Major study on COVID-19 impact on LDCs released
Upon request of the Economic and Social Council of the United Nations, the Committee for Development Policy undertook a comprehensive study on the impact of COVID-19 on the least developed country (LDC) category.
While LDCs have up to now been successful to limit direct health impacts of the COVID-19 pandemic, the socio-economic fallout has been extremely hard. Declining exports, the standstill in international tourism, falling remittances and FDI inflows have exacerbated existing economic vulnerabilities. Limited fiscal space prevents most LDCs from providing adequate fiscal response. Economic growth is expected to be subdued in the medium term, poverty is increasing, inequalities are worsening, and progress towards reaching the Sustainable Development Goals has been reversed in too many countries.
Most LDCs that are already graduating or are recommended for graduation remain at low risk of falling back below official graduation thresholds. Ensuring their graduations are sustainable requires careful monitoring throughout the graduation, extended timeframes to prepare for the actual graduation date and generous and targeted international support. However, LDCs further behind might see their aspirations to graduate postponed for years, making improved international assistance to them imperative. The agreed principle of “reaching the furthest behind first” requires LDCs are accorded priority in vaccinations efforts as well as strengthening their public health systems. Effective debt relief must be an essential element of enhanced financial support for LDCs. Global recovery from the pandemic must renew efforts towards the sustainable and inclusive transformation of LDC economies.