At Leather Wings, a small shoe-making outfit based in central Kathmandu, four women sit in a small room cutting up bright red cowhide imported from India. Next door a dozen of their colleagues stitch the shapes together on hand-powered sewing machines. The owner Samrat Dahal says the boots, designed by a German expat, sell via the Internet in India, China and Italy.
The company, founded in 1985, sums up some of the issues facing the Nepalese economy: entrepreneurial leaders at the helm of a committed workforce making a competitive and quality product for which there is ample overseas demand. The problem isn’t finding buyers; it’s scaling up production enough to meet that demand. Exports by the handful of players in Nepal’s shoe industry totalled only US$20 million in 2014.
Nepal, in turn, characterizes the problems facing many other LDCs (Least Developed Countries). At the risk of over-simplification, they just don’t produce enough.
The challenges of building productive capacity in LDCs like Nepal will be the main topic of discussion at this year’s plenary of the Committee for Development Policy (CDP)?on?14-18 March. The CDP report to the UN Economic and Social Council, to be finalized by the 24 experts at the plenary, will discuss the ingredients needed to boost production in LDCs to achieve the sustainable development goals (SDGs), improving productivity in a process that economists call ‘structural transformation’.
The report will argue that while some LDCs grew fast in recent decades, only a few managed to transform their economies. “Better access to foreign markets helped, but it wasn’t enough,” says CDP member Professor Diane Elson of Essex University.
For Leather Wings the bigger obstacles are finance, technology and the cost of inputs bought from abroad (Nepal has no tanning operation). Dahal would like to borrow enough money to invest in electric sewing machines. Mechanization would be more efficient and cut costs. But even basic technology is hard to come by, and banks are reluctant to lend.
LDCs need to tackle these issues and more, putting in place economic policies for growth as well as industrial policies that target and link specific sectors. “Ensuring that social outcomes match – and contribute to – economic progress means not only investing more in health and education, but also improving its quality and distribution,” says Elson. More investment is needed in social protection and governance.
Building sustainable production will be essential in achieving the 2030 Agenda. SDGs 8, 9, 10 and 17 relate directly to productive capacity.
Join CDP members Giovanni Andrea Cornia, Diane Elson, Stephan Klasen and Keith Nurse at a panel discussion on productive capacity and dynamic transformation for sustainable development from 1:15 pm to 2:45 pm EST on Wednesday 16 March in Conference room C. The event will be broadcast live via .
During the plenary, the CDP will also review its work on the LDCs and define its work programme from 2016-2018, when several more countries are expected to approach graduation from the category. As part of its role in providing independent advice to ECOSOC?on issues critical to the international development agenda, the penultimate day will feature a discussion on a proposed new categorization of aid known as Total Official Support for Sustainable Development, which for the first time considers private financial flows alongside government assistance.
From 1:15 pm – 2:15 pm on Tuesday 15 March CDP members José Antonio Alonso, José Antonio Ocampo and Keun Lee will conduct a Facebook chat about their , Global Governance and Rules for the Post-2015 Era. Join the discussion and to share comments and questions via Twitter, use #AskUNCDP.