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Geneva - The world's poorest countries need urgently to invest in infrastructure and other sectors that create jobs and not just rely on exports of raw materials to lift them out of poverty, the UN economic think-tank UNCTAD said on Wednesday.
The 49 "least developed countries" (LDCs) have to generate lots of new jobs to help ensure their rapidly growing working-age populations are a boon, not a threat, the United Nations agency said in a report.
Economists have been urging poor nations for decades to cut their reliance on commodity exports, with little success, but rapidly growing working-age populations and slowing economic growth since 2008 have added renewed urgency to their arguments.
"Economic growth which does not create decent jobs in sufficient quantities is unsustainable," UNCTAD secretary general Mukhisa Kituyi told a news conference.
Oil-rich LDCs such as Angola and Equatorial Guinea saw strong economic expansion in the global boom years from 2002 to 2008 but relied too heavily on energy exports, which failed to generate jobs, and now the growth has slowed, he said.
Kituyi described infrastructure as "a phenomenal lever (for job creation) that has not been adequately used".
The total LDC labour force is expected to expand by 30%, or 109 million people, in the decade up until 2020, the report said. By 2050 one in every four youths worldwide will live in one of the 49 LDC countries.
"Very frightening"
Taffere Tesfachew, UNCTAD's director for LDCs, described the demographic challenge as "very frightening".
"Whether these countries can create about 100 million jobs by the end of this decade is questionable," he said. "If not, what will they do with all those young people?"
Kituyi lauded Ethiopia as an example of an LDC that was on the right track, building 6,000 km of roads, 2,000 km of rail and hydropower projects including a $3.3 billion mega-dam.
"The whole country is a construction site. For the short term, that's a main driver of employment creation," he said.
But Tesfachew said Ethiopia also needed to ensure it did not simply nurture an appetite for imported consumer goods among its new middle class.
He cited Angola as an example of a country that had not handled its rapid economic growth wisely.
"We were shocked to learn that at the moment the most expensive city in the world is (the Angolan capital) Luanda... It's just ridiculous, it's out of control. The injection of this massive capital is distorting prices," he said.
"It should change focus by using the revenue from oil to develop sectors and activities that will reduce this heavy dependence on imports," said Tesfachew, noting that the former big coffee exporter now had to buy the commodity from abroad.
Another oil-exporting LDC, Equatorial Guinea, has a GDP per capita of $10 000, yet three quarters of its people live on little more than one dollar a day, Kituyi said.
He cited as a case of "misguided public investment" a 52-villa luxury resort built "for impression management as a prosperous destination for African heads of state" attending a 2011 African Union summit.
Human Rights Watch has said the resort cost $830m.
