Progress in the least developed countries is blocked by multiple crises

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NEW YORK (ILO News) ‒ Economic and social progress in least developed countries (LDCs) has been slowed by the impact of the COVID-19 pandemic, climate change and the persistence of energy and food crises.

According to a report by the International Labor Organization (ILO), most LDCs responded quickly to the pandemic by implementing a wide range of support programs, despite growing financial gaps and limited fiscal space.

However, structural weaknesses have made them more vulnerable to the current multiple shocks and will be further exacerbated if LDCs do not participate fully in the global recovery.

The report, Present and future of work in LDCs, presents an overview of progress and structural challenges faced by LDCs in terms of structural transformation, just transition to greener economies and the creation of full and productive employment and decent work. It covers current trends in production, productivity, employment and decent work, as well as the role of social protection and labor institutions.

There are currently 46 countries on the LDC list, representing 12% of the world’s population. They are characterized by low levels of income and vulnerability to economic and environmental shocks, low human development, extreme poverty and high mortality rates.

According to the report, vulnerabilities in LDCs largely result from low productive capacities coupled with a lack of human capacities, inadequate infrastructure and limited ability to access and use technologies. They are also the result of weak institutions, including labor institutions and social protection systems.

Informal employment is pervasive and accounts for almost 90% of total employment in LDCs. Moreover, there is a strong polarization between companies of different capacities and productivity.

The report assesses the extent to which digital technologies have the potential to bring significant benefits to LDCs – particularly those with large youth populations – provided that significant investments are made in capital, skills and knowledge to support work decent productive and inclusive.

The report includes a number of policy recommendations for a human-centred recovery that is inclusive, sustainable and resilient. These include:

  1. Expand international assistance and cooperation, including official development assistance (ODA), to strengthen health care and vaccines and avoid unnecessary restrictions and barriers to trade and migration.
  2. Strengthen employment institutions and policies for the creation of decent jobs and improve policy coherence on climate action towards greener economies.
  3. Strengthen labor institutions and develop capacities to enable rights, such as freedom of association, collective bargaining and other fundamental principles and rights at work, with the active engagement of social partners.

This policy orientation would create a virtuous circle that would improve trust in government, facilitate a gradual shift to high value-added and environmentally sustainable activities, help reduce poverty and inequality and contribute to social justice, says the report.

“Multiple shocks have put the least developed countries under enormous pressure,” said ILO Director-General Guy Ryder. “However, with the right employment and macroeconomic policy measures, new jobs can be created in existing and new sectors, as well as increased productivity and innovation through investments in green and digital economic opportunities.”

Joel C. Hicks