UN official calls for economic diversification for Asia’s landlocked developing countries

5 November 2014 – Asia’s landlocked developing countries (LLDCs) need a stable investment-friendly and competitive macro-economic policy framework, the United Nations Economic and Social Commission for Asia and the Pacific (ESCAP) said Tuesday, calling for action to promote economic diversification in order to reduce volatility of economic and export growth.

“Policies must maintain a competitive exchange rate, neutralizing tendencies towards appreciation and a stable macroeconomic environment with favourable credit conditions for the promotion of new economic activities,” said Shamshad Akhtar, Executive Secretary of ESCAP, during the launch of the Economic Diversification in Asian LLDCs: Prospects and Challenge report at the Second UN Conference on LLDCs, which wraps up today in Vienna, Austria.

Ms. Akhtar underscored that ESCAP’s research revealed that the more diversified the economy, the higher it’s gross domestic product and the lower the competition it faces in global markets. Results in the new report show that diversification moves in short steps, rather than large jumps, and that diversification is a path-dependent process, so that what a country produces today influences what sectors can emerge or develop in the immediate future.

“Some pathways can lead to new products, further diversification and improvement in a country’s productive capacity, whilst other paths spin off relatively fewer opportunities, providing less potential for economic growth and diversification,” she explained.  Read More