Change in the Number of Least Developed Countries

The number of countries now classed as Least Developed Countries has risen to 50, with 23 of the 24 original members still in the same category (the exception is Botswana). Over the last 34 years the number of LDCs has more than doubled; the number rose from 41 in 1990 to 48 in 1995, a substantial increase. Thirty-four of the 50 LDCs are in Africa, 15 are in Asia and the Pacific, and one is in the Latin American and Caribbean region. Sixteen of the 50 LDCs are landlocked; this and other geographical aspects of most LDCs result in high transport costs, which have a significant adverse impact on their overall economic development. Island LDCs face particular problems resulting from their small size, insularity and remoteness from the major economic centers.

The supply side weaknesses faced by the LDCs impede their ability to compete effectively in world markets. These weaknesses span from both public and private sectors. They include, inter alia, poorly developed managerial and technical capacities in the private sector, weaknesses in public administration and deficiencies in physical infrastructure. Technological advances have aided the globalization process in transport and communications, and there has been a rapid liberalization and deregulation of trade and capital flows at the international levels. Countries, like LDCs, with initial conditions that make them less suited to take advantage of the opportunities presented by globalization are at risk of becoming further marginalized.

Traditional distinctions between the economic, social and political spheres between efficiency and equity, and between the national and international are increasingly inadequate to grasp the nature and scale of contemporary development. Knowledge, skills, information, values, communication and exchange lie at the heart of these developments and the challenges they represent. As the pace of technological change accelerates and international competition intensifies, uncertainty increases for policy-makers and producers alike. The changes, in turn, are fundamentally altering development requirements, adding the need for continuous

adjustment to the traditional elements of sustained growth and structural change. To cope with this new reality, pressures are mounting to orient development processes everywhere towards the creation of more flexible production systems built upon a strong technological base. 1

Over the past few years, many LDCs have undertaken wide-ranging reform policies and measures to improve their economic situation. As they moved along the reform path, the reform objectives became more complex and ambitious, shifting from the limited concerns of correcting macroeconomic imbalances and stabilization to promoting development by a plethora of market-oriented reforms, including improving economic efficiency, curbing public-sector intervention, encouraging the private sector and liberalizing the external trade sector. The reform process also requires adjusting to the process of the new economy which is a knowledge economy based on the application of human know-how to everything we produce and how we produce it. In the new economy, more and more of the economy’s added value will be created by brain. Many agricultural and industrial jobs are becoming knowledge work. For LDCs to break away from their marginalization and participate more actively in global economic processes, it is imperative that they should be supported in widening and deepening the national infrastructure of their intellectual property and the external orientation of their economies as knowledge, skills, information values, communication and exchange lie at the heart of contemporary development. Without support, LDCs will become further marginalized as the process of globalization gains further momentum.

Change in the number of Least Developed Countries from 1971 to 2005

Year

Total

Africa

Asia

Pacific Islands

Latin America and the Caribbean

1971

24

16

6

1

1

1975

27

18

7

1

1

1977

29

20

7

1

1

1982

34

25

7

1

1

1985

35

25

7

2

1

1986

38

26

7

4

1

1987

39

26

8

4

1

1988

40

27

8

4

1

1990

41

28

8

4

1

1991

46

31

9

5

1

1994

48

33

9

5

1

2001

49

34

9

5

1

2005

50

34

9

6

1

1 As stated by Don Tapscott in his book ‘The Digital Economy, Promise and Parole in the age of networked intelligence’, pp 7-8, McGraw-Hill, 1996: “The factory of today is as different from the industrial factory of the old economy as the old factory from the craft production that preceded it. Farms are operated with agricultural equipment brimming with chips. Cargo is shipped in containers loaded by giant computer-controlled cranes or in jumbo jets loaded with software. Products themselves have knowledge content. There are smart clothes with chips in the collar; smart vehicles brimming with microprocessors that do a hundred new things every year; smart maps that tell a trucker’s location and automatically change tire pressure according to the weather and road conditions; smart radios that store the traffic report for when you want it; smart houses that manage energy, protect you from intrusion, and run a bath for you before you arrive. These are only a few examples. Adding ideas to products and turning new ideas into new products is what the future is all about. Whether people act as consumers or producers, adding ideas will be central to wealth creation.” Hence the increasing importance of Intellectual Property.

Least Developed Countries