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• National policy framework for accelerated growth and poverty reduction • Strengthening human and institutional capacities • Strengthening productive capacities • The role of trade in development • Reducing economic vulnerability and protecting the environment |
Strengthening human and institutional capacitiesImprovements in the human capital of a poor nation is a vital condition for this nation's success in avoiding the risk of further marginalization from the global economy. In particular, the development of higher skills is important to any country that tries to improve its economic specialization through greater involvement in activities that require modern technology or imply the delivery of international services. Building institutional capacities is equally important, considering the multiplicity of areas in which public authorities must be able to act and intervene for the benefit of the people and of national economic actors, such as those concerned in the multilateral trade system. Strengthening productive capacitiesMost LDCs are handicapped by structural limitations in their supply capacity, principally because of serious deficiencies in skilled human resources and the physical infrastructure, and of a general failure to create an enabling business environment that will be attractive to potential investors. Strengthening productive capacities is therefore a crucial development objective. It generally implies improving the economic specialization of the country, either through gains in the efficiency and competitiveness of existing activities, or through the achievement of re-specialization with a view to seizing new economic opportunities under globalization forces. In the primary sector, agricultural diversification or further exploitation of marine or mineral resources can be an effective way of utilizing obvious comparative advantages. Developing new manufacturing activities has been difficult in many LDCs, despite the wealth of new economic opportunities that trade liberalization has generated. However, manufacturing remains a potential factor of stable economic growth, particularly when the relevant investment is conducive to a greater degree of local processing before export. An increasingly important avenue for economic diversification and steady growth is that of international services, which is already a vital source of foreign exchange earnings, employment and income in several LDCs. Particularly valuable to these countries is the scope for their participation in the growing international tourism industry. This sector already has a substantial positive economic and social impact in at least 18 LDCs, and demonstrates potential for beneficial development in 10 other countries of the group. A precious effect of sound and sustainable tourism development, in poor countries, is the catalytic impact of the sector on the rest of the economy, notably because tourism development implies the existence of a range of efficient domestic and international services (in particular, an important air transport linkage) that are also competitive inputs to other outward-oriented sectors.
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