International support measures to enhance productive capacities and competitiveness in LDCs

The previous chapters discussed the magnitude of the complex development problems of LDCs stemming largely from their structural weaknesses, and proposed measures to address them at the national level. Nevertheless, because of the enormity of the problem, there is a general consensus that LDCs cannot by themselves address their structural weaknesses that have been the bane of their development. The problem is twofold. First, LDCs lack adequate levels of resources – financial, human and technological - necessary for their own development. Second, they have been frustrated in their efforts to export the few products in which they enjoy some comparative advantage, despite the existence of several preferential market-access schemes for their exports. This is partly due to their supply-side weaknesses, the persistence of tariff peaks and tariff escalation, and difficulties in understanding and utilizing various schemes under the Generalized System of Preferences (GSP). Intervention by the international community, therefore, needs to take the form of: a) providing LDCs with adequate resources for enhancing their productive capacities; and b) working out more realistic and enhanced market access schemes for LDC products. Resource levels can be raised not only through increasing inflows, but also by helping to reduce resource outflows, for example, through debt cancellation, or by reducing debt-servicing obligations, and other measures proposed below (section B). Through such measures, LDCs would be able to take full advantage of, and integrate positively into, the global trading system and finally be in a position to address effectively their endemic poverty.

Related Subject(s): Economic and Social Development
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