H.E. Excellency Mr. Abdoulie Janneh, United Nations Under-Secretary General and Executive Secretary of the Economic Commission for Africa,

H.E. Excellency, Teshome Toga, Speaker of the People’s House of Representative, Federal Democratic Republic of Ethiopia

H.E. Excellency Ms. Rugwabiza, Deputy Director General, World Trade Organization,

Distinguished Ministers from African LDCs present here this morning,

Distinguished Participants,

Ladies and Gentleman,

 

It is my pleasure to present to this high level and ministerial session the global perspective on the implementation of the BPoA and priorities for the next development decade to be crafted in Istanbul, Turkey next year in the context of the Fourth United Nations Conference on LDCs.

 

 

Mr. Chairman,

 

In his inaugural address to the Third United Nations Conference on the Least Developed Countries in Brussels, on 14 May 2001, the former United Nations Secretary General, Mr. Kofi Annan urged world leaders “to ensure that the Third UN Conference, unlike its two previous predecessors marked a turning point in the lives of ordinary people in the poorest countries in the world”.

 

Mr. Chairman,

 

However, after ten years of the implementation of the Brussels Programme of Action for the LDCs for the decade 2001-2010, one cannot but come to the sad conclusion that overall progress towards the goals and targets of the Programme has been disappointing. In the words of the UN Secretary-General Ban Ki-moon, the Least Developed Countries still represent the epicenter of the development emergency. Their acute vulnerabilities have been particularly heightened by the confluence of the food, energy and the current global financial and economic crises.

 

Mr. Chairman,

 

Prior to the current global financial and economic crisis, LDCs showed improved economic performance, with real GDP growth averaging over 6 % per annum during the period of 2002-2007. Some LDCs reached or even surpassed the 7 per cent growth target set by the Third United Nations Conference on the Least Developed Countries. A large number of African LDCs shared in this growth surge. Per capita income growth also improved—averaging over 3.5 per cent per annum over the period 2002-2008. Strengthened macroeconomic management and improved governance partly contributed to this high economic growth. However, the large increase in growth has been due to the surge in commodity prices. This highlights the fragility of LDC growth to terms of trade shocks.

 

Mr. Chairman,

 

Despite improvement in economic growth, most LDCs remain far from per capita income thresh-hold of graduation, let alone meeting the other two criteria of human capital development and overcoming economic vulnerability. As a result, progress towards graduation out of the LDC category has been limited, with two countries graduating from the group since the adoption of the Programme of Action in 2001. Two other countries have been recommended for graduation by the Committee for Development Policy (CDP).

 

Gains have also been made on the human development front, with a number of LDCs making progress towards several MDG targets, including primary education and gender equality. Progress towards poverty reduction—an overarching goal of the Brussels Programme has been mixed. Although absolute poverty has gone up, extreme poverty has declined to 36% in the 2005-2007 period, with Asian LDCs recording much faster reduction. However, extreme poverty in Sub-Sahara Africa remains stubbornly high. The global financial and economic crisis is likely to erode some of the progress already made in reducing poverty.

 

With respect to hunger, until 2007, LDCs had experienced decline in malnutrition. However the problem is still pervasive in nearly one fifth of LDCs, and particularly acute among children under five years. The problem of hunger reflects decade-long neglect of agriculture in national and international development policies. The situation has become even more severe in the context of the food and global economic and financial crises. For example, the Food and Agriculture Organization of the United Nations (FAO) estimates that the number of chronically hungry people increased by 15 per cent in 2007 and 2008 on account of the global food and financial and economic crises.

 

Mr. Chairman,

 

LDCs have also sought to improve universal access to essential services through improving governance coupled with increased spending. As a result, provision of public services that depend on government spending have seen faster progress compared to services that depend mainly on household income. 

 

Progress in health-related MDG targets, most notably child and maternal mortality has been disappointing. Infant mortality remains high in LDCs, with half of all deaths among children under five in the world occurring in Sub-Saharan Africa (most of which are LDCs). There has been hardly any improvement in maternal mortality rates in African LDCs. Yet, support for rapid scale-up of proven interventions as well as critically needed investments in basic healthcare systems remains insufficient.

 

Mr. Chairperson,

 

Regarding domestic resource mobilization, LDCs have made considerable progress in generating resources for their development through reforming revenue collection institutions, broadening the tax base, improving the efficiency of tax administration as well as curbing corruption. As result, there has been an increase in savings ratios, with Asian LDCs experiencing faster increase in Gross Domestic Savings averaging around 23 per cent of GDP over the period 2002-2007 compared to 18 per cent for African LDCs. Hence, LDCs still face a huge financing gap that has to be filled through external resources if they are to have a realistic chance of meeting the MDGs and other internationally agreed development goals. 

 

Mr. Chairperson,

 

Let me now turn to the international dimension of the partnership as the BPoA constitutes a partnership between the least developed countries and their development partners. Relative to the previous decades, the international environment has been largely supportive of LDCs development for the large part of the current decade. FDI flows to the least developed countries increased noticeably during the decade, though they are concentrated in a few countries and sectors. Furthermore, debt relief through both Heavily Indebted Poor Country (HIPC) and Multilateral Debt Relief Initiatives has freed resources for development and poverty reduction. There has also been an increase in official development assistance (ODA) to the least developed countries.  

 

While this is welcome, ODA to LDC is below the 0.15-0.20 percent ODA/GNI target set by the Third United Nations Conference on LDCs, and many donors are off-track in meeting their aid pledges made at Gleneagles. Moreover, ODA flows have had a limited impact in terms of contributing to the development of productive capacities in LDCs since they have been directed disproportionately to social sectors.

 

In the area of trade, LDC’s exports increased considerably in the Golden period of 2002-2007, from U$44 billion in 2003 to U$100 billion in 2006 in value terms. The bulk of the increase in exports was due to sharp increase in commodity prices. The dependence of African LDCs on primary commodity is high compared to Asian LDCs, which have diversified into labour intensive manufacturing. This narrow export base makes LDCs extremely vulnerable to terms of trade of shocks.

 

Although there has been progress in preferential treatment granted to LDCs, stringent rules of origin make it difficult for LDCs to fully utilize preferences. There is a need to simplify rules of origin and expanding the product coverage for all the LDCs.

 

Moreover, the share of share LDC’s trade in global trade remains minuscule at 0.08 per cent. This is despite export-led policies coupled with economic liberalisation pursued by many LDCs. An important lesson here is that economic reforms and export-led growth policies alone, in the absence of productive capacity development and diversification, are not enough to facilitate integration into the world economy, let alone induce growth and development.

 

 Mr. Chairman,

 

We believe that if Istanbul is to mark a real turning point in the lives of ordinary people in the LDCs, it should prioritize the development of productive capacities. 

 

Mr. Chairman,

 

Let me now venture to propose some elements we consider essential for LDC development in the next decade. These priorities require focused action, political commitment from LDCs themselves, international community, including bilateral and multilateral donors, the United Nations system as well as the partners from the South.

 

First, LDCs need to redouble efforts to mobilize adequate financial resources for their development with the view to ultimately reduce their dependence on aid. However, in the immediate future external resources, including ODA will continue to play an important role in financing LDC development. In this regard, donors should increase their aid allocation to LDCs in line with the international commitment. In addition to setting proportional targets the option of setting progressive targets should be considered. ODA alone will not be adequate to meet LDC huge financing gap. Additional resources will be required, including FDI flows, debt relief, remittances as well as innovative sources of funding;

 

Second, focused attention must be brought to bear on development of agriculture sector. This called for reprioritizing agricultural development in national and international development policies. Progress on this front requires increased investment in agriculture, agribusiness and rural development to expand agricultural productivity and reduce hunger. Special support must be given to smallholders farmers in African LDCs to enable them access locally adapted seeds, fertilizers, animal feed and other inputs in order to increase agricultural production.

 

Third, given the large infrastructure deficits in many Least Developed Countries, there is a need for increased investment in infrastructure. Particular attention must be given to the development of energy. LDCs and their development partners need to launch a ‘New Deal’ for the energy sector aimed at building transformational generation and transmission facilities. Transport infrastructure is also important, especially connecting the Landlocked LDCs with their neighbors and the rest of the world. Development partners should also provide financial and technical support to the development of regional infrastructure such as road corridors, power pools etc;  

 

Fourth, there is also a need to encourage FDI into productive capacities in agriculture, manufacturing and services sectors through incentives and risk assumption by home country governments. In attracting FDI, LDCs need to focus on sector specific investment incentives to attract investment into new dynamic sectors with greater impact on employment creation and poverty reduction;

 

Lastly, in light of the adverse negative impact of climate change on the LDCs, Developed countries should support the least developed countries to adapt to climate change through providing adequate, predictable, sustainable financial resources to help them strengthen their resilience to climate change as called for in the Copenhagen Accord. Furthermore, climate change must be turned into an opportunity through a special ‘New Green Deal’, involving green aid, green investment, green trade and green technology.

 

All these priorities and LDCs’ interests should feature prominently in the intergovernmental preparatory process at the global level. In this regard, let me emphasize the importance of the outcome of this Africa Regional Preparatory meeting, which will an important input to the Fourth UN Conference in Turkey. The General Assembly decided to convene two intergovernmental preparatory meetings in January and April 2011 to finalise the draft outcome for the Conference. I would like to urge you to participate actively in these meetings to defend your priorities and interests.

 

Mr. Chairman,

 

In conclusion, we believe that the full implementation of these priorities by the Least Developed Countries and their development partners could go a long way in ensuring that Istanbul marks a real turning point in the lives of ordinary people in the most vulnerable countries of the world.

 

I thank you,