27 November 2014: Least Developed Countries (LDCs) are the “battleground on which the post-2015 development agenda will be won or lost,” according to the LDC Report 2014, titled ‘Growth with Structural Transformation: A Post-2015 Development Agenda.’ The UN Conference on Trade and Development (UNCTAD) report examines how the “LDC paradox” contributed to the failure of most LDCs to meet the Millennium Development Goals (MDGs), and makes recommendations on achieving the post-2015 development agenda’s goals.

By the “LDC paradox,” many of the poorest countries experienced strong economic growth and human development progress but failed to achieve structural transformation. In addition, the report notes, the MDGs failed to promote a policy framework focused on transformative growth. To ensure that new development goals can be met, the report emphasizes that the international community must learn from this failure, structurally transform and diversify economies, and reverse economic and human development trends that trap the world’s poorest in cycles of poverty. The report stresses eradicating poverty will be challenging to achieve in LDCs.

The report discusses the interdependence between rural economic diversification and agricultural upgrading, noting that LDCs’ rural development depends on both diversifying economies away from agriculture and increasing agricultural productivity. The report also highlights the role of renewable energy in rural economic diversification.

Women are critical for diversifying rural economies in LDCs, according to the report, which says women often experience limited economic development opportunities as a result of traditional roles in unpaid care and household work. Within this context, the report proposes “Female Rural Entrepreneurship for Economic Diversification (FREED)” to support women’s enterprises in non-farm activities in rural areas of LDCs and upgrade existing women’s enterprises.

The report highlights three policy lessons from non-LDC countries that combined economic and human development through economic transformation. Lessons focus on: industrial policy to direct resources into sectors and activities that promote structural transformation; macroeconomic policies that support structural transformation; and resource mobilization to maximize development impact and generate public and private investment.

Greater ambition and concerted efforts by both rich and poor countries are needed to move towards an inclusive and sustainable future, according to the report. Such ambition must include: agreement on an effective and equitable global response to climate change; fulfillment of commitments on aid to LDCs and creation of development-friendly international financial and trading systems. The report also recommends, inter alia, addressing the loss of revenue through tax havens, tax competition and transfer mispricing.

UNCTAD launched the report around the world, including at the UN Economic and Social Commission for Asia and the Pacific (ESCAP) headquarters in Bangkok, Thailand. [UNCTAD Press Release] [UNCTAD Press Release on FREED] [ESCAP Press Release] [Report Website] [Publication: The Least Developed Countries Report 2014: Growth with Structural Transformation: A Post-2015 Development Agenda] [UN Press Release]