Page last updated at 09:00 GMT, Monday, 23 February 2009

Poor need manufacturing, says UN

A child in a Nairobi slum in Kenya, file image
The UN says Africa suffers from the "happy peasant syndrome"

The world's poorest countries should move away from selling their natural resources and concentrate instead on manufacturing, a UN report says.

The document said selling raw materials leads to insecurity and does little to ease poverty for the "bottom billion" - those living on less than $1 a day.

The report praises Asian countries such as Malaysia for opening up its markets and developing manufacturing industry.

But the authors said much of Africa was still dependent on short-term aid.


Kandeh Yumkella, from the UN's Industrial Development Organization (Unido), which wrote the report, said Africa had been dogged for decades by the "happy peasant syndrome".

"We show a picture of this poor guy, with his wife and five children in a hut," he told Reuters.

"We've had this concept since the 1960s that we can change this guy, and it sells because people then give money.

"It's not the Asian model - they look at competitiveness, opening up markets and manufacturing."

Button town

The report's authors warn that excluding so many people from the world's prosperity leads to failed states and global insecurity.

And concentrating on raw materials such as oil or gold, they say, can take workers away from manufacturing and push up the price of goods.

But the report warned that poor nations need to choose carefully which products they make for export.

Rather than selling complete items like shirts, they should specialise in specific, smaller items to build expertise and increase market share.

The report cites the example of Qiaotou, a rice-growing town in eastern China that now produces almost two-thirds of the world's buttons.

The report says wealthy nations can help poor ones recreate this success by investing in their industries and allowing them access to world markets through trade preferences.

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