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The world’s poorest
countries are trapped in boom-bust cycles and their medium-term
prospects are a cause for concern, the United Nations Conference on
Trade and Development (UNCTAD) said in a report issued on Thursday in
Addis Ababa.

The 49 states,
categorised as Least Developed Countries (LDCs), weathered the global
downturn better than expected, but they now need a new systematic
international approach to development, rather than ad hoc emergency
measures, to reduce their economies’ reliance on raw materials, UNCTAD
said.

“They have not been
able to benefit from any global trends to wean themselves away from
increasing dependence on commodities,” UNCTAD secretary general,
Supachai Panitchpakdi, told a briefing.

The 258 report,
which was titled ‘Towards a New International Development Architecture
for LDCs,’ said though these countries were coping with recession, they
remain stuck in ‘boom-and-boost cycle’, which have long plagued their
economies, and that their medium-term prospects posed a cause for
concern.

The report said the
49 poorest countries need better-designed financing – rising from an
estimated $4 billion to $17 billion per annum by 2030 – to cope with the
difficulties posed by climate change.

“They will have
difficulty escaping poverty and ending the chronic vulnerabilities, and
even boom periods have done little to improve living standards in those
countries,” it stated.

Optimistic on growth

It said that
aggregate growth indicators showed that average GDP growth in LDCs was
4.3 percent in 2009, higher than in other developed countries.

It also stated that
donors appear reluctant to scale up their external assistance, but that
the new multilateral lending may have partly cushioned the downturn, but
it certainly contributed to the build-up of external debt.

“While debt owed to
official creditors remains far below its level of year 2000, in the
median African LDCs it increased by 1.5 percent of GDP,” the report
stated.

“By April 2010, a
total of 10 LDCs were in a situation of debt distress and another 10
were at high risk of debt distress,” it said.

The report, which was jointly presented by Jean-Noel Francois of the
Trade and Investment Department of the AU Commission, and Maryam
Dessables of the UN Economic Commission for Africa, said in spite of the
challenges, most of the LDCs would achieve the MDGs by 2015.