The Least Developed Countries:
Historical Background

Policy initiatives within UNCTAD

Special attention to what were then called the "less developed" among the developing countries began at the first session of UNCTAD in 1964 and has gathered momentum since.

The first resolution on the subject of the least developed countries was adopted at UNCTAD II in 1968 (resolution 24 (II)). Provision for special measures in favour of the least developed countries (LDCs) was included in the International Development Strategy for the Second United Nations Development Decade. A detailed description of the general situation of these countries was set out in reports by two groups of experts, in 1969 and 1971 respectively, although at that point there was no agreed list of least developed countries.

It should be recalled in this context that until the mid 1960s, developing countries were considered as homogeneous with the only distinctions being the structure of their commodity exports. As such an approach was simplistic and inadequate for conceptualizing certain policy measures, the UNCTAD secretariat embarked on basic research into what was termed the "typology" of developing countries. Drawing upon UNCTAD's work on identification and classification and on the recommendations of the Committee on Development Planning (CDP) which looked into the establishment of a list of least developed countries, a task that was fraught with methodological and political problems, the General Assembly approved the list of the LDCs in 1971. After considerable debate the CDP decided to use the following criteria: per capita gross domestic product (GDP) of $100 (in 1968 United States dollars) or less; share of manufacturing in total GDP of 10 per cent or less; adult literacy rate of 20 per cent or less.

The original list included the following countries: Afghanistan, Benin, Bhutan, Botswana, Burundi, Chad, Ethiopia, Guinea, Haiti, the Lao People's Democratic Republic, Lesotho, Malawi, Maldives, Mali, Nepal, Niger, Rwanda, Somalia, Sudan, Uganda, United Republic of Tanzania, Upper Volta (now Burkina Faso), Samoa and the Yemen Arab Republic. Subsequently the following countries were added to the list: Bangladesh, Central African Republic, Democratic Yemen and the Gambia in 1975; Cape Verde and the Comoros in 1977; Guinea-Bissau in 1981; Djibouti, Equatorial Guinea, Sao Tome and Principe, Sierra Leone and Togo in 1982; Vanuatu in 1985; Kiribati, Mauritania and Tuvalu in 1986; Myanmar in 1987; Mozambique in 1988; Liberia in 1990; Cambodia, Madagascar, Solomon Islands, Zaire and Zambia in 1991 and Eritrea and Angola in 1994. Botswana is the only country which graduated from the list of the LDCs in 1994. The present group of 48 least developed countries comprised a population of 610.5 million in 1997.

As a result of the creation of a specific list, UNCTAD was able to begin more focused analytical work about special measures in favour of least developed countries. The first comprehensive resolution on special measures for these countries was adopted at UNCTAD III in 1972 (resolution 62 (III)), and a further resolution was adopted at UNCTAD IV, in 1976, (resolution 98 (IV)). In 1974, the UNCTAD Trade and Development Board recognized the need to have integrated action on behalf of the least developed countries and decided to convene an intergovernmental group to initiate intensified efforts towards the formulation, development, review and appraisal of policies and measures in their favour. The Intergovernmental Group on the Least Developed Countries met for the first time in 1975 and gave a substantial push towards the elaboration of special measures for these countries.

During the 1970s, it became evident that least developed countries were lagging further and further behind, and in some cases moving backwards. Their average growth rates were lower in the Second United Nations Development Decade (about 0.6 per cent) than in the first (about 0.9 per cent), and much lower than those of other developing countries. As a group least developed countries recorded per capita declines in this period in each of the following key economic areas: agricultural production, manufacturing output, gross domestic investment, export purchasing power, and import volume. Thus the second session of the Intergovernmental Group, which met in 1978, requested the UNCTAD secretariat: to carry out a series of detailed studies on the overall assistance requirements of least developed countries, which were to be examined by a high-level expert group at the end of 1979; and to prepare a document which would outline a programme of action for these countries. It also suggested that full consideration be given at the fifth session of the Conference to launching a coherent, sustained and effective substantial new programme of action for the 1980s.

The secretariat put forward such an outline in the form of an issues note for the fifth session of the Conference, which provided the basis for resolution 122 (V) launching a comprehensive and substantially expanded programme in two phases: an immediate Action Programme (1979-1981) and a Substantial New Programme of Action (SNPA) for the 1980s for the least developed countries. This resolution stressed the urgent need to reverse the poor performance of least developed countries, mostly through the infusion of vastly increased flows of foreign assistance. It also contained the first mention of the need to double aid to these countries as soon as possible.

The First United Nations Conference on the Least Developed Countries (1981)

In view of the special importance of the SNPA, the General Assembly decided in 1979 to act upon the recommendation in Conference resolution 122 (V) to convene a United Nations Conference on the Least Developed Countries in order to finalize, adopt and support the Substantial New Programme of Action. The United Nations Conference on the Least Developed Countries was held in Paris from 1 to 14 September 1981.

The Substantial New Programme of Action (SNPA)

At that Conference the international community unanimously adopted the Substantial New Programme of Action for the 1980s for the Least Developed Countries (SNPA), containing guidelines for domestic action by LDCS, which were to be complemented by international support measures. However, despite major policy reforms initiated by many LDCs to carry out a structural transformation of their domestic economies, and supportive measures taken by a number of donors in the areas of aid, debt and trade, the economic situation of these countries as a whole worsened during the 1980s. Factors which contributed to this worsening state of affairs included domestic policy shortcomings, natural disasters and adverse external conditions. In addition, external debt servicing emerged as a major problem for most LDCs during the 1980s.

The Second United Nations Conference on the Least Developed Countries (1990)

For the international community, the refusal to accept the deterioration in the socio-economic situation of the least developed countries was an ethical imperative. Thus, the United Nations General Assembly, upon the recommendation of UNCTAD VII, decided at its forty-second session in 1987, to convene the Second United Nations Conference on the Least Developed Countries. The Conference, in which 150 Governments participated, was held in Paris from 3 to 14 September 1990. It reviewed the socio-economic progress in the Least Developed Countries during the 1980s as well as progress in international support measures during that decade; it also formulated national and international policies and measures for accelerating the development process in the Least Developed Countries for the 1990s. Drawing on the experience and lessons from the 1980s, the Conference was able to agree on the strategies and development priorities for those countries for the 1990s.

The outcome of the Conference was embodied in the Paris Declaration and the Programme of Action for the Least Developed Countries for the 1990s. In these documents, the international community committed itself to urgent and effective action, based on the principle of shared responsibility and strengthened partnership, to arrest and reverse the deterioration in the socio-economic situation in the Least Developed Countries and to revitalize their growth and development. The various elements of the Programme should be viewed as an essential component of the overall strategy for economic and social progress for the developing world. It represents a qualitative step forward beyond the SNPA adopted in 1981 and contains many novel features. One notable aspect concerning actions at the national level relates to the emphasis placed on the need for development to be human-centred and broadly based. Other elements highlighted in the Programme include respect for human rights and observance of the rule of law, the need to improve and expand institutional capabilities and efficiency, and the importance of decentralization, democratization and transparency at all levels of decision-making.

The Programme sets out detailed policy provisions for mobilizing and developing human capacities in the Least Developed Countries as well as for the development of their economic base. On the key issue of external financial support, the international community, particularly the developed countries, collectively committed itself to a significant and substantial increase in such support. The Programme provides for a set of alternative targets, which maps out clearly the different undertakings made by the donors in this regard.

The impact of UNCTAD's efforts

These results of UNCTAD's work that originally led to the creation of the list of least developed countries has subsequently led to an increasing awareness of the special needs of these countries. This awareness has changed policies of countries and multilateral agencies in several important ways. There has been a shift in the share of official assistance going to this group of countries; several donor countries have not only provided an increasing share of their assistance but have also under Board resolution 165 (S-IX) "Debt and Development problems of developing countries" (1978) cancelled the debt of, or taken other debt relief measures in favour of, these countries. The shift has been particularly noticeable for major multilateral organizations, which are now providing a major share of their assistance to the least developed countries. This awareness has also led to a few innovations in commercial policy measures on behalf of these countries. The creation of a special sub-committee for least developed countries within GATT previously and now within WTO should be noted, as should the WTO Plan of Action for the Least Developed Countries. Trade preferences, including provisions in the Lomé Conventions and within the generalized system of preferences (GSP), have also resulted. The international community's growing awareness has also resulted in the creation of special focal points for activities on behalf of least developed countries within many organizations of the United Nations system, which in turn have led to an increasing emphasis on them in both regular work programmes as well as in technical co-operation activities.

The efforts of the 1960s, 1970s and 1980s have thus led to the identification of a relatively small category of the very poorest and structurally weakest countries and to the acceptance by the international community that these least developed countries are deserving of special and specific attention.