The planet's poorest nations like Ethiopia, Malawi and Angola have failed to cash in on strong economic growth due to a lack of structural reforms and left them wallowing in poverty, the UN warned today.
In its annual report on the world's least developed countries, or LDCs, the UN Conference on Trade and Development said that booming economic growth in the 48 nations on its list was having only minor impacts on living standards and the fight against widespread poverty.
"The LDC paradox arises from the failure of LDC economies to achieve structural changes despite having grown vigorously as a result of strong export prices and rising aid flows", UNCTAD said.
The 48 countries, most of them in sub-Saharan Africa, had jointly seen their economies grow 5.6 per cent in 2013, far above the 1.2-per cent growth seen in developed countries.
Yet nearly half of the population in LDCs continue to live in extreme poverty, almost 30 per cent of people are undernourished and few are in secure employment, the UNCTAD report said.
Nearly one third of people in these countries have no access to a clean water source and almost two thirds have no access to sanitation facilities, it said, also pointing out that one in 12 children there die before they turn five.
One problem, the report said, was that many LDCs, especially the ones in Africa, are not investing enough in areas that generate secure employment, like manufacturing, technology and modernising the agriculture sector.
In fact, the value produced annually by the average worker in the LDCs corresponds to just two per cent of the value generated by their equivalent in developed countries, the report found.
All LDCs are not equal though. Asian LDCs like Bangladesh and Cambodia, whose economies are dominated by manufacturing, had seen labour productivity swell 3.2 per cent annually since the early 1990s, the report found.
That is double the pace of African LDCs, whose economies are more dominated by oil, gas and metal mining, it said.
Of the 48 countries on the LDC list, only one, Laos, appeared to be on track to achieve all seven Millennium Development Goals, which among other things called for halving poverty and extreme hunger by 2015.
On average, the LDCs had reduced the number of people living on less than USD 1.25 a day from 65 per cent of their populations in 1990 to 45 per cent in 2010.
