NAIROBI, 19 July 2007 (IRIN) - To escape the poverty trap, the world's 50 least developed countries (LDCs) must narrow the technology gap between them and the rest of the world, the UN Conference on Trade and Development (UNCTAD) says in its 2007 report.

The director of UN-HABITAT's Monitoring and Research Division, Banji Oyelaran-Oyeyinka, said at the launch of the report in Nairobi, the Kenyan capital, said LDCs, most of which are in Africa and Asia, must increase the knowledge intensity of their economies.

"For example, how do you take a tuber like cassava or maize and transform it into a pharmaceutical product?" Oyeyinka said. "One must increase knowledge intensity to transform a low-value product into a high-value product; LDCs must use innovative designs in order to move from the laboratory to the market, especially in the agricultural field."

UNCTAD identified the 50 countries as least developed in terms of their low gross domestic product (GDP) per capita, weak human assets and high degree of economic vulnerability.

"LDCs must innovate their way out of poverty," says the UNCTAD report, which is subtitled Knowledge, Technological Learning and Innovation for Development.

The report makes practical suggestions and argues that knowledge-based development could be the foundation for a "re-invigorated and forward-looking partnership" for development in LDCs.

According to UNCTAD, at least 767 million people live in LDCs and 70 percent of their labour force work in agriculture. However, between 2003 and 2005, donors provided only US$22 million per year to support national agricultural research; $9 million for agricultural extension; and $12 million per year for agricultural education and training.

"This downward trend is particularly disturbing as agricultural research and extension are key priorities of the poverty reduction strategies of LDC governments," UNCTAD said. "Grinding rural poverty is mostly due to low levels of agricultural productivity as well as declining farm sizes. This makes science-based agricultural development urgent yet public investment in agricultural research in LDCs is at its lowest level since 1971."

National policies

Science, technology and innovation (STI) policies have been mostly neglected, according to the report, particularly in the context of structural adjustment programmes of the 1980s and 1990s and the Poverty Reduction Strategy Papers this decade.

To upgrade technological capacity, STI must become a priority for LDCs, which should focus on policies to leverage more technological learning from international markets.

"Knowledge is becoming more and more important in global production and competition, and there is a danger that LDCs will be increasingly marginalised if they do not increase the knowledge content of their economies and diversify them through learning and innovation," UNCTAD says.

It says governments and their development partners should focus on four key policy issues: integrating science, technology and innovation policies into national development and poverty reduction strategies; addressing stringent intellectual property rights; reversing the brain drain; and using knowledge aid - as part of official development assistance - to support learning and innovation.

Brain drain

UNCTAD says the emigration of skilled workers from LDCs is a serious barrier to using technology to help such countries to expand their economies.

According to UNCTAD, five LDCs - Cape Verde, Gambia, Haiti, Samoa and Somalia - have lost more than half of their university-educated professionals in recent years to industrialised countries. Overall, UNCTAD estimates that one million skilled people from LDCs lived and worked in developed countries in 2004 - 15 percent, considering there are at least 6.6 million people in LDCs with university-level education.

"Lost 'human capital' … can have serious consequences," the report warns. "The work of skilled professionals is a precondition for upgrading the productive structures and the exports of LDCs and for improving the sophistication of domestic businesses, not to mention for improving domestic health and education, which benefit entire populations."

Foreign aid

On foreign aid, the report says official foreign aid has been much less effective that it should be because it does not recognise the essential role of technology in sustained economic growth.

It says high-income G8 countries almost all have programmes to promote innovation among domestic businesses. But technological transfer has largely been missing from aid programmes.

Technology acquisition in LDCs through international markets is weak, UNCTAD says, so aid has to play a bigger role in developing the technological capabilities of domestic enterprises.

"Donor priorities do not comply with these needs," UNCTAD says.

It added that reported annual technical cooperation commitments for improving governance in LDCs in 2003-2005 were $1.3 billion while reported aid commitments for agricultural extension were only $12 million.

Aid for science, technology and innovation in poor countries is an essential component of aid, "which is not a handout, but a hand-up", UNCTAD says. "Shifting the focus there could lead to a radical break with past aid failures."

The report calls for a rapid increase in official development assistance for agricultural research and development in LDCs, "particularly to support a 'Green Revolution' in basic staple foods".

"Not only do donors need to strengthen national agricultural research and extension systems, they must also re-invest in the network of international agricultural research centres under the umbrella of the Consultative Group on International Agricultural Research [CGIAR]," the report recommends.

UNCTAD report

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