Day Two Highlights: Driving Transformation, Trade Integration, and Resilience for LDCs

The second day of the High-Level Meeting on “Forging Ambitious Global Partnerships for Sustainable and Resilient Graduation of Least Developed Countries” featured three dynamic sessions that explored how graduating and graduated LDCs can secure sustainable progress, integrate into global trade systems, and build resilience against future shocks.

Session 4: Driving Structural Transformation for Sustainable Graduation

Experts emphasized that graduation without strengthening productive capacities risks leaving countries trapped in low-value, low-productivity systems. Keynote speaker Dr. Taffere Tesfashew called for a new generation of industrial policies that go beyond manufacturing to embrace skills development, technological learning, innovation, digitalization, and green industrialization. These policies must be multidimensional and evidence-based, guided by tools such as the Productive Capacities Index (PCI) and Gap Assessments.

Speakers emphasized that transformation does not mean abandoning agriculture but modernizing it through value addition, agro-processing, and climate-resilient practices. Agriculture was highlighted as a foundation for industrialization and a strategic investment for productivity, food security, and employment. Regional integration emerged as a key driver of competitiveness, enabling market expansion and stronger value chains through shared infrastructure and coordinated resource management.

Human capital and SMEs were identified as the backbone of transformation. Technical education, STEM skills, and digital literacy are essential for upgrading economies, while SMEs—responsible for up to 65% of employment—need better access to finance, innovation support, and digital tools. Infrastructure gaps in energy, transport, and connectivity remain binding constraints, underscoring the need for rural electrification, broadband access, and e-commerce readiness.

Financing transformation requires moving beyond aid to mobilize private capital, impact investment, and blended finance aligned with national priorities. The session concluded that structural transformation must accelerate through productivity gains, diversification, and strong partnerships—anchored in national ownership and supported by international cooperation.

The session’s message was clear: graduation should be a springboard for “graduation with momentum,” not vulnerability.

Session 5: Fostering Resilient Graduation and Integration into Global Trade

This session focused on ensuring smooth and sustainable integration of LDCs into global trade and innovation systems as preference regimes are phased out. Chaired by H.E. Mr. Amrit Bahadur Rai and featuring a keynote by H.E. Mr. Xiangchen Zhang of the WTO, discussions highlighted vulnerabilities such as concentrated exports, institutional gaps, and climate-related risks.

Participants welcomed the WTO’s MC13 decision granting a three-year transition period but called for additional measures: extended duty-free and quota-free access, simplified rules of origin, continued TRIPS flexibilities, and sustained Aid for Trade support within a predictable framework. Strengthening state capacity, improving inter-ministerial coordination, and investing in negotiation skills, standards compliance, and digital trade readiness were identified as priorities. Economic diversification, regional integration, and green investment emerged as critical drivers for resilience.

Key Takeaways are predictable, time-bound transition mechanisms are essential; Institutional and negotiation capacities must be strengthened; diversification and digital trade readiness should be prioritized; trade, climate, and industrial policies must be closely aligned.

Session 6: Bouncing Forward—Building Resilience Beyond Graduation

The final session of the day addressed how LDCs can withstand compounding shocks while sustaining inclusive growth. Keynote speaker Dr. Daniel Gay urged a rethink of resilience: rather than “bouncing back” to pre-crisis conditions, LDCs must “bounce forward”—emerging stronger through structural transformation. With climate crises, pandemics, and geopolitical tensions becoming the norm, adaptation and innovation are imperative.

Drawing lessons from East Asia, Dr. Gay noted that countries with strong productive capacities and technological sophistication rebounded fastest from global shocks. For LDCs, this means investing in diversified economies, building robust trade linkages, and embracing expansionary policies during crises. International support remains vital, but national strategies—leveraging assets, fostering innovation, and prioritizing inclusive growth—are equally critical.

The session concluded that future shocks are inevitable, but with risk-informed strategies, innovative financing, and global partnerships, LDCs can transform vulnerability into opportunity.

Overall Message: Day Two reinforced that sustainable graduation is not an endpoint but a process requiring structural transformation, seamless trade integration, and resilience-building. Through ambitious partnerships, evidence-based policies, and investment in productive capacities, LDCs can chart a path toward inclusive, high-value, and climate-resilient development.