A panel of political leaders and United Nations advisors met today, in parallel with the 65th session of the Economic and Financial Committee, to discuss how to enhance international support for the world’s poorest countries. The meeting was held in preparation for the Fourth United Nations Conference on Least Developed Countries, which will take place in Turkey next year.
A keynote speech was given by H.E. Mr. Abul Maal Abdul Muhith, Minister of Finance, Bangladesh. Mr. Muhith reminded the assembly that the effect of the triple global crises in the economy, food and energy sectors had hit the poorest countries hard. These countries now face a great disadvantage, he said.
He also called for the international community to consider the creation of a new category of “vulnerable and fragile countries” to help support the world’s most geographically disadvantaged nations, including those disproportionately affected by climate change.
There are currently 49 countries classified as LDCs and these nations have been identified as those suffering most from profound structural impediments to growth and prevalence of acute poverty. While they are home to some 800 million people (about 12% of the world’s population), they account for just 2% of global wealth (world GDP) and 1% of global trade in goods.
Many of the LDCs are also Small Island Developing States also known as SIDS. Only two countries (Botswana and Cap Verde) have so far graduated from the category since its establishment in 1971.
Professor Patrick Guillaumont, Professor Emeritus, Université d’Auvergne (France) examined the possibility of LDC status becoming a “trap”. The paradox is that these countries often fear being “graduated” from the LDC category once their financial and social situations improve, he said. Nations in this category are entitled to benefits, such as trade preferences and other support so smooth transition can only occur if graduating is made beneficial, he concluded.
This sentiment was echoed by Mr. Pierre Encontre of the United Nations Conference on Trade and Development, Africa (UNCTAD). He detailed the practical steps that could be taken to ensure that graduating LDCs receive fair treatment. He urged the international community to imitate the European Union’s 2008 gesture, which allows LDCs to export goods into the EU without paying duty or being submitted to quotas.
Expanding special measures to graduating countries would be easy to do, he said, and have little to no negative economic impact for preference givers. “They are no threat, they weigh next to nothing economically,” he said.
The Minister of State for Foreign Affairs of the Maldives, H.E. Mr. Ahmed Naseem, provided an insight into a graduating country’s views on the transition process. He spoke of the small island paradox facing the Maldives: relative prosperity versus extreme vulnerability.
In addition, Mr. Naseem voiced concern about the threat posed to the Maldives by climate change. “The Maldives is too vulnerable to be graduated,” he said, calling for special measures to be put in place to protect Small Island developing Nations (SIDS) as they graduate from the LDC category. He pointed out that SIDS have neither the resources nor the experience to deal with globalization but their right to exist must be recognized by the international community.
The event was concluded by an address by Mr. Peter Thompson of the Commission for the European Union who emphasized the importance of trade and market access as ways to trigger economic growth. ‘The EU alone cannot provide for all partners,” he warned, pointing out that the EU is already implementing relaxed rules on imports and supporting debt relief as the biggest donor of aid towards LDCs. “We are doing everything we can to push our friends in the developed world towards action,” he concluded.