Statement at Preparatory meeting of the Special Body on Least Developed, Landlocked Developing and Pacific Island Developing Countries
Delivered by ESCAP Executive Secretary Shamshad Akhtar at the Preparatory Meeting of the Special Body on Least Developed, Landlocked Developing and Pacific Island Developing Countries on 3 August 2014 in Bangkok, Thailand.
Ladies and Gentlemen
The deliberations on and support for the Special Body on Least Developed (LDCs), Landlocked Developing (LLDCs) and Pacific Island Developing Countries (PIDCs) are an integral part of ESCAP’s work. Our regional commission is the only one that regularly features dialogue on this topic. Today we will be holistically addressing the development challenges faced by the most disadvantaged and vulnerable groups of countries in our region.
These groups of countries are critical to our regional development dialogue. Asia and the Pacific is home to 33 of the total 110 global SIDs, LDCs and LLDCs. They account for 9 per cent of our regional population, even though their share of regional GDP is only 3.5 per cent. The majority of their population (some 300 million people) live in our Asia-Pacific LDCs, which account for less than half of their combined GDP.
In shaping our policy responses for these groups of countries, we must recognize the significant diversity among and between them. They include, for instance:
- A set of highly vulnerable countries – (the SIDS) exposed to rising sea levels and the ravages of climate change;
- Landlocked economies with poor connectivity, and some economies with abundant natural resources as well as others with limited resource bases;
- Some countries whose agricultural prospects suffer from shortages or complexity of water resource management; and
- A range of small vulnerable economies surrounded by oceans or by rugged mountains, some with high population densities and others with large land masses.
There is also a great variation in their economic and social indicators. LLDCs such as Azerbaijan, Kazakhstan, and Turkmenistan boast per capita GDPs exceeding US$3000, some of the SIDs such as Papua New Guinea and the Solomon Islands report US$1100 per capita incomes, yet there are also economies within these three groups with per capita GDP of US$500 or less.
Poverty rates average 38.8 per cent in our LDCs , with 109 million people living in poverty, representing 14 per cent of the total poor in Asia and the Pacific. Most of the poor in our region actually live in our large middle income countries.
This extreme diversity combines with factors such as complex political situations and weak governance to severely complicate their path to development. This has often been compounded by the competing interests of a range of development partners, and limited development assistance, packaged with low capacities, which in turn has reduced aid effectiveness.
SIDS Exhibit Mixed Performance Amid a Multitude of Challenges
Growth in the Pacific islands has averaged 2.5 per cent over the past decade. High levels of unemployment and underemployment are also significant problems in the subregion. With the downturn in the global economy, lower commodity prices have impacted even the resource-rich economies of Papua New Guinea and the Solomon Islands, whose growth fell from 5.3 per cent in 2012 to 4 per cent last year. Prospects for growth have also been affected by their remoteness, high transport costs and threats from global climate change. Some island countries may even become uninhabitable as sea levels rise and ocean acidification intensifies. Migration away from land affected by climate change is also on the rise. In view of their high dependence on imported fossil fuel for energy generation, some Pacific SIDS are adopting renewable energy targets to enhance the greening of their economies and to reduce their chronic balance of payment challenges.
To support the Pacific SIDS, ESCAP has helped in the development of:
- National sustainable development strategies, assessments and other reports;
- A Pacific Regional Energy Data Repository, under the auspices of the Pacific community, which is now up and running in support of the UN Secretary-General’s Sustainable Energy for All initiative; and
- Capacity building.
Going forward, ESCAP plans to support the recommendations of the SAMOA Pathway, the draft Outcome Document for the Third International Conference on SIDS in September this year. Our focus will be to support transformational change through better (i) integration and implementation of the sustainable agenda in national development plans, (ii) subregional connectivity through support for maritime and ICT initiatives, and (iii) promotion of climate adaptation. Institutional strengthening and development of private partnerships will be critical for structuring and implementing our initiatives. We know that strong national and subregional governance will be central to the sustainable management of natural resources, including our critical ocean resources. Together our support will aim to promote competitiveness and diversification in the Pacific, maintain the resilience of the natural environment and address the growing inequalities among and between the Pacific SIDS.
Good Progress in LDCs but Challenges Remain
Average growth among our regional LDCs is expected to reach 5.6 per cent in 2014, and some have already achieved 7 per cent. Some obstacles to higher growth stem from structural impediments and high vulnerability to external shocks. A number of the LDCs are also landlocked or far-flung small islands, making economic growth and poverty reduction a daunting task.
ESCAP has been a strong partner with our LDCs. We have supported regional consensus-building and positioning of Asia-Pacific LDCs in key global forums, and our assistance has entailed:
- Technical support for the formulation of graduation strategies and financing approaches for the graduation gaps;
- Advice for policy coherence and implementation, based on case studies in 10 selected LDCs, which will be widely shared through regional workshops;
- Training, for the National Planning Commission of Nepal for instance, to develop tools for MDG-consistent macroeconomic planning; and
- Support for WTO accession processes, including for Afghanistan.
Going forward, ESCAP will:
- Enhance technical assistance to develop productive capacities and an LDC productive capacity index to monitor improvements;
- Analyse the potential for economic diversification and advise on sector- and commodity-specific policies;
- Examine avenues for financing the sustainable development agenda, supporting capacities for tax reforms and capital market development;
- Promote trade facilitation and paperless trade, in addition to strengthening cooperation mechanisms with other regional organizations for trade facilitation; and
- Develop statistical capacities in the LDCs for national level monitoring and accountability, which will be a subject we will hear more about in the course of the Commission session deliberations.
Uneven LLDC Performance in Difficult Internal and External Environment
Growth, mostly driven by resource-based activities, has been higher in some LLDCs, such as Mongolia, which grew in 2013 at 15.5 per cent, Bhutan at 8.4 per cent, and Turkmenistan at 8 per cent. The aggregate growth rate of LLDCs declined however, from 11.7 per cent in the pre-crisis period to 6.2 per cent in 2013, due to the on-going sluggishness of the world economy. Per capita incomes have remained low in several LLDCs, and weak connectivity and inadequate infrastructure have constrained growth potential. Trade competitiveness also suffers due to border delays, cumbersome customs procedures and higher transaction costs. Other challenges include lack of integrated approaches to trade and transport facilitation, and the need to eliminate physical and non-physical bottlenecks to transport.
As a committed partner to our LLDCs ESCAP has:
- Assisted technical work for Kyrgyzstan and Mongolia on priority routes as part of its programme on the Asian Highway, and for Bhutan, Lao PDR and Nepal on the Trans-Asian Railway;
- Developed a major new intergovernmental agreement on dry ports and a network of dry ports in the region including for Lao PDR and Nepal;
- Assisted policy dialogues for formulation of master plans for strengthening transport connectivity in South Asia; and
- Aided in the development of databases on transit agreements, to assist trade negotiations and trade facilitation.
Going forward, ESCAP will ensure that the voice of the Asia-Pacific LLDCs is heard at the Second UN Conference in Vienna in November, to decide on the next programme of action for the LLDCs, and that other consultations are held to reflect on forward-looking strategies to boost investment and trade. ESCAP will also support intergovernmental dialogues on:
- Appropriate and efficient infrastructure investments for energy connectivity and energy resources trading;
- Development and facilitation of trade, transit, and logistics;
- The UN Special Programme for the Economies of Central Asia’s (SPECA’s) work to improve economic integration and connectivity;
- Development of a pan-regional terrestrial fibre optic network, offering open access and mesh configuration; and
- Development of ICT infrastructure along connectivity paths under the region’s existing Asian Highways and Trans-Asian Railways.
Clearly we have our work cut out for us in supporting these countries – and we will be unable to achieve these goals without your support, both moral and financial.
Post 2015 Development Agenda
ESCAP has led a regional review of MDG progress and consultations on sustainable development among our LDCs, LLDCs and SIDS, which has offered insights on where we stand.
Generally, these groups of countries have lagged behind on MDG achievements. Notable is the relatively weak performance of many SIDS, though there has been some progress in primary school enrolment, gender parity in education, provision of safe drinking water and reduction in CO2 emissions per capita GDP. Reducing child and maternal mortality, as well as provision of reliable and clean energy services to scattered island populations has also been challenging. In the LDCs, income poverty has dropped in several countries, but widespread hunger, rising inequality and disparities are still of concern. All three groups, as a whole, are falling behind on improving maternal and child health, and the primary health care infrastructure is failing to meet the needs. Among LLDCs, such as Armenia, Azerbaijan, Kazakhstan, Lao PDR, Nepal and Turkmenistan, targets related to poverty reduction, primary enrolment, gender parity in education, and providing safe drinking water are likely to be met. Progress has been slow however, in providing basic sanitation.
Progress on Goal 8, which deals with global partnerships, has been most disappointing across the board. 2012 estimates indicate that flows to LDCs have fallen in real terms, and there will be further discussion on this in the panel discussion tomorrow. Similarly, duty-free and quota-free market access commitments for products originating in the LDCs remain unmet. Their share of overall exports has also not risen in terms of global trade, and Aid for Trade, designed to address supply-side limitations, has a weak record.
In conclusion, given the relatively weak progress, ESCAP will work to ensure that the unmet MDGs are carried forward into the SDGs that will no doubt target poverty, inequality, gender equality, employment, health, and education, while emphasizing support for access to energy services, sustainable cities, and sustainable use and protection of ecosystems. Broadly our support will concentrate on the promotion of inclusive and sustainable growth.
ESCAP will continue to support the Istanbul Programme of Action, the new programmes of action for the SIDS and LLDCs, and the emerging sustainable development agenda. Our ability to do so, however, depends on the support and commitment of our member States.
I wish the Special Body every success in its deliberations.