Paul Akiwumi, director of UNCTAD’s work on least developed countries, shares the main message of the Least Developed Countries Report 2019, published on 19 November 2019.
“Aid dependency is such a big issue for least developed countries
because they cannot continuously be reliant on donor funding.
This is a big problem for them because what’s happening today
is that the donor funding is not being aligned directly with their national development plans.
It is important that that happens for two reasons. One reason is that the priorities of governments are in national development plans, while the donors have other priorities.
Donor aid should be to support structural transformation in countries. However, we’ve seen from our analysis that this particularly is not happening. The aid that is coming in is generally focused on the social sector of development. Very little aid is supporting the productive sector of development.
Secondly is that donors generally put their aid through countries in projects, not directly through their national development plans,
which causes an add-on effect. Government representatives are moving from government institutions to projects which are funded by donor agencies.