The least developed countries report 2010: towards a new international development architecture for LDCs

This report reviews the economic situations of least developed countries (LDCs) under the recent global financial crisis, trying to draw the contours for new international development architecture (NIDA) for LDCs.

The report notes that the growth slowdown for the LDCs group in the wake of the financial crisis was slightly less severe than for other developing countries as a group, but it also implies a weaker recovery in 2010. Indeed, LDCs were adversely affected through the collapse of international trade and the sharp decline in foreign direct investment (FDI) inflows.

The authors warn that the medium-term outlook for LDCs is loaded with challenges as the fallout from the financial crisis could adversely affect future official development assistance flows and debt sustainability. On the other hand, they indicate that the current approach to international support for LDCs focuses mainly on international trade, whereas the report identifies five major pillars for the proposed NIDA. These include finance, trade, technology, commodities and climate change adaptation and mitigation.

 
Correspondingly, the document sets out principles which should inform the design of the NIDA: 

• promoting new development paths
• facilitating strategic integration into the global economy and reducing aid dependence
• increasing the developmental role of the state and fostering country ownership
• promoting policy coherence between the different pillars of the NIDA, and between systemic reforms and LDC-specific improved international support mechanisms
• supporting south-south cooperation as a complement to north-south cooperation
• giving greater voice and representation to LDCs in the global system of governance
  

The paper underscores that NIDA should take into consideration:

• promoting LDCs domestic financial resource mobilisation
• empowering LDCs to use flexibilities provided under WTO rules
• enhancing the sustainability of climate-change-related financing
• the need for compensatory financing for shocks
• how TRIPS agreement can work for LDCs