I have now the pleasure of introducing the eighth annual progress Report of the Secretary-General on agenda item 56 (a) contained in document A/64/80-E/2009/79. 

As in previous reports, this year’s Report assesses progress in the implementation of the Programme of Action for the least developed countries for the decade 2001-2010 against 30 international goals and targets contained therein. In line with the General Assembly and ECOSOC resolution, the report highlights measures undertaken by LDCs and their development partners in support of the implementation of the Programme of Action and results achieved.  It also provides an update on the status of progress in the preparation for the Fourth United Nations Conference on LDCs.

Mr. Chairman,

This year’s report situates LDCs’ progress in the context of the ongoing global financial and economic crisis affecting the world economy. Coming on the heels of the food and energy crises, the global financial and economic crisis combined to present a major threat to the development of these vulnerable entities of the world community.

The Report identifies a number of channels through which the crisis is impacting LDCs, including direct and indirect. With regard to direct effects, the report notes that, apart from experiencing currency depreciation, LDCs were relatively insulated from the first round effects of the crisis owing to their limited integration into the global financial markets. Improved macroeconomic management in LDCs also contributed to limiting the initial effects of the crisis.

The LDCs, however, have suffered considerably from second round effects of the crisis arising from reduced investment, declining remittances, tourism receipts and falling exports.

Mr. Chairman,

The report argues that the impact of the collapse in world trade has been more pronounced in the Least Developed Countries owing to their high degree of openness as well as their specialization in primary commodities and low value-added labor-intensive manufacturing. The precipitous fall in commodity prices, coupled with the decline in demand for LDCs’ export has led to output contraction in several LDCs, with attendant negative impact on employment and government revenue. According to the report, real GDP growth for LDC as whole decelerated to 6.4 per cent in 2008, considerably down from 7.8 per cent in the previous year. Indeed, this was the first time in five years that GDP growth for the LDCs as a group fell below the 7.0 per cent target set by Programme of Action. Similarly, growth in per capita-income declined by nearly 2 per cent in 2008. This would push a large number of people into poverty.

This is compounded by the decline in migrant remittances which constitute an important source of income for poor households in a large number of LDCs. 

The report argues that LDCs could further be affected through reduction in official development assistance (ODA). Given their reliance on ODA for financing their development, including social infrastructure, a cut in ODA could have far-reaching adverse negative impact on LDCs’ development.

Prior to the crisis, LDCs have made noticeable progress towards good governance as well as in a number of MDG targets, notably universal primary education and gender equality. While several countries showed progress in reducing infant and under-five mortality, in a large number of LDCs, progress was negligible.  Furthermore, with substantial international support, many LDCs have been able to increase significantly the number of people receiving antiretroviral therapy (ART). The report notes, however, that HIV/AIDS is limiting progress in reducing under-five mortality in some countries.

The global financial and economic crisis thus threatens to derail progress towards internationally agreed development goals, including the Millennium Development Goals and the goals and targets of the Programme of Action for LDCs. Indeed, the number of people living in poverty is projected to increase as a result of the global financial and economic crisis.

Mr. Chairman,

The Programme of Action for the decade 2001-2010 constitutes a partnership between the least developed countries and their development partners. Regarding the support of the development partners towards the implementation of the PoA, the report commends donors’ efforts in the area of ODA and debt relief, which has freed resources for development and poverty reduction in LDCs. While this is welcome, the Report notes that ODA to LDC remains below the 0.15 per cent ODA/GNI target set by the BPOA, and many donors are off-track in meeting their aid pledges made at Gleneagles and other international fora.

Mr. Chairman,

With a year into the Programme of Action target date of 2010, it is clear that LDCs are unlikely to meet most of the goals and targets of the Programme of Action for LDCs for the decade 2001-2010. One of the key constraints to meeting the goals of the Programme of Action identified by the report is weak productive capacities, coupled with limited diversification. This limits LDC potential for sustained growth and poverty reduction. Thus, strengthening productive capacity development and diversifying economies is critical for sustained growth and poverty reduction.

Climate change is also an additional challenge for LDCs as it presents significant threats to the achievement of the Millennium Development Goals. Moreover, LDCs lack the resources to adapt to climate change.

This called for a renewed and strengthened partnership between the least developed countries and their development partners, which should be one of the priorities for the Fourth United Nations Conference on Least Developed Countries to be convened in 2011 as called for by the United Nations General Assembly resolution 63/227.

Mr. Chairman,

Regarding the state of preparations for the Fourth United Nations Conference on LDCs, the Report shows that tangible progress has been made in this regard.  A Concept Note and a roadmap have been prepared to facilitate the intergovernmental, regional and national preparations as well as to ensure the active involvement of all stakeholders in the preparatory process. The Concept Note spells out the organizational approach, mandates and specific activities to be undertaken in the preparation for the Conference at the country, regional and global levels. The Concept Note was launched at the first Inter-Agency Consultative Group meeting of United Nations organizations, agencies and other international organizations.

According to the report, steps have also been taken for national and regional-level preparations. Guidelines have been prepared to assist LDCs in the organization of national reviews, including the preparation of national reports.

In conclusion, Mr. Chairman,

The series of crises, including food, energy and now the global financial and economic crisis all underscore the vulnerability of LDCs to developments outside their borders. Against this backdrop, the report calls for strengthened support to the least developed countries in line with the principle of shared partnership underlying the Programme of Action for LDCs. 

More specifically, the report recommends the following measures:

1.     Increased financial transfers to least developed countries enable them to mitigate the impact of the global economic and financial crisis on their economies,

2.     Prioritizing agricultural development in order to lessen LDCs vulnerability to food crisis and ensuring food security.

3.     Strengthening productive capacities, prioritizing agricultural development and promoting economic diversification with the view of reducing LDCs’ vulnerability to external shocks and laying the foundation for sustained growth and poverty reduction.

I believe these and other elements should form important priorities of the next programme of action for the Least Developed Countries for the next decade.

I thank you for your attention.