UNCTAD/ALDC/MISC/2011/2
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AIDE MÉMOIRE UNCTAD Regional Workshop on Productive Capacities, Economic Growth and Poverty Reduction in African LDCs Venue: United Nations Economic Commission for Africa Addis Ababa, Ethiopia, 13 – 15 April 2011 I. Background Over the past three decades, the least developed countries (LDCs) have been following a development strategy designed to release the creative potential of market forces by reducing the role of the State in the development process. In the 1980s and 1990s, there was little indication that this strategy was working. But after the turn of the millennium, with the emergence of new Asian growth drivers and favourable movements in the terms of trade, economic growth began to accelerate. Some observers attributed this to the market‐oriented policy reforms undertaken by a number of LDCs, though others raised doubts about their pattern of growth, their sustainability and whether they addressed LDC structural vulnerabilities. Surging commodity prices (in some cases driven by speculative investment), debt forgiveness, increased aid flows, remittances and foreign direct investment (FDI) seemed vulnerable to a global economic downturn. There were also concerns that growth was not translating into substantial improvement in human well‐being. When commodity prices suddenly fell at the end of 2008, heralding a bust in the global economic cycle, many LDCs experienced a sharp slowdown, with major adverse social consequences. It was clear from this that markets are not only creative but also can be destructive. All developing countries, but in particular the LDCs, are facing a multi‐pronged global crisis: food, energy and climate crises, compounded by a severe economic crisis. Moreover, structural vulnerabilities render the LDCs more prone to crises than most developed and other developing countries. It is generally agreed that developing countries, particularly the LDCs, need to have access to additional sources of external funding, especially during the recovery phase of the crisis. The external funding would provide credit and liquidity funding for infrastructure investments, climate change mitigation, government support, public and private investments that could facilitate corporate borrowings and long term development of their productive capacities. New and innovative sources and uses of finance need to be elaborated and found quickly in order to avoid further deepening of the crisis or creating a lost decade of development. II. Objective The objective of this workshop is to contribute to the debate on the sources and impacts of the current food, energy, climatic and economic crises that are afflicting LDCs and on corresponding national and global actions needed for sustainable recovery of LDCs' economic performance. Additionally, it is meant as a preparatory activity in the context of the forthcoming Fourth United Nations Conference on the Least Developed Countries (LDC–IV). UNCTAD/ALDC/MISC/2011/2
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2 The LDC Report series has argued that this strategy will include the provision of global collective goods such as sustainable and climate‐compatible uses of resources, global economic stability and a trade and financial system conducive to sustainable growth and development. It will also require significant reforms of the current financing arrangements and systems that need to be targeted to meeting the specific development needs and challenges of the LDCs. This Workshop will provide an opportunity to discuss the main themes of the report and elucidate its analytical framework. Relevant themes broadly include (a) The nature and impact of the crises in LDCs; (b) Assessment of current measures and policy responses to crises; (c) LDC vulnerabilities; (d) Reform of the International Development Governance System; (e) Commodities price volatility and stabilization; (f) Aid effectiveness; (g) Climate change mitigation and adaptation; and (h) Other innovative forms of International Support Mechanisms. Bearing in mind the special needs of LDCs, the objective of the Workshop will be to evaluate the impact of current international support mechanisms on the LDCs’ real economy and enhancement of their development capacity, including their productive capacities and structural transformation, in order to propose a strategy for future alternative institutional design. This exercise may entail (a) reforming international development governance in order to address the particular needs of LDCs; (b) widening the agenda of international reform and regulation aimed specifically at addressing the development challenges of LDCs as a means of offsetting the impact of the crisis; (c) advancing national policies for the development of productive capacities; and (d) proposing new international mechanisms in areas related to trade, climate change, technology, South–South cooperation and commodity trade. The Workshop represents a forum for discussing alternative policy options for LDCs and for disseminating UNCTAD’s policy analysis with a view to having a greater impact on the development debate in the context of the LDC–IV, policymakers in LDCs, civil society and the international development community at large. It is therefore a unique occasion to widen and deepen policy dialogue between UNCTAD and LDC policymakers. III. Workshop proceedings The workshop will be framed around the following key themes: 
The State and development governance; 
Nature and impact of the crisis; 
Aid effectiveness; 
Technology; 
Trade policy; 
Agriculture and commodities; 
Climate change; 
South–South cooperation; and 
Implications for LDC–IV.