Expanding Productive Capacity

Lessons Learned from Graduating Least Developed Countries

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Over the past decades, least developed countries (LDCs) have made only limited progress in dynamically transforming and diversifying their economies. Their structural challenges and weak economic and social performance are rooted in the limited development of their productive capacity. Building productive capacities helps move LDC towards graduation from the category and provides development momentum necessary to manage graduation and beyond. Graduation is not only a policy objective for many countries and the international community but, more importantly, it is a reflection that a country has been able to overcome or mitigate the most severe structural impediments to sustainable development. This is part of the Committee for Development Policy (CDP) Policy Note series. The CDP analyses how intergovernmental cooperation could be strengthened to better manage the increasing interdependence among countries, reduce inequalities among and within countries and contribute to the post-2015 sustainable development agenda.




Lack of productive resources, entrepreneurial and institutional capabilities and production linkages, referred to collectively as lack of productive capacities, impedes the efforts of least developed countries (LDCs) to graduate from the LDC category and, more broadly, is a barrier to achieving the Sustainable Development Goals (SDGs). Consequently, the issue of building productive capacity has moved to the forefront of the international discourse. It is the first priority area in the Istanbul Programme of Action for the Least Developed Countries 2011–2020 and is also strongly reflected in the 2030 Agenda for Sustainable Development , in particular SDGs 8 and 9.


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