Research Paper 28, May 2010

The Impact of the Global Economic Crisis on Industrial Development of Least Developed Countries.

The South Centre has released a Research Paper which examines the impact of the external shocks from the global economic crisis on industrial development of Least Developed Countries (LDCs).  These countries are heavily exposed to external shocks because of their extensive trade with the rest of the world.  Yet, they are marginalized in terms of their share in international trade and output.  The global economic crisis is a wake-up call for LDCs to reconsider their long-term industrial and development strategies.  There is no “one-size-fit-all” strategy.  However, some common policy guidelines should apply to all and this paper makes proposals for industrial development along these lines. These countries still have some room to manoeuvre despite considerable loss of policy space. However, in order to avoid the risk of human tragedy, particularly in Sub-Saharan Africa, there is also a need for changes in WTO rules, a fundamental change of policies of IFIs towardsLDCs, and a basic reconsideration of the proposed Economic Partnership Agreements (EPAs).

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