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Poverty amidst Riches:

The Need for Change

United Nations New York, 2000

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FOREWORD

At its second session held from 3 to 7 April 2000, theCommittee for Development Policy, as requested by the

Economic and Social Council in its resolution 1999/67 of

16 December 1999, focused on three issues: the role of

information technology in development; an international

development strategy for 2001-2010; and the triennial review of

the list of least developed countries, based on the revised criteria

proposed by the Committee in 1999 for this purpose. Members

of the Committee agreed on a number of recommendations

intended to contribute to the discussion in the Council on these

issues and to allow the Council to decide on a revision of the list

of least developed countries.

The recent wave of technological change, particularly in

information technology, has opened new possibilities for

economic growth and for improvements in the quality of life inall regions of the world. To share the benefits of technological

development more justly is one of the major tasks for the

beginning of the new century. The Committee focused on the

needs of developing countries and on national and international

policies for reducing the inequalities in the distribution of

knowledge, information and information technology.

There has been some progress in accelerating economicgrowth and human development in recent decades, but there also

have been serious setbacks with devastating consequences for

poor countries. The targets of the international development

strategies have not been met. In considering the possibility of a

new international development strategy for 2001-2010, the

Committee recommends that a new strategy should be based on a

review of the successes and failures of previous development

strategies. The Committee emphasizes that a revitalized flow of

development finance from the developed countries, through

official channels as well as from private institutions, is necessary

in order to enhance economic performance and improve the

standard of living in developing countries, especially in the least

developed countries. Democratic processes of good governance

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in developing countries, as well as the openness of national

borders to flows of goods and services from all over the world,

are also among the critical preconditions for a peaceful and

prosperous world. More effective integration of the developingcountries into the global trading system is another major

challenge that has to be met to ensure equitable economic

development in the coming millennium. Increased access to and

improvement of education, skills and infrastructure are

increasingly needed to secure a higher level of development and

standard of living.

In its review of the list of least developed countries, theCommittee was particularly conscious of the need to ensure

credibility of the criteria used for this purpose. The Committee

therefore made special efforts to review the underlying concepts,

methodology and data in making its recommendations regarding

the countries to be included in the list of least developed

countries.

It is hoped that the analysis and recommendations of theCommittee contained in the present report will contribute to the

multilateral discussions of and solutions to the problems

addressed.

Nitin Desai

Under-Secretary-General for

Economic and Social Affairs

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PREFACE

The Committee for Development Policy is a high-leveladvisory body, established by the Economic and Social Council

in 1966 as the Committee for Development Planning and

renamed in 1998.a The Committee consists of 24 experts from

the fields of economic development, social development and

environmental protection. The members are appointed in their

personal capacity by the Council upon the nomination of the

Secretary-General of the United Nations. The current members,

who were appointed for the term starting on 1 January 1999 and

expiring on 31 December 2000, are:

Ms. Mria AUGUSZTINOVICS (Hungary): Institute of

Economics, Hungarian Academy of Sciences;

Ms. Maria Julia ALSOGARAY (Argentina);

Mr. Makhtar DIOUF (Senegal): Researcher, InstitutFondamental dAfrique Noire, Cheikh Anta Diop,

University of Dakar;

Mr. Essam EL-HINNAWI (Egypt): Research Professor,

Natural Resources and Environment, National

Research Centre, Cairo;

Mr. Just FAALAND (Norway): Member, The CHR

Michelsen Institute, Department of Social Science andDevelopment, Bergen (Chairman of the Committee);

Mr. Eugenio FIGUEROA (Chile): Professor of Economics

and Director, Center of Environmental and Natural

Resource Economics (CENRE), School of Economic

and Administrative Sciences, Universidad de Chile,

Santiago;

a See Economic and Social Council resolution 1998/46 of 31 July 1998.

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Mr. Albert FISHLOW (United States of America):

Professor, School of Management, Yale University,

and Senior Economist at Violy, Byorum and Partners,

New York;

Mr. GAO Shangquan (China): Chairman, China Society for

Economic Restructuring, Beijing;

Mr. Leonid M. GRIGORIEV (Russian Federation): Bureau

of Economic Analysis Foundation, Moscow;

Mr. Patrick GUILLAUMONT (France): Director, Centre

for Study and Research for InternationalDevelopment, Clermont-Ferrand;

Mr. Ryokichi HIRONO (Japan): Professor of Economics,

Teikyo University, Tokyo;

Mr. Taher KANAAN (Jordan): Consultant in Economics

and Business, Computer and Communications

Systems, Amman;Ms. Louka T. KATSELI (Greece): Professor of Economics,

Department of Economics, University of Athens,

Athens (Vice-Chairman of the Committee);

Mr. Nguyuru LIPUMBA (United Republic of Tanzania):

Dar es Salaam;

Ms. Solita C. MONSOD (Philippines): Professor ofEconomics, University of the Philippines, School of

Economics, Quezon City (Rapporteur of the

Committee);

Mr. P. Jayendra NAYAK (India): Chairman and Managing

Director, UTI Bank, Mumbai;

Ms. Mari Elka PANGESTU (Indonesia): Member, Board

of Directors, Centre for Strategic and InternationalStudies, Jakarta;

t Britainand Northern Ireland): Fellow of Selwyn College,

University of Cambridge, Cambridge;

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Mr. Eul Yong PARK, (Republic of Korea): Professor of

Economics, Handong University, Kyeongbuk;

Mr. Bishnodat PERSAUD (Guyana): Professor, University

of the West Indies and Economic Consultant, London;

Mr. Akilagpa SAWYERR (Ghana): Director of Research,

Association of African Universities, Accra-North;

Mr. Udo Ernst SIMONIS (Germany): Head, International

Institute for Environment and Society, Science Centre

Berlin, Berlin;

Mr. Ruben TANSINI (Uruguay): Director, Department of

Economics, University of Uruguay, Montevideo;

Mr. Miguel URRUTIA MONTOYA (Colombia):

Governor, Banco de la Republica, Santafe de Bogota

D.C.

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CONTENTS

Chapter Page

I. MAIN FINDINGS AND RECOMMENDATIONS ..................................... 1

A. The role of information technology

in development ........................................................... 1

B. Towards an international development strategy

for the first decade of the new millennium................. 2

C. Review of the list of least developed countries .......... 4

II. THE ROLE OF INFORMATION TECHNOLOGY

IN DEVELOPMENT......................................................................................6

A. Introduction ................................................................ 6

B. Potential benefits and risks ......................................... 6

C. Production and application of informationtechnology in the developing countries .................... 11

D. Prospects and policies for development.................... 12

III. TOWARDS AN INTERNATIONAL DEVELOPMENT STRATEGY

FOR THE FIRST DECADE OF THE NEW MILLENNIUM.................. 19

IV. REVIEW OF THE LIST OF LEAST DEVELOPED COUNTRIES.......24

A. Introduction .............................................................. 24

B.