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The Least Developed Countries Report 2000

Aid, Private Capital Flows and External Debt - The Challenge of Financing Development in the LDCs

image of The Least Developed Countries Report 2000

What the world's poorest countries need most is not simply debt relief, but a 'New Deal' in international development cooperation, contends UNCTAD in its Least Developed Countries 2000 Report. Almost two thirds of the 48 least developed countries (LDCs) have an external debt burden, which is unsustainable according to international criteria. The report also states that past efforts to substantially decrease their debt service payments have failed, and recent attempts to finally resolve the debt problem through the Heavily Indebt Poor Countries (HIPC) Initiative are not very promising. The LDCs also looks at economic growth and social trends in the LDCs in the 1990s, financing development, and ways in which new approaches to partnerships can increase the effectiveness of aid.

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Overview

In the early 1990s, there was a widespread expectation that the globalization of production systems and of finance, and the liberalization of economic activity, would promote diminishing income disparities between countries within the global economy. For the least developed countries, the prospect that the removal of legal and political obstacles to trade and capital movements would lead to accelerated growth and income convergence with more advanced countries was particularly inviting. During the 1990s there has been an accelerating process of economic liberalization in many least developed countries (LDCs). However, overall progress in increasing real incomes, reducing poverty and moving towards various international targets for human and social development has been disappointingly slow, except for a few of them.

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