Trade and Development Board, 69th executive session

The Least Developed Countries Report 2019: The Present and Future of External Development Finance – Old Dependence, New Challenges will be presented to the Trade and Development Board.

The new aid architecture presents a wider array of external finance sources to the least developed countries, but it results in more complexity and opacity for them. Moreover, this wider array is not translating into meaningful increases in development finance from all sources, but it leads to the expansion of the number of actors and instruments.

Critically, the linkages between external development finance and national development priorities are weakening. The limited State capacities of the least developed countries are further challenged by these developments.

In order to best manage their aid dependence and eventually escape it, the least developed countries need to take a more proactive role to ensure that external finance from all sources is directed to national development priorities, by implementing, among other things, a proposed “Aid Effectiveness Agenda 2.0”.