Emerging states should invest in world's poorest nations: UN
The UN trade and development body on Thursday urged developing countries to invest one percent of their $3.5 trillion foreign exchange reserves in the world's poorest countries.
In its 2011 Least Developed Countries report, the United Nations Conference on Trade and Development suggested that increased financial co-operation between the two groups was key as many industrialised countries freeze spending amid the public debt crisis.
The report said LDC economies grew by 5.7 percent in 2010, one percentage point higher than in 2009 but below the average of 7.1 percent seen during the boom period of 2002-2008.
The International Monetary Fund forecasts growth of about 5.8 percent over the next five years.
"This new proposal for increased South-South financial cooperation builds on the fact that using surplus financial resources from dynamic, emerging developing countries to fund development-oriented investment in LDCs can serve to build productive capacities, facilitate trade and support sustainable development," UNCTAD said in a statement.
"In addition to increasing access to financing for LDCs, such investments would provide sovereign wealth funds with an opportunity to further diversify their portfolios."
The report, subtitled "The Potential Role of South-South Cooperation for Inclusive and Sustainable Development", said large developing economies could also provide a market for LDC exports as the demand for products in industrialised countries subsides.
© 2011 AFP