What are productive capacities? How do they develop? Why do they matter?

In most LDCs absolute poverty is all-pervasive. The majority of the population is living at or below income levels which are barely sufficient to meet their basic needs. UNCTAD estimates suggest that at the end of the 1990s about 50 per cent of the population living in the LDCs were living on less than a dollar a day, and that if the trends of the 1990s persist, the number of people living on less than a dollar a day in those countries can be expected to increase from 334 million in 2000 to 471 million in 2010 (UNCTAD, 2004). In theory, it would be possible to go a long way to eradicating this extreme poverty by redirecting present international aid to the LDCs into direct cash transfers provided to the population living on less than a dollar a day. But such international welfarism, even if it were feasible, is not a sustainable solution. People need to be able to make their own way in the world through their work and creativity, and to define their horizon of individual freedom through their own activity. For this to occur, productive employment opportunities must expand in the LDCs.

Sustainable Development Goals:

Affordable and Clean Energy

Industry, Innovation and Infrastructure

Peace, Justice and Strong Institutions