Expanding Productive Capacity

Lessons Learned from Graduating Least Developed Countries

image of Expanding Productive Capacity

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.



Learning from the experiences of graduated and graduating least developed countries and non-LDC developing economies

The first pathway refers to the two countries, Angola and Equatorial Guinea, that have met the income-only criteria for graduation through rapid growth of their GNI per capita income, driven largely by exploitation of natural resources. Both countries have not yet reached the human asset and economic vulnerability thresholds. The key message and the most important lesson emerging from the development experiences of these countries is that failure to use policies in a transparent and strategic manner and through accountable governance systems leaves countries with an economic structure which scores high in GNI per capita income, but low in social development and economic diversification, despite generating sufficient resources to expand their productive capacity without needing special international support measures. Their experience demonstrates that it is possible to meet the graduation threshold without necessarily expanding productive capacity or undergoing meaningful social and economic transformation.


This is a required field
Please enter a valid email address
Approval was a Success
Invalid data
An Error Occurred
Approval was partially successful, following selected items could not be processed due to error