Uncertainty in Less Developed Countries in the Face of Crisis

Abstract

The global financial crisis that started in September 2007 with a rather limited problem in a market for non-tradeable goods (houses) challenged the way we have been thinking for decades about globalization, development and vulnerability. The crisis confronts social scientist, not just economist, with many issues that need reflection. This article concentrates on the developing and emerging economies in order to gain fresh insight into the challenges that the crisis poses to development strategies and policies. The crisis has serious social outfalls, slowing down the fight against poverty, sometimes increasing poverty, deteriorating income equality and reducing access of social service. This crisis also creates political conflict, generates new sets of priorities (both in the developed and developing economies) threaten food security and illuminates the need for better global governance frameworks. The role of the state as a leading actor in fostering economic growth and well-being has remained for some and emerged for others as a new paradigm. There is no „one -size-fit-all‟ strategy, but in this article, there are some proposals for development of LDCs. These countries still have some room to manoeuvre despite their loss of policy space.