Covid-19 and climate change slow down economic progress in Least Developed Countries, says ILO – South Asia Time

Covid-19 and climate change slow down economic progress in Least Developed Countries, says ILO

 May 3, 2022  

Kathmandu: Economic and social progress in Least Developed Countries (LDCs) have been slowed by the impact of the Covid-19 pandemic, climate change and the continuing energy and food crises, a UN agency said.

According to a report by the International Labour Organization (ILO), most LDCs responded rapidly to the pandemic by implementing a wide range of support packages, despite widening financial gaps and limited fiscal space.

However, structural weaknesses have rendered them more vulnerable to the current multiple shocks and will be further exacerbated if the LDCs do not fully participate in the global recovery.

The report, ‘Present and future of work in the LDCs’, presents an overview of the progress and the structural challenges faced by LDCs in terms of structural transformation, a just transition to greener economies and the creation of full and productive employment and decent work.

It covers current trends in production, productivity, employment and decent work, as well as the role of social protection and institutions of work.

There are currently 46 countries on the list of LDCs, representing 12 percent of the world’s population. They are characterized by low-income levels and vulnerability to economic and environmental shocks, low human development, extreme poverty and high mortality rates.

According to the report, LDCs’ vulnerabilities are largely the result of weak productive capacities associated with a lack of human capabilities, inadequate infrastructure and limited capacity to access and use technologies. They are also the result of weak institutions, including the institutions of work and social protection systems.

Informal employment is pervasive and represents almost 90 per cent of total employment in the LDCs. Moreover, there is strong polarization between enterprises of different capacities and productivity.

The report assesses how digital technologies can potentially deliver large benefits to LDCs – particularly those with large young populations – provided that significant investments are made in capital, skills and knowledge to support productive and inclusive decent work.

The report includes a number of policy recommendations for a human-centered recovery that is inclusive, sustainable, and resilient.

“Multiple shocks have put Least Developed Countries under enormous pressure,” said ILO Director-General, Guy Ryder. “However, with the right employment and macroeconomic policy measures, new jobs can be created in both existing and new sectors, along with enhanced productivity and innovation-driven by investments in green and digital economic opportunities,” he added.