Performances of the Least Developed Countries under Neo-liberal Regimes: Implications for the implementation of Agenda 2030 for Sustainable Development

Abstract

The Least Developed Countries (LDCs) have implemented neoliberal policies such as trade liberalization, privatization of public enterprises, and currency devaluation with the expectation to promote their economic growth and development by capturing the gains from international trade through a more efficient allocation of resources and increased private investment. Twenty one countries (constituting 44%) have been designated LDCs since 1971, the introduction of the category for the first time by the United Nations (UN). Development experiences of the LDCs indicate that neoliberal policies are not adequately addressing their development challenges. The LDCs  are still locked into a low equilibrium trap characterized by fragile economic growths, distorted  structural transformation,  low domestic resource, high dependence on external financing , high dependence on primary commodity exports, high external debt burden  and debt services  and  low human development. The LDCs must thus shift to a developmental state approach to strategically integrate into the world economy and to build their productive capacities and to enhance their structural transformation which could lead the countries along the path of sustained economic growth to meet the Sustainable Development Goals (SDGs) by 2030. The implications for the implementation of Agenda 2030 for sustainable development are that: (i) The LDCs have  to extensively tap their domestic savings potentials and investments to reach 25% or more of their Gross Domestic Product(GDP) to  sustain 7% -8% growth rates per annum that will have a great impact on  poverty reduction in line with the  sustainable development goal 1 (SDG1) . (ii) The LDCs have to select a few SDGs which are of high national priorities and  synchronize them  with their respective national development plans  and determine  the financing needs for the implementation  of the selected SDGs. (iii)  cancellation of external debt of the LDCs  by the creditors in order to release resources needed for their  investments to achieve the SDGs (iv) replacement of foreign aid  by market access for  the LDCs products to  increase their foreign exchange earnings needed for  building their  productive capacities. (v) Maintaining peace and stability and resolving conflicts to release resources needed for their productive investment.