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UN Department of Economic and Social Affairs (DESA) Policy Briefs

The United Nations Department of Economic and Social Affairs provides thought leadership through its UN DESA Policy Briefs series, presenting timely and relevant analysis and policy guidance on global economic and social issues.

English

COVID-19 Pandemic Deals a Huge Blow to the Manufacturing Exports From LDCs

The COVID-19 (coronavirus) pandemic poses a significant economic challenge to LDCs that rely heavily on exporting manufactured goods, particularly clothing and apparel, amid global demand and supply-side shocks. Clothing and apparel exports have been key drivers of formal employment, wage growth and poverty reduction in a few countries, with the share of working poor falling from about 45 per cent to 15 per cent of the workforce in these LDCs during the past two decades. A prolonged global slump will likely reverse the gains in poverty reduction and undermine structural transformation of these economies. While it is highly unlikely that these LDCs will face a debt crisis—given their low levels of external debt—the likelihood of a balance of payments crisis looms large. Additional liquidity and credit from multilateral sources will remain critical not only to avoid a balance of payments crisis but also to prevent increases in poverty and the reversal of years of development gains.

English

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