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Poorest Promised New Deal, Yet Again

 InDepthNews 23 May 2019

While the prospect of halving poverty by 2015 as proclaimed by the United Nations at the turn of the millennium looks bleak, yet another UN conference has resolved to halve to 24 the number of world's poorest and most vulnerable nations -- known as the least developed countries (LDCs) - by 2021. (1703 Words) - By Johannes Reichert


In order to enable least developed countries - many of them in sub-Saharan Africa -- to move out of LDC category, the conference resolved to work out a smooth process of transitioning when countries attain the required social development benchmarks.

Since LDCs were established as a category in 1971, only three have "graduated". "Ironically, some, such as Equatorial Guinea, would rather maintain their LDC status to retain aid and trade privileges," said a UN media release on May 13, 2019.

LDCs are low-income states whose Gross National Income (GNI) per capita over three years averages less than 905 U.S. dollars, which must exceed $1,086 to leave the list. LDCs also suffer from human resource weakness, based on indicators of nutrition, health, education and adult literacy.

LDCs are characterised by economic vulnerability based on instability of agricultural production and of exports of goods and services, economic importance of non-traditional activities, and the percentage of population displaced by natural disasters.

The Istanbul plan of action asks 48 LDCs, with a total population of about 880 million people, to hold on to hope in the next ten years, expecting the developed and emerging countries as well as the private sector and international organizations to pave the way to lift them out of dire poverty. And this in particular through a significant increase in development aid and direct investments, favourable market access for all LDCs and building up their productive capacity.

"The productive capacity is mainly the basic infrastructure that is required as a prerequisite for any foreign direct investment or even domestic investment," said Cheick Sidi Diarra, UN undersecretary general and high representative for the Landlocked Developing Countries and Small Island Developing States at a news conference.

It includes energy, innovation and technology transfer and investing in agricultural productivity to boost food security and employment in LDCs. "The stress on productive capacity is favoured by LDCs as a means to modernize and diversify economies, create jobs and engage sustainable means to eventually eradicate poverty," added Diarra.

The growth has, however, been uneven among LDCs, and the resultant dividends in terms of improved living standards have not been substantial or sustained, according to Jhala Nath Khanal, the Prime Minister of Nepal, which currently holds the LDC presidency.

"The emphasis on productive capacity -- energy, infrastructure and agriculture -- marked the most significant difference from the last LDC action plan in Brussels, which concentrated on health, education and other social areas," says an analyst.

Diarra underlined the valuable role of the private sector in defeating poverty: "…but the private sector is not enough to bring wealth to the common men and women in the countries, particularly the LDCs. That's why this plan of action comes up with a balanced role between what the State has to do and what the private sector has to do."

The Istanbul conference from May 9 to 13, 2010 was the fourth in a series started in 1971 but the first UN gathering on LDCs with a private sector component, which included a trade fair aimed at enabling poorest countries' businesses to form networks with their developed-world counterparts. The other components were intergovernmental, parliamentary and civil society.


Despite much talk of the private sector boosting growth to alleviate poverty, the Istanbul conference left no doubt that foreign aid is of primary importance. "While the least developed countries have made considerable efforts to mobilise domestic resources for their development, most of them still face a huge financing gap," says the 46-page action programme, "and ODA (official development assistance) continued to be the largest source of external financing for [their] development."

Under the programme of action, affluent countries have committed to spending 0.15 per cent to 0.20 per cent of their national incomes on official development assistance (ODA). If implemented -- analysts very much doubt -- this would represent a significant increase on current levels of aid.

"If the world was unable to implement the Brussels plan during the good years, how will it be possible after financial chaos in the lean years ahead. It will be an enormously testing time for LDCs," said Barry Coates, executive director of Oxfam, New Zealand, who was attending the Istanbul conference.

The United States said ODA flows had increased from $12bn to $38bn between 2001 and 2008, "but delivery was modest compared to least developed countries' structural constraints, multiple vulnerabilities and needs".

The UN has voiced the hope that the Istanbul declaration will send an unequivocal message to donors for them to meet and exceed current aid targets. "There is a clear need for much more determined efforts by developed countries to fulfil and, where possible, enhance their ODA commitments to least developed countries," the UN said.

The conference said donor countries providing more than 0.20 percent of their GNP as official aid to LDCs should continue to do so and maximise their efforts to further increase aid levels. As for those donors who have met the 0.15 percent target, they should undertake to reach 0.20 percent "expeditiously".

It called on all other donor countries that have committed themselves to the 0.15 percent target to reaffirm their commitment and undertake to achieve the target by 2015 or to "make their best efforts to accelerate their endeavours to reach the target".


Oxfam's Coates was however sceptical that developed countries would pay much heed to what came out of Istanbul. "The LDCs are bearing the brunt of crises they did not cause -- from financial and food speculation, climate change and water scarcity," he said.

"It is deeply disappointing that the developed nations failed to agree anything tangible to prevent these crises and protect LDCs from the consequences, other than more of the promises to meet aid targets that they have broken repeatedly in the past 30 years. Unfortunately, the urging of countries to boost their aid is all too familiar. Broken promises are the norm," Coates added.

Dede Ahoefa Ekoue, Togo's minister for planning and development, liked the conference's emphasis on investment and the productive sectors. "Our minds now are on how to get private investment coming from outside ... We think that has the foundation to help us move on the economic front," she said.

"I heard many speakers in the plenary sessions talk about investing in LDCs, not just for the LDCs themselves but as a way of boosting all economies. That signals the way forward -- there are lot of under-exploited opportunities," she added.

As for aid levels, Ekoue said just as important was the quality of the aid and how it should be used to leverage investment and economic growth. While admitting the audacity of wanting to halve the number of LDCs, she said: "It will energise us and put pressure on us to move forward."

Achieving that goal will be a tall order, as the conference pointed out the lack of movement in the past decade. "While the Brussels programme of action has had a positive role to play in the development process of the least developed countries … the improved economic performance in some least developed countries had a limited impact on employment creation and poverty reduction. In many least developed countries structural transformation was very limited, and their vulnerability to external shocks has not been reduced."

The conference said progress has been made towards fulfilling commitments on duty-free, quota-free market access for products originating in LDCs, but other serious obstacles to trade remain, including non-tariff barriers that are inconsistent with World Trade Organisation rules and obligations.

In order to realize the objective, the action plan calls for the abolition or reduction of arbitrary or unjustified trade barriers, and the opening up of markets in wealthier countries to products from poorer nations.

Donor countries also committed to supporting programmes to improve the capacity of the youth through providing them with skills, jobs opportunities and health care. An estimated 70 per cent of LDCs' population are people under the age of 30, Diarra said, adding they had an "untapped potential" to give impetus to their countries' economic growth.

They made commitments to come up with special investment support regimes to encourage corporations in the developed world to invest in poorer countries. The incentives could include tax exemptions, assured market access and investment protection, Diarra said.

Developed countries also agreed to support national disaster reduction and mitigation programmes in LDCs, and to facilitate South-South transfer of "lessons learned" on disaster preparedness.

On their part, the LDCs and their development partners committed to ensuring good governance, rule of law, human rights, gender equality and women's empowerment and inclusive democratic principles.

The civil society forum's Istanbul declaration expressed "deep disappointment" at the conference outcomes. It said various analyses had pointed to flaws and shortcomings of the model of development promoted by dominant players in the international community. "Export-led growth has been inequitable and unsustainable, resulting in LDC commodity dependency, de-industrialisation, environmental damage and socio-economic marginalization," it says.

"These failures and the flawed paradigm have contributed to the growth in LDCs from 24 to 48, and graduation of only three LDCs over the last three decades. More than half the women and men in LDCs still live in abject poverty. There is widespread violation of human rights. Social justice and peace have remained a dream," the declaration notes, adding that this is unacceptable.

It pleads for changing the development paradigm and says: "Our calls echoed proposals for a New International Support Architecture, and gone further in calling for a more fundamental transformation of the relations between rich and poor, powerful and powerless, men and women, the elites and those without resources, the dominant and the marginalised. We have urged for this conference to mark a turning point towards a more just, more equitable and more sustainable world. We are deeply disappointed that the Istanbul Programme of Action has failed to meet these challenges."

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