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"In short, the 'least developed' condition has tended to generate 'less' development," even though most of the countries concerned had registered some economic growth, said the report by a group of nine "eminent persons."
A total of 48 nations, more than two-thirds of them in Africa, are classified by the United Nations as Least Developed Countries (LDCs). The rating is based on several criteria including per capita gross national income of less than $905.
The panel, headed by former Malian President Alpha Oumar Konare and former World Bank President James Wolfensohn, studied the impact of an action program on LDCs launched at a U.N. conference in Brussels in 2001 for the ensuing decade.
Its recommendations are to be considered by a new conference in Istanbul from May 9-13, which will adopt a new program for the next 10 years.
"We have come to the conclusion that despite some progress on the economic and social front, the gap between the LDCs and the rest of the world, including the low middle income countries, is widening," the 43-page report said.
It blamed this on poor education, health and nutrition, limited infrastructure, dependence on fragile agricultural sectors and a limited range of exports.
"Unless we address the structural weaknesses that make these countries 'least developed,' we will not reverse their increasing marginalization," which would lead to "a future that we, as a global community, cannot afford," the report said.
It said the average per capita income in the least developed countries had fallen from 18 per cent of the world average 40 years ago to 15 percent by 2008. The gap would widen in future if present trends continued, it said.
The panel said part of the responsibility for improving the situation lay with the LDCs themselves, which should negotiate better prices for their raw materials, fight corruption and seek the return of stolen assets.
But it also said foreign aid was a "fundamental ingredient." Donor countries should scale up their aid to the LDCs to 0.15 percent of their gross national income by 2013 and to 0.2 percent by 2015.
Among other goals should be to grant duty- and quota-free access for LDC exports, further reduce the countries' official bilateral and multilateral debt, and double their farm productivity and school enrollment .
The United Nations has already said it wants to halve the number of LDCs by 2021. Since 1970, only three countries have made it out of the group -- Botswana, Cape Verde and the Maldives.