A Few Remarks on Recent Trends and Factors of LDCs’ Macroeconomic and Social Performance

Abstract

This paper, which is based on a series of author’s calculations and models, analyzes current situation, trends, factors and major determinants of Least Developed Countries’ (LDCs’) economic development during the last three to four decades. It is argued that despite many acute problems that they do not cease to face, several dozens of LDCs have recently started to progress on the path of rather fast and more or less sustained economic growth. Although LDCs are still grappling with severe forms of multidimensional poverty, substantial dearth of human capital and modern infrastructure, adequate economic, social, political and legal institutions, and encounter considerable foreign economic and climatic shocks, they on average during the last decade and a half managed to have markedly increased their rates of growth of per capita GDP and human development index. It should be underscored that LDCs having benefitted from significant improvement of barter terms of foreign trade, some upgrade in government effectiveness and implementation of a series of pragmatic economic reforms, have succeeded in expanding rates of growth of agricultural and manufacturing production and exports. The level of their gross capital formation has by and large considerably risen due to significant enlargement of the share of domestic savings related to GDP, FDI inflows and workers’ remittances. It would be incorrect to overemphasize the progress achieved by approximately three dozen LDCs (as the basis of their growth remains shaky), but, nevertheless, they have demonstrated noticeable improvement in dynamics of their investment efficiency and productivity growth.