The least developed countries (LDCs) area group of 50 countries that have been identified as "least developed" interms of their low GDP per capita, their weak human assets and their high degree of economic vulnerability. UNCTAD has argued in past LDC Reports that the key to sustained economic growth and substantial poverty reduction in the LDCs is the development of their productive capacities and the associated creation of productive employment. They also extends the argument by focusing on knowledge accumulation, technological seaming and innovation as basic processes through which productive capacities develop.

Knowledge is becoming more and more important in global production and competition, and there is a danger that LDCs will be increasingly marginalized if they do not increase the knowledge content of their economies and diversify them through learning and innovation. The current patterns of technology flows to LDCs through international trade, FDI and licensing are not contributing to narrowing the global knowledge divide. Sustained economic growth and substantial poverty reduction cannot occur in the present context of liberalization without learning, and of global integration without innovation. It focuses on four key policy issues: • How science, technology and innovation policies geared towards technological catchup can be integrated into the developmentand poverty reduction strategies of the LDCs; • • • How stringent intellectual property rights regimes affect technological development processes in LDCs, and policy options for improving the tatter's learning environment; How the loss of skilled human resources through emigration can be addressed; How knowledge aid (as part of official development assistance) can be used by LDCs and their development partners to support learning and innovation in the LDCs.

Definition of LDCs
Least developed countries can be distinguished from developing countries, "less developed countries", "lesser developed countries", or other terms for countries in the so-called "Third World". Although many contemporary scholars argue that "Third World" is outdated, irrelevant or inaccurate, others may use the term "Fourth World" in reference to least
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developed countries. However, in order to avoid confusion between "least developed country" and "less developed country", which may both be abbreviated as LDC, and to avoid confusion with landlocked developing country, which can be abbreviated as LLDC, "developing country" is generally used in preference to "less developed country". Characteristics Least developed countries generally suffer conditions of extreme poverty, ongoing and widespread conflict (including civil war or ethnic clashes), extensive political corruption, and lack political and social stability. The form of government in such countries is often authoritarian in nature, and may comprise a dictatorship, warlordism, or a kleptocracy. The majority of LDCs are in Sub-Saharan Africa. During the last United Nations review in 2006, the UN defined LDCs as countries meeting three criteria, one of which was a three-year average estimate of gross national income (GNI) per capita of less than US $750. Countries with populations over 75 million are excluded. Trade and LDCs Issues surrounding global trade regulations and LDCs have gained a lot of media and policy attention thanks to the recently collapsed Doha Round of WTO negotiations being termed a development round. During the WTO's Hong Kong Ministerial, it was agreed that LDCs could see 100 percent duty-free, quota-free access to U.S. markets if the round were completed. But analysis of the deal by NGOs found that the text of the proposed LDC deal had substantial loopholes that might make the offer less than the full 100 percent access, and could even erase some current duty-free access of LDCs to rich country markets. Dissatisfaction with these loopholes led some economists to call for a reworking of the Hong Kong deal.

What are the Least Developed Countries?
Least Developed Countries (LDCs or Fourth World countries) are countries which according to the United Nations exhibit the lowest indicators of socioeconomic development, with the lowest Human Development Index ratings of all countries in the world. Fifty

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countries are currently designated by the United Nations as “least developed countries”. The list of LDCs is reviewed every three years by the Economic and Social Council (ECOSOC) in the light of recommendations by the Committee for Development Policy (CDP).

The following criteria were used by the CDP in the 2006 review of the list of LDCs: (a) A “low-income” criterion, based on the gross national income (GNI) per capita (a 3-year average, 2002– 2004), with thresholds of $750 for cases of addition to the list, and $900 for cases of graduation from LDC status; (b) A “human assets” criterion, involving a composite index (the Human Assets Index) based on indicators of (i) nutrition (percentage of the population undernourished); (ii) health (child mortality rate); (iii) school enrolment (gross secondary school enrolment rate); and (iv) literacy (adult literacy rate); and (c) An “economic vulnerability” criterion, involving a composite index (the Economic Vulnerability Index) based on indicators of (i) natural shocks (index of instability of agricultural production; share of population displaced by natural disasters); (ii) trade shocks (index of instability of exports of goods and services; (iii) exposure to shocks (share of agriculture, forestry and fisheries in GDP; merchandise export concentration index); (iv) economic smallness (population in logarithm); and (v) economic remoteness (index of remote-ness). For all three criteria, different thresholds are used for addition to, and graduation from, the list
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of LDCs. A country will qualify to be added to the list if it meets the three criteria and does not have a population greater than 75 mil-lion. A country will qualify for graduation from LDC status if it has met graduation thresholds under at least two of the three criteria in at least two consecutive reviews of the list. After a recommendation to graduate a country has been made by the CDP and endorsed by ECOSOC and the General Assembly, the graduating country will be granted a three-year grace period before actual graduation takes place. In accordance with General Assembly reso-lution 59/209, this standard grace period is expected to enable the relevant country and its development partners to agree on a “smooth transition” strategy, so that the loss of LDC-specific concessions at the end of the grace period does not disturb the socioeconomic progress of the country.

Current LDCs
Africa (35 Countries)
• • • • • • • • • • • • • • • • • • • •

Angola Benin Burkina Faso Burundi Cape Verde Central African Republic Chad Comoros Democratic Republic of the Congo Djibouti Equatorial Guinea Eritrea Ethiopia Gambia Guinea Guinea-Bissau Lesotho Liberia Madagascar Malawi
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• • • • • • • • • • • • • • •

Mali Mauritania Mozambique Niger Rwanda Sao Tome and Principe Senegal Sierra Leone Somalia Sudan Swaziland Tanzania Togo Uganda Zambia

Asia (10 Countries)
• • • • •

Afghanistan Bangladesh Bhutan Cambodia [[Image:{{{flag alias-Lao People’s Democratic Republic}}}|22x20px|border|Flag of Laos]] Laos

• • • • •

Maldives Myanmar Nepal Timor-Leste Yemen

Oceania (5 Countries)
• • • • •

Kiribati Samoa Solomon Islands Tuvalu Vanuatu

America (1 Country)
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Programmers of Action for the Least Developed Countries
In the late 1960s, the United Nations began paying special attention to the LDCs recognizing those countries as the most vulnerable of the international community. The International Development Strategy for the second United Nations Development Decade for the 1970s incorporated special measures in favour of the least developed countries. In order to generate international attention and action to reverse the continuing deterioration of the socioeconomic condition of these most vulnerable countries, the First United Nations Conference on the LDCs was held in Paris in 1981, which adopted a comprehensive Substantial New Programme of Action (SNPA) for the 1980s for the LDCs. The SNPA was subsequently endorsed by the UN General Assembly in its resolution 36/194 of 17 December 1981. To continue focus on the need for special measures for these countries, the Second United Nations Conference on the Least Developed Countries (LDC II) was held in 1990 also in Paris, adopting the Paris declaration and the Programme of Action for the LDCs for the 1990s. The Third United Nations Conference on the Least Developed Countries (LDC III) was held in Brussels hosted by the European Union from 14 to 20 May 2001.

The Brussels Declaration and the Programme of Action for the Least Developed Countries for the Decade 2001-2010, adopted by the Third United Nations Conference on the Least Developed Countries in Brussels on 20 May 2001, were endorsed by the General Assembly in its resolution 55/279 of 12 July 2001.

Framework for partnership: The Programme of Action for the Least Developed Countries (LDCs) for the Decade 2001-2010 adopted on 20 May 2001 in Brussels aims at improving human conditions of the population of the LDCs and provides a framework for partnership between LDCs and their development partners "to accelerate sustained economic growth and sustainable development in LDCs, to end marginalization by eradicating poverty, inequality and deprivation in these countries, and to enable them to integrate beneficially into the global economy". Goals and targets: The overarching goal of the Programme of Action for the Least Developed Countries (PoA) is "to make substantial progress toward halving the proportion of

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people living in extreme poverty and suffering from hunger by 2015 and promote the sustainable development of the LDCs". The Programme of Action contains 30 international development goals, including those contained in the Millennium Declaration . They are embedded in the commitments of the LDCs and their development partners. Commitments: The Programme is based on shared but differentiated responsibilities or mutual commitments of the LDCs and their development partners and articulates their policies and measures by the LDCs in seven interlinked areas: 1) Fostering a people-centered policy framework; 2) Good governance at national and international levels; 3) Building human and institutional capacities; 4) Building productive capacities to make globalization work for LDCs; 5) Enhancing the role of trade in development; 6) Reducing vulnerability and protecting the environment and 7) Mobilizing financial resources. Cross-cutting issues: The Programme contains ten cross-cutting priority issues: poverty eradication, gender equality, employment, governance at national and international levels, capacity-building, sustainable development, special problems of landlocked and small island LDCs, and challenges faced by LDCs affected by conflict. Guiding principles: The implementation of the Programme of Action is guided by the following principles: 1. An integrated approach: The development process should be viewed in a comprehensive, coherent and long-term manner by LDCs and their partners, including the multilateral agencies within and outside the United Nations system. When addressing economic development and poverty eradication, there should be a balance between economic and other objectives of development. The implementation of the Programme of Action should be integrated into all international processes of concern to the LDCs. 2. Genuine partnership: With greater alignment between national policies and strategies in LDCs and the external assistance strategies of their partners, the scope for more effective dialogue between them has expanded. Open and transparent development cooperation, underpinned by strong political will, can help bring about rapid transformations in LDCs.

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3. Country ownership: All efforts should be made by LDCs and their partners to ensure genuinely country-led development. This will be aided by the joint identification of development priorities by LDCs and their development partners. Also, LDCs will need to be effectively involved in areas such as aid coordination and debt relief. 4. Market considerations: While acknowledging the importance of market forces in the sustained process of economic growth and poverty reduction, there is a need to ensure an appropriate mix of public-private participation. However, this cannot be achieved without adequate attention to market weaknesses as well as government weaknesses, and consideration of the preparedness of the private sector. It is necessary to work towards a good balance between public action and private initiative. To be fully productive, however, a market must operate within a stable legal and economic framework. 5) Result orientation: Only positive concrete processes and outcomes can sustain public confidence in the development partnership between LDCs and their development partners. The process of identifying, assessing and monitoring progress on processes and concrete outcomes will be a key aspect of the implementation of the Programme of Action and its success will be judged by its contribution to progress of LDCs towards achieving international development targets, as well as their graduation from the list of LDCs.

Progress of the Least Developed Countries on The Millennium Development
Forty-eight indicators have been agreed upon in the United Nations system for measuring implementation of the targets of the Millennium Development Goals. Statistics for these indicators are complied through the Inter-Agency and Expert Group on Millennium Development Goal Indicators led by the Statistics Division, Department of Economic and Social Affairs, of the United Nations Secretariat. These data, compiled from countries and estimated at regional level by the competent agencies, are made available through the United Nations Millennium Indicators Database ( Goal 1. Eradicate extreme poverty and hunger Target 1. Halve, between 1990 and 2025, the proportion of people whose income is less than one dollar a day Indicator 1. Proportion of population below $1(PPP) per day Indicator 1A. Proportion of population below national poverty line
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Indicator 2. Poverty gap ratio Indicator 3. Share of poorest quintile in national consumption

The World Bank’s latest-year estimates for this indicator cover 22 of the 50 least developed countries (see annex table A1). Included are half of the LDCs in sub-Saharan Africa (17 of 34 countries) and half of the LDCs in Asia (5 of 10). No data are available for Haiti or the 5 Oceania LDCs. In sub-Saharan Africa, relatively low rates of extreme poverty (less than 30 per cent) are found in Mauritania, Senegal and Tanzania, and high rates (over 55 per cent) in Burundi, Central African Republic, Ethiopia, Gambia, Mali, Niger, Sierra Leone and Zambia. The underweighted country average is 49 per cent. This is substantially higher than the underweighted country average for LDCs in Asia of 30 per cent. The World Bank publishes trend estimates for regions but not for countries. In sub-Saharan Africa as a whole, where 34 of the total of 54 countries or areas are LDCs, the rate of extreme poverty has actually increased slightly from 1990 to 2001, from 44.6 to 46.5 per cent. From this, it appears unlikely that the average rate in LDCs has decreased much if any. In Asia, Oceania and Haiti, economic and social circumstances among the LDCs and the sub-regions are too various to make any assessment as to the trend of extreme poverty in those LDCs.
  The World Bank also reports data for the rate of poverty in these countries according to national poverty lines. (See also table A1.) The country averages based on national poverty lines for 22 LDCs in sub-Saharan Africa are fairly consistent with those based on the international extreme poverty line52.5 compared to 49.3—but significantly higher for the 5 LDCs in Asia-43.8 compared to 30.

This difference may result from different conceptions of acceptable poverty lines in these two regions, or from methodological differences.

The difference in rates given in table A1 for national and international poverty lines in LDCs in sub-Saharan Africa and Asia may also be due to a different structure of consumption distribution. In sub-Saharan Africa the LDC average poverty gap, indicating the depth of extreme poverty, is 22.4, compared to 7.7 in Asia. The limited data available on the poorest quintile’s share in national income or consumption (see table A2) also suggest that inequality is much greater in the LDCs of sub-Saharan Africa than Asia.

Target 2. Halve, between 1990 and 2015, the proportion of people who suffer from hunger
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Indicator 4. Prevalence of underweight children under 5 years of age Indicator 5. Proportion of population below minimum level of dietary energy consumption The United Nations Children’s Fund and the World Health Organization prepare estimates of children moderately or severely underweight from household and health surveys in developing countries. Table 1 gives the available aggregate estimates for this indicator and for indicator five, on the estimated proportion of population with inadequate calorie supply. Indicator 5 estimates are prepared by the Food and Agriculture Organization of the United Nations. Overall, average rates of severely or moderately underweight children were lower around the year 2000 than rates of total population undernourished in Africa—27 per cent compared to 38 per cent—and in Haiti—28 per cent compared to 50 per cent—but the reverse was the case in Asia—40 percent of children compared to 32 per cent of the total population. Trend estimates are not available for this series. The FAO benchmark estimates of percentage of population undernourished based on insufficiency of calorie supply are available for 1990/1992 and 1998/2000. They cover most of the LDCs except those in Oceania.

These estimates show levels of undernutrition of less than 25 per cent (still a significant proportion) in only 11 countries and an average rate in sub-Saharan Africa of 38 per cent and Asia of 32 per cent. Rates of 50 per cent or more, with no significant progress since 1990/1992, were found in five countries (Afghanistan, Burundi, Comoros, Equatorial Guinea and Zambia).

Eleven countries recorded significant decreases (5 or more percentage points) in the rate of undernutrition while nine recorded significant increases (5 or more percentage points). In three countries, the rate of undernutrition increased by 9 or more percentage points—Burundi, Chad, DR Congo and Tanzania. Overall, there was no significant change in the average undernutrition rate in the least developed countries of sub-Saharan Africa and a very small estimated improvement of 1.7 percentage points in those of Asia

Goal 2. Universal primary education Goal 3. Gender equality and empowerment of women Least developed countries made considerable progress in achieving universal primary education in education and literacy between 1990 and years around 2000 but are still far short
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of achieving the goals in most LDCs in Africa and in Haiti, and in several of the LDCs in Asia, including Afghanistan, Bangladesh, Bhutan and Yemen. Only a few data are available for the five LDCs of Oceania, but these indicate general achievement of these goals.

Most of the least developed countries in all regions have made good progress in achieving gender equality in primary education and literacy but lag somewhat at the secondary level and even more at the tertiary level. At the tertiary level in the LDCs of Africa, there are on average fewer than 50 women per 100 men enrolled.

Women participation in non-agricultural wage employment was very low in nearly all of the LDCs in all regions in 1990, less than 30 per cent of the total wage employment outside of agriculture. To date, 2000 data for this series are only available for a few LDCs. The participation of women in parliament continued at very low levels in 2003, on average 12 per cent in African LDCs, ten percent in Asia and two in Oceania. In Asian LDCs, however, ten per cent in 2003 was a significant increase from five per cent in 1990. Among the African LDCs, women’s participation actually declined in seven countries.

Goal 4. Child mortality Average under-five and infant mortality rates declined in the African LDCs by 10-12 percentage points from 1990 to 2002, but nearly twice that in the Asia LDCs and Haiti, according to available estimates. Rates in the Oceania LDCs were nearly half those in the Asia LDCs, or even lower. Without significant improvements in the African trends, those LDCs would at best reach levels in 2015 currently found in the Asian LDCs, far short of the possible and desirable targets. Goal 5. Maternal health Estimated ratios of maternal mortality remained well over 500 per 100,000 live births for most of the African LDCs, and for some of the LDCs of the other regions as well, such as Haiti, Bangladesh, Laos, Nepal, Yemen and Tuvalu. One of the main interventions widely endorsed to reduce these very high ratios is the presence of skilled, qualified attendants at birth but the proportion of births with skilled attendants is still less than half in most of the least developed countries except Oceania. See details in table A7.

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Goal 6. HIV/AIDS, malaria and other diseases

The HIV/AIDS pandemic has been particularly deadly in the African least developed countries and in Haiti, with 17 of those 35 countries with estimated infection rates over four per cent and six of those over nine per cent. In the Asian LDCs, Cambodia, Myanmar and Nepal have high rates of infection mainly in high-risk groups such as intravenous drug users and prostitutes, posing considerable danger of spreading to the general population.

Malaria infection rates are also very high among virtually all of the African LDCs and are the major cause of death among young children. Malaria is a much lower risk in the LDCs of other regions.

Goal 7. Environmental sustainability Deforestation is occurring in nearly all of the least developed countries. The average of loss was about two percentage points over the decade 1990-2000 but the rate varies widely among countries, as does the extent of forest cover. Least developed countries most heavily affected are Benin, Burundi, Comoros, Guinea-Bissau, Liberia, Malawi, Sudan, Togo, Uganda and Zambia in Africa, and Haiti, Myanmar, Nepal and Samoa.

Carbon dioxide emissions per capita are also rising rapidly in the least developed countries. From 1990 to 1999, they increased by an average of 23 per cent in the LDCs of Africa and by 135 per cent in those of Asia.

Looking at improved water supply, a modest average improvement is found in the rural areas of African least developed countries, from 44 to 51 per cent, but with an offsetting decline in rapidly growing urban areas, from 79 to 75 per cent, and general declines in Haiti. Estimates show no appreciable overall average changes in access to improved sanitation in these countries except in urban areas of Haiti. Trend data are not available on water and sanitation in the Asian and Oceania LDCs, but levels of access in 2000 were in all cases higher than in the African LDCs and Haiti. Goal 8. Develop a global partnership for development Target 12. Develop further an open, rule-based, predictable, non-discriminatory trading and financial system.

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Includes: a commitment to good governance, development, and poverty reduction—both nationally and internationally Target 13. Address the special needs of the least developed countries Includes: tariff and quota free access for the least developed countries’ exports: enhanced programme of debt relief for heavily indebted poor countries (HIPCs) and cancellation of official bilateral debts; and more generous official development assistance (ODA) for countries committed to poverty reduction.

Developments in LDCs
Three main features of skilled emigration from LDCs since the 1990s stand out: • Emigration rates were generally high among tertiary-educated persons by international

standards, with an unweighted mean for LDCs of 21 per cent in 2000. That was much higher than for all lower-middle-income and low-income countries, whose skilled emigration rate was below 8 per cent (weighted). • There was considerable variation in the total rates of emigration among tertiary–educated

persons by and within country groups among the LDCs. They were close to 25 per cent (unweighted) in the island LDCs, West Africa and East Africa, and lowest in the generally more populated Asian LDCs (6 per cent), with Central Africa falling in between (14 per cent). Apart from in island LDCs, out-migration rates were especially high in countries that had experienced political instability in the 1980s and 1990s (Sudan, Liberia, Mozambique, Somalia and Eritrea) and in some of the poorest countries (e.g. Sierra Leone). By contrast, emigration rates were lowest in all the more populous Asian countries (especially Nepal, Myanmar and Bangladesh) and in some of the larger countries (Democratic Republic of the Congo, Sudan, Niger and Malawi). • Out-migration among tertiary-educated persons from LDCs to OECD countries has

accelerated over the last 15 years. The unweighted mean emigration rate rose from 16 per cent in 1990 to 21 per cent 10 years later. That intensification of emigration among skilled persons was much stronger than among all emigrants from LDCs. • Emigration of highly educated persons with more than basic tertiary training tends to be

much greater than for the tertiary-educated population as a whole. It is estimated that as many as 30–50 per cent of the developing world’s population trained in science and technology (including those from LDCs) live in the developed world. This has a direct impact on those countries’ skills base, their absorptive capacity and their technological catch-up possibilities.
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Identifying Problems

Question No. 1: If Per Capita Income Tk. 480/=, GDP Growth Rate is 6.51%, the Population Growth Rate is 1.47% then how many years it will take for Bangladesh (BD) to be out of LDCs?

Solution: According to question we find that :Given, Current Per Capita Income for BD Tk 480/=, GDP Growth Rate 6.51 % Population Growth Rate 1.47% and Graduate form LDCs Per Capita Income is Tk 900/= Estimated time (n) =?
n Per Capita Income {1+ Growth Rate} = Graduate from LDCs Per Capita Income needed n Tk 480 {1+ (GDP Growth Rate - Population Growth Rate)} = Tk 900 n Tk 480 {1+ (6.51 - 1.47) %} = Tk 900 n (1+ 0.0504) = 1.875 n (1+ 0.0504) = 1.875 n log 1.0504 = log 1.875

n = log 1.875/ log 1.0504 n = 12.7841
 13 years required for Bangladesh to come out from LDCs.

Question No. 2: In the year 2007, Bangladesh is the member of the LDCs. Per capita income is tk.480 in BD. What Net growth rate will be needed to reach the graduation stage from the LDCs within 2020?

Solution: According to question we find that –
Per capita income (P) = Tk.480 GDP growth rate = ? Population growth rate = ? Estimated time (n) = 2007 to 2020, in total 15 years

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According to the graduation from the LDCs Bangladesh have to increase their per capita income up to Tk.900. So. The formula is => P (1+r) n where r or Net growth rate = GDP growth rate – Population growth rate. But there is no GDP growth rate and Population growth rate. So we have to find out the Net growth rate (r). Now the Equation is => 480 (1+r) 14 = 900

=> (1+r) => 1+r =

= 900/480 or 1.875 (1.875)

=> r = 1.0459 – 1 => r = .0459 * 100 = 4.59% or 5%

So, I analyze the result and find that if Bangladesh is going with the 4.59 to 5% Net growth rate to the next 14 years and the remaining things are in favor then BD will remove from the LDC within the year 2020.

It is not possible to halt the emigration of qualified persons from LDCs to developed countries. Therefore, policies in both sending and receiving countries should be targeted at reducing the flows that are shown to be most detrimental to national development, and at increasing the benefits deriving from all types of skilled out-migration. Those policies should be implemented by destination countries and origin countries, and at the international level. • • • The main policy actions to be considered in destination countries are as follows: Favouring the temporary entrance of qualified professionals from LDCs, rather than permanent immigration; Establishing development assistance programmes that help LDCs to retain their professionals (e.g. in academia or in the health sector) through better pay, redesign of career paths and better working conditions; • Creating programmes of assistance for skilled emigrants returning to their home countries, which support their professional reinsertion and their gainful employment by making use of their skills; and

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Refraining from recruiting LDC professionals in those careers where it is clear that emigration has negative consequences for home countries.

Home countries have three basic lines of policy alternatives for dealing with the emigration of skilled persons: • Retention. Preventing immigration requires that professionals be offered more job opportunities, better working conditions and career paths. This depends on general economic conditions, but targeted government initiatives in sectors such as education, research and health can have an immediate impact. • Return. LDCs gain more from the permanent return of skilled emigrants than from shortterm stays. However, policies to that end are more difficult to devise and implement. Therefore, in the short run they should focus more on the short-term return of emigrants. This can involve teachers and professors giving crash courses, engineers providing specific inputs in sectors relevant to their field of expertise, doctors returning to assist with specific health-care campaigns, and so forth. Such programmes can eventually lead to permanent return. • Diaspora. Countries of origin can benefit from diaspora professionals by maintaining contact with them and attracting them to specific activities and projects. This requires that databases of emigrated skilled persons be established and maintained, so as to engage them in those activities and projects. International action by donors, international organizations and/or developing countries themselves should concentrate on: • • • Supporting LDCs in attracting back emigrants on both a permanent and a temporary basis by establishing target programmes; Providing assistance to LDCs in enhancing the gains from diaspora links; and Establishing regional initiatives that facilitate temporary movement of professionals so as to enable LDCs to benefit from brain circulation.

One of the most important insights regarding development in the last 25 years is that knowledge and learning are at the centre of the process of economic growth, and that most of

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the LDCs’ development partners still need to translate this insight effectively into their programmes. Increasing knowledge aid which is directed to supporting knowledge accumulation in recipient countries by expanding their knowledge resources and supporting their knowledge systems could be the key to increasing aid effectiveness.

It is difficult to quantify the level of aid for STI in LDCs. But only 3 per cent of aid disbursements went to research and advanced and/or specialized training during the period 2003–2005. Moreover, aid for STI in LDCs is currently provided in a disjointed way with insufficient focus on systemic support for enterprise learning and innovation. The declining level of aid commitments for agricultural research, agricultural extension and agricultural education are particularly disturbing since agricultural research and extension are identified as priorities in LDCs’ PRSPs. But it is equally important that donors support technological learning and innovation outside agriculture.

This Assignment contain a number of specific recommendations with regard to aid for STI in relation to agriculture, industry and trade. Firstly, there is a need for a rapid increase in ODA for agricultural R&D for the LDCs. Secondly, the effectiveness of ODA for non-agricultural technological learning and innovation has been severely compromised because donors do not prioritize that activity. It is recommended that donor-supported physical infrastructure projects all include components which use the construction process to develop domestic design and engineering capabilities. In addition, there is a need for public support for enterprise-based technological learning, which should be in the form of grants or soft loans for investment in the relevant types of knowledge assets. Such public support should be undertaken as a cost-sharing public–private partnership for creating public goods, particularly in relation to the development of design and engineering skills through enterprise-based practice. These STI capacity-building activities could be particularly useful if they are linked to value-chain development schemes, FDI linkage development and the facilitation of South– South cooperation.

Thirdly, it is important to integrate a technological development component into “Aid for Trade” and ensure that technological development issues are included in the Action Matrices of DTIS. Finally, there has been some discussion of ways in which trade preferences for LDCs could be enhanced not simply by extending their depth and coverage but also by linking them to supply-side support, for

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One of the most important insights regarding development in the last 25 years is that knowledge and learning are at the centre of the process, and most of the LDCs’ development partners still need to translate this insight effectively into their programmers.

There is a need for a rapid increase in ODA for agricultural R&D for the LDCs. There is a need for public support for enterprise-based technological learning, which should be in the form of grants or soft loans for investment in the relevant types of knowledge assets. Trade preferences for LDCs could be enhanced by linking them to supply-side support in the form of a technology fund which seeks to leverage the technological learning effects of the productive activities that are stimulated through such preferences, in particular through diffusion of best practices and encouragement of upgrading.

example through complementary measures to encourage FDI. From the point of view of technological assimilation, it is clear that trade preferences, particularly in relation to garments, have successfully stimulated the initial implementation of manufacturing activities in some LDCs. However, they do not explicitly facilitate the diffusion of best practices to domestic firms within a country and do not encourage technological upgrading. Against that background, it is worth examining whether trade preferences can be supplemented with a trade-preference-related technology fund which seeks to leverage the technological learning effects of the productive activities that are stimulated through such preferences, in particular through diffusion of best practices and encouragement of upgrading. Work should be done on the possible design for such a fund.

The overall findings is that unless the LDCs adopt policies to stimulate technological catch-up with the rest of the world, they will continue to fall behind other countries technologically and face deepening marginalization in the global economy. Moreover, the focus of those policies should be on proactive technological learning by domestic enterprises rather than on conventionally understood technological transfer, and on commercial innovation rather than on pure scientific research. Since the 1990s most LDCs have undertaken rapid and deep trade and investment liberalization. Liberalization without technological learning will result, in the end, in increased marginalization.

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