GDP per Capita (PPPa U.S.$) GDP per Capita Annual Growth Rate Life Expectancy at Birth (years) Adult Literacy Rate (%) LDC Region 2007 2007 1975–2005 1990–2005 2007 1999–2007b Latin America and Caribbean 0.821 10,077 0.7 1.2 73.4 91.2
East Asia and Pacific 0.770 5,733 6.1 5.8 72.2 92.7 Arab States 0.719 8,202 0.7 2.3 68.5 71.2 South Asia 0.612 2,905 2.6 3.4 64.1 64.2 Sub-Saharan Africa 0.514 2,031 !0.5 0.5 51.5 62.9
aPurchasing power parity
bData refer to national literacy estimates from surveys conducted between 1999 and 2007. Sources: UNDP, Human Development Report 2009 (New York: Palgrave Macmillan, 2009),Table H, p.174;
UNDP, Human Development Report 2007/2008 (New York: Palgrave Macmillan, 2007),Table 14, p.280.
In 1971 the United Nations compiled a list of 24 least developed countries (LLDCs), which has now grown to 49 countries. The United Nations describes the LLDCs as having low per capita incomes; weak human assets (i.e., nutrition, health, school enrollment, and adult literacy); and high economic vulnerability (i.e., instability of production and exports, exposure to shocks, and economic smallness and remoteness). Thirty-four of the 49 LLDCs are in Africa; the others are in Asia and in islands in the Pacific and the Caribbean. The LLDCs as a group had fairly strong economic growth from 2002 to 2007, but that is currently in jeopardy. With the 2008 global financial crisis, LLDCs have lost export revenue because of declining commodity prices and have found it more difficult to attract external finance. LLDCs as a group also have high levels of indebtedness, amounting to 42 percent of their GNI. The DCs have indicated that their foreign aid, or official development assistance (ODA), to LLDCs will not decline, but historical trends show that donor countries tend to shift their funds from aid-giving to domestic budgetary priorities in response to financial crises. LLDCs also depend on remittances, or the transfer of money from foreign workers to family members and others in their home countries. This basic source of supplementary income in LLDCs is also under threat because of the financial crisis. Thus, the 2009 United Nations Least Developed Countries
Report warns that the LLDCs are likely to be the major victims of the global
It is also important to consider inequities within states. Statistics show that within-country income inequality declined from the 1950s to 1970s in most DCs, LDCs, and centrally planned economies (CPEs). However, this decline slowed beginning in the 1980s, and income inequality has been increasing in many states in recent years.52Within-country inequities stem from differences
in educational opportunities, gender, race and ethnicity, and region of birth. For example, there are persistent gender gaps in access to education, employ- ment, and equitable pay for work. Women account for about two-thirds of adult illiteracy today. Although the number of women in the workforce has increased in LDCs, they usually have lower pay and poorer working condi- tions. Some areas such as rural China and northwest India have significantly more boy than girl infants because of sex-selective abortion and differential care after birth.53Although this book discusses within-country inequities and
inequities among LDCs, it gives more emphasis to North–South inequities. Some LDCs have improved their socioeconomic positions, but many have been frustrated in their efforts to promote development and exert more influence. Because most LDCs are in a weak position individually, only collective action provides some opportunity to extract concessions from the North. From the South’s perspective, some KIEO policies pose major obstacles to economic development. This chapter briefly discusses the United Nations Conference on
Trade and Development (UNCTAD), which gives priority to the interests of
LDCs (see Chapter 7).
In the 1960s many LDCs gained political independence, and the number of African and Asian states in the United Nations increased from 10 in 1955 to 55 in 1966. In 1964, the 77 LDCs in the United Nations from Africa, Asia, and Latin America (“the Third World”) met to express their dissatis- faction with the KIEOs, and this LDC caucus, which now has 130 members, is still referred to as the Group of 77 (G77).54The G77 was highly critical of
GATT, which it viewed as a rich countries’ club, and it was instrumental in organizing the first United Nations Conference on Trade and Development, or UNCTAD I, in March 1964. UNCTAD subsequently became a permanent forum or conference under the UN General Assembly, with facilities to do research and policy analysis (see Figure 2.1). Unlike the KIEOs, UNCTAD depends on UN funds for its operating budget and its technical cooperation activities. Although all UN members are in UNCTAD, its secretariat openly supports LDC interests, and the UNCTAD secretary general has always been from the South. UNCTAD established some international commodity agree- ments and has induced the GATT/WTO to give more priority to Southern trade interests (see Chapter 7). However, the DCs refused to accept UNC- TAD as a major forum for trade negotiations, and the WTO continues to be the unrivaled global trade organization. UNCTAD acts mainly as a pressure group for Southern interests and as a source of technical expertise. For example UNCTAD has assisted LDCs with the complex process of joining the WTO. In recent years, UNCTAD’s critical approach has been replaced by a greater acceptance of orthodox liberalism, but the 2008 global financial
Postwar Economic Institutions and the Centrally Planned Economies 39 crisis has caused it to warn against the danger of an unrestrained free market. Thus, the UNCTAD 2009 Least Developed Countries Report states that “it is widely recognized that the current financial crisis is the result of weaknesses in the neoliberal model that has been shaping global economic policies in the last three decades.”55