agriculture to services, bypassing manufacturing, I think they will have a problem.  The manufacturing sector, the industrial sector, particularly manufacturing, is I think critical for countries with large population, for countries with large demand.”

A country is considered an LDC when the per capita income is below $992 on a three-year average, by the economic vulnerability of a nation, and by its score on the Human Assets Index that looks at factors such as health, nutrition, school enrollment and literacy rates.

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