Increased productivity could spur rebound of world's poorest countries - UN

The United Nations Conference on Trade and Development's 2020 report on Least Developed Countries highlights the urgent need for increased productivity to spur the rebound of the world's poorest nations post-pandemic. Efforts to rebuild these economies are at risk of falling short unless their productive capacities are significantly enhanced, as discussed by Rolf Traeger, Chief of the LDC Section at UNCTAD, in an interview with CNBC Africa. The report reveals that the Least Developed Countries (LDCs) have been disproportionately affected by the economic ramifications of the COVID-19 pandemic. While the health impact may not be as severe as in other regions, the economic consequences have been profound. The LDCs are projected to experience their worst economic performance in three decades, exacerbating poverty levels. Approximately 32 million more people are expected to fall into poverty, leading to over one-third of the LDC populations living in extreme poverty. This alarming trend not only hampers economic growth but also poses setbacks in nutrition, health, and education, making it increasingly challenging for these nations to achieve sustainable development goals by 2030. To combat these adversities, it is imperative for LDCs and their development partners to prioritize investments in developing productive capacities and transforming their economic structures towards more contemporary and efficient sectors. These sectors should encompass higher productivity levels, advanced knowledge content, and increased earning potential for workers. Traeger emphasizes that without such transformations, the poorest nations will struggle to reverse the adverse impacts of the pandemic and make progress towards sustainable development. Technology emerges as a crucial tool in this transformative process. Traeger underscores the significance of harnessing modern technologies to combat immediate challenges posed by the pandemic and foster long-term growth. Several LDCs have already started employing drones for medical deliveries and utilizing industrial technologies to manufacture essential supplies like masks and PPEs. However, the key lies in integrating technologies across all sectors of production, especially in agriculture, which employs two-thirds of the LDC workforce. By enhancing labor productivity through technology adoption and industrialization, nations can uplift workers from poverty and enhance living conditions. Traeger emphasizes the need for modernizing industries, integrating digital technologies, and promoting sectors like telecommunications and financial services in these nations. In addition to technological advancements, Traeger underscores the importance of short and long-term policy measures to support economic recovery in LDCs. Immediate actions include health policies to combat the pandemic's effects, stimulating economic activity, safeguarding incomes, and preserving small and medium-sized enterprises that are vital for employment generation in LDCs. Long-term policies should focus on fostering technological innovation, supporting income sustainability, and enhancing economic resilience in the face of future crises. In conclusion, the UN report underscores the critical role of productivity growth and technology utilization in driving the economic resurgence of the world's poorest nations post-pandemic. By implementing strategic policies, investing in productive capacities, and embracing technological advancements, LDCs can pave the way for sustainable development and improved livelihoods for their citizens.