While visiting Egypt recently after a pause of almost 3 years, I was able to verify that the title of this post also holds true not only for the Least Developed Countries (LDC’s).

”The least developed countries (LDCs) are a group of countries (presently 50 States) that have been officially identified by the United Nations as ”least developed” in the light of their low income, weak human assets, and high economic vulnerability.”

I have never been to a developing or transition country where positive development was so obvious than this time. The roads were better, boardwalks had been built where most streets never even had one, and, as much as that is possible in a country the surface of which is 97% sand, there was generally more green scattered all over the city in the form of trees or lawns.

Nevertheless, while development is visible and confirmed by locals, Egypt still drops in terms of global indicators.

It is fascinating and depressing at the same time to see that, even in the true LDC’s like the Democratic Republic of the Congo, just as poverty always has the same face everywhere, so has the “new richness”. There are plenty of twenty-somethings on Kinshasa’s streets driving their imported BMW or Mercedes to show off that they have made it. They all look the same, just as their cars.

You, when walking those streets, do not really want to know what they are making their money with. But the point is that this does show that growth is not everything if it does not reach those who are most in need. Just as trade or increased FDI (Foreign Direct Investment) does not automatically translate into growth, growth does not automatically lead to better living conditions for the poor. Look at Nigeria for another example.

By the way, the UNCTAD has recently released the Least Developed Countries Report, 2007, subtitled ”Knowledge, technical learning and innovation for development”. The full report can be downloaded here.

UNCTAD has often taken the view that the development of productive capacities and the creation of productive employment is a key to sustained poverty reduction in LDC’s. This year’s report supports this position. It focuses on the accumulation of knowledge, technological learning and the ability to innovate as salient steps on the way to developing genuine productive capacity.

For developing countries to suceed in a sustainable manner does not only require external measurable effects such as an increase in quantitative trade; it also requires good governance as an element that is highly difficult to influence and support from the outside.