CDP Policy Review No. 2

By Keun Lee

The paper discusses two ways of building productive capacity in LDCs: the manufacture of products to foreign buyers’ specifications, and the integration of resource-based sectors into global value chains using backward and forward linkages. Using country examples the paper then shows how government and the international community can support the growth of productive capacity in various ways including research institutes and public research organisations. The paper argues that some LDCs should try to leapfrog into newly emerging sectors such as renewable energy.