Business Standard

Ajay Chhibber: The plight of the least developed countries

Despite significant gains on the economic and social fronts, 50% of the people in the least developed countries live on less than $1.25 a day

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More than 40 heads of state of the world’s least developed countries recently met in to define a new vision to reverse the profound poverty of the people living in these countries. While around two-thirds of these 48 countries are in Africa, 14 are in Asia.

After a period of prolonged slow growth, economic growth in the least developed countries accelerated to about 7 per cent per annum on average over the period 2000-2007. And many of these countries have made notable progress on the (MDGs). In Bhutan and Rwanda, maternal mortality reduced by more than half within the decade. In Bangladesh, Madagascar, Nepal and Timor Leste child mortality reduced by more than 60 per cent between 1990 and 2007.

Despite significant gains on the economic and social fronts, 50 per cent of the people in the least developed countries live on less than $1.25 a day.

These countries are particularly vulnerable to external shocks — both natural disasters and man-made crises. And they lack the internal resilience to bounce back owing to the structural weaknesses in their economies.

The global recession hit such countries hard, and GDP per capita declined in many of them. The resurgence in global food prices now threatens to undermine human development achievements, hitting the most vulnerable the hardest. A recent study by the finds that a 10 per cent rise in domestic food prices in developing Asia could push an additional 64 million people into extreme poverty based on the $1.25 a day poverty line.

The effects of climate change and of other non-climate-related disasters add to these challenges. The recent earthquake and tsunami in Japan, floods in Pakistan in June 2010, Cyclone Nargis in Myanmar in 2008, Cyclone Sidr in in November 2007, and the Indian Ocean tsunami in December 2004 are some recent examples of disasters in Asia. In the last decade, the Asia-Pacific region accounted for about three-fourths of global casualties from natural disasters. Climate vulnerability is particularly grave in this region.

Increasing poverty, enlarging income inequality, and deteriorating health, nutrition and education outcomes reflect the human cost of these crises, especially for the poorest and the most vulnerable in developing countries. The longer-term impact of climate change aggravates these short-term vulnerabilities: rising sea levels are threatening the very existence of some small island states and the melting of glaciers poses serious challenges. The question is: how can their resilience be strengthened? It will require a range of policy measures that promote inclusive growth and reduce climate vulnerability.

So far, growth in many least developed countries is driven by capital-intensive extractive sectors, and has limited impact on employment creation. Furthermore, agriculture, in which the majority of the population is employed, has been growing slowly. In addition, high levels of income inequality limit the impact of growth on poverty reduction.

Economic growth has been a prime catalyst towards eradicating poverty, reducing hunger and creating productive employment. But though national average incomes have risen in the least developed countries, they are still struggling to ensure that the benefits reach the poorest segments of the population, usually in rural areas.

The United Nations Development Programme’s international assessment report for achieving the MDGs found that some countries have been able to narrow the gap between high- and low-income segments. In Ethiopia, for example, income disparity is low mainly because of its agriculture-led development model. This focus is on modernising its subsistence level and inefficient agricultural system by adopting an integrated effort that includes improved vocational training for farmers, better land management and more secure rights, and market-based initiatives.

To be able to make sustained development progress, rising climate vulnerabilities need to be addressed for many least developed countries. Although these countries as a group contribute relatively little to global warming (accounting for under 1 per cent of the world’s total greenhouse gas emissions), their economic weaknesses, geographical locations, and high dependence on local natural resources for food and other basics render them particularly vulnerable to climate change.

Recovering from disasters can take years, and is a big drain on already scarce resources. A wide range of approaches is required to address climate vulnerabilities.

It is critical to invest in early warning, disaster risk reduction and preparedness. For example, the death toll in the 2007 Cyclone Sidr in Bangladesh is a fraction of the equally strong cyclone that Bangladesh witnessed in 1991, in part due to better preparedness.

Thus, a win-win approach is one that successfully builds on the synergies between the fight against poverty and climate change to promote climate-resilient development.

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