High-level meeting address challenges of landlocked developing countries

2 October 2008

New York, 1 October 2008 --A United Nations high-level meeting in New York on 2 and 3 October is to consider concrete actions to be taken to promote better global partnerships to strengthen landlocked developing countries' (LLDCs) participation in international trade and the world economy, including measures and policies to encourage greater foreign direct investment (FDI).

The meeting will assess the progress and challenges in the implementation of the Almaty Programme of Action for Landlocked Developing Countries (LLDCs), since its adoption in 2003.

“While landlocked and transit developing countries, with the support of their development partners, have made great progress in implementing the specific actions contained in the Programme of Action over the past five years, the high cost of international trade continues to hinder their trade and economic development,” said Cheick Sidi Diarra, the UN High Representative for the Least Developed Countries, Landlocked Developing Countries and Small Island Developing States (UN-OHRLLS).

The gathering will address concrete measures to deal with transit problems, including inadequate infrastructure, trade imbalances, inefficient transport organization, and weak managerial, procedural, regulatory and institutional systems.

Foreign direct investment can help accelerate development and reduce poverty if LLDCs are able to attract investments on a greater scale to offset their geographical disadvantage and economic constraints, according to a recent study from the United Nations Conference on Trade and Development (UNCTAD).

Foreign direct investment flows have grown significantly since 2000, except for a brief slump in 2005. However, they remain low in absolute terms, the study said. From 2000 to 2007, FDI inflows to LLDCs more than tripled, from $3.9 billion to $14 billion, thus growing significantly faster than the combined FDI flows to all developing countries or to all least developed countries. Yet, the combined share of all LLDCs was only 0.8 per cent of global FDI in 2007.

Furthermore, a bigger share of FDI in LLDCs is concentrated in only a small number of countries. Five LLDCs account for about two-thirds of the LLDC total FDI flow, while 15 LLDCs, or half of all LLDCs, received less than 12 per cent.. Foreign direct investment seem to flow primarily to a few resource-rich and economically more advanced LLDCs, while inflows to LLDCs with small economies, few exploitable natural resources and low per capita income remained insignificant.

To maximize the impact of FDI, the high-level meeting will consider strategies to mitigate factors that make LLDCs unattractive for investment, on the one hand, and avoid excessive transaction costs and other landlocked-related impediments to international trade by attracting FDI to economic activities that are less sensitive to market distance, on the other.

The Almaty Programme of Action was adopted five years ago in Almaty, Kazakhstan, at the International Ministerial Conference of Landlocked and Transit Developing Countries, Donor Countries, International Financial and Development Institutions on Transit Transport Cooperation

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