Empowering Trade in the World's Least Developed Countries Through Technology

The Role of Technology in Transforming Trade for Least Developed Countries

Artificial intelligence and the adoption of frontier technologies are already reshaping global trade, creating new opportunities for economic growth and prosperity. These advancements have had a significant impact on developed economies and some developing nations, enabling more efficient digital exchanges, streamlined trade processes, and faster cross-border transactions through online platforms.

However, the benefits of these technological innovations are not evenly distributed. According to the United Nations Conference on Trade and Development (UNCTAD), developed economies currently account for roughly 74 percent of global trade. In contrast, the world's 44 Least Developed Countries (LDCs), home to an estimated 1.4 billion people, make up less than 1 percent of global merchandise trade. This disparity is exacerbated by increasing protectionist barriers, which continue to hinder the progress of LDCs.

Deodat Maharaj, Managing Director of the United Nations Technology Bank for the Least Developed Countries, highlights the challenges faced by these nations. UNCTAD estimates that tariffs on LDCs could lead to a potential 54 percent reduction in their exports, further deepening their economic struggles. With declining overseas development assistance, LDCs must find innovative ways to survive in this challenging trade environment.

Advocating for Fairer Trade and Embracing Digital Solutions

To overcome these obstacles, LDCs need to advocate for fairer trade terms on a global scale. At the same time, they must take proactive steps to address issues within their control. For example, many entrepreneurs in LDCs face exorbitant costs just to ship goods across borders—sometimes three times higher than their competitors. Technology offers a viable solution to reduce these costs and open up new markets.

At the Fourth International Conference on Financing for Development (FfD4) held in Sevilla in July 2025, one key message was clear: technology is no longer a luxury but a necessity for effective participation in global trade. The conference emphasized the importance of bridging infrastructure gaps, building domestic technological capacity, and leveraging science, technology, and innovation to unlock trade opportunities for LDCs.

Core Elements of an Action Agenda for LDCs

To leverage trade for job creation and economic growth, LDCs must focus on several key areas:

1. Adopting Digital Solutions
Digital solutions can significantly reduce trade costs and open up new markets. Paperless customs systems and single-window procedures have been shown to cut clearance times by up to 50 percent, reducing bureaucratic hurdles. In Benin, automating port procedures reduced processing time from 18 days to just three days. E-commerce platforms, when paired with secure payment systems and targeted training, also show great potential in boosting trade.

2. Investing in Digital Infrastructure
LDCs still have a long way to go in terms of digital infrastructure. To address this, development partners and international financial institutions should allocate a fixed percentage of resources—such as 15 percent of a country’s portfolio—to support digital infrastructure development.

3. Focusing on Value Addition
Reducing reliance on raw commodity exports requires building human resource capacity to drive innovation. Boosting investment in research and development (R&D) can yield substantial returns. However, LDCs currently invest less than 1 percent of GDP in R&D, compared to 4 percent in countries like the Republic of Korea.

4. Supporting SMEs and Tech-Driven Businesses
For LDCs to enter the technological age, businesses must lead the way. However, in countries like Burundi, where internet penetration is only 5 percent, this is a significant challenge. Alongside improving digital infrastructure, support must be provided to micro-, small, and medium-scale enterprises (MSMEs). This includes establishing incubators, enhancing technological capacities, and helping businesses promote themselves on digital platforms. Rwanda has been a pioneer in this area.

The Path Forward

While technology alone cannot solve all the challenges faced by LDCs, it can help level the playing field and drive meaningful transformation. It is crucial for the international community and development partners to back their commitments with tangible actions to support LDCs in advancing their agendas.

With 1.4 billion people in LDCs, these nations represent a vast and emerging market. When they succeed, the entire global economy stands to benefit. By embracing technology and taking strategic steps, LDCs can create jobs, foster innovation, and build a more inclusive and prosperous future for their populations.