INTERNATIONAL FORUM ON THE ERADICATION OF POVERTY
SESSION 6A: BREAKING THE CYCLE OF POVERTY: CHALLENGES
THURSDAY, 16 NOVEMBER 2006
Almost half of the population of LDCs lives in extreme poverty. Extreme poverty, structural weaknesses of their economies, limited human, institutional, technical, trade and productive capacity, inadequate infrastructure, limited capacity to mobilize domestic and attract external resources, unsustainable external debt, high vulnerability to external economic shocks, natural disasters, and the prevalence of communicable and non-communicable diseases, including HIV/AIDS, malaria and tuberculosis are the major constraints in their development. High population growth, rapid urbanisation and environmental degradation further aggravate extreme poverty. Climate change is emerging as a new challenge for their sustainable development, in particular for those in Africa and the small island LDCs. Post-conflict LDCs face even greater challenges as they emerge from ashes of war and begin reconstruction.
The poverty trap is further tightened by the asymmetric nature of current globalization. Breaking the vicious cycle of poverty requires beneficial integration of LDCs into the world economy by improving their access to external finance, international markets, ICT and technology. It also requires building productive capacities of LDCs, promoting trade, investment and employment. Tapping latent entrepreneurship, traditional knowledge, hidden or underutilized resources, and strengthening the linkages between dynamically growing sectors with the rest of the economy while providing necessary skills and training are also indispensable for sustainable development of LDCs.
Creative industry offers new opportunities to many LDCs. According to UNCTAD, exports of recorded music discs and tapes from developed market economies to LDCs grew in nominal terms by 642 % or 10.5 % per annum while imports of developed market economies from LDCs rose by 321 % or 7.4 % by annum between 1980 and 2000. Many LDCs have already internationally recognized brand names and world-class musicians. However, lack of investments, competitive entrepreneurial and marketing shills and a digital divide prevents LDCs from transforming music industry into export-oriented business. Furthermore, nascent entertainment industry often suffers losses from piracy of intellectual property in the absence of effective national copyright regimes in LDCs.
Tourism has a also great economic potential to contribute to the reduction of poverty but despite rich assets (culture, art, music, natural landscapes, wildlife and climate, including World Heritage Sites) of LDCs the share of tourism in their economy remains negligible: only 2.6% of the world market share in terms of international tourist arrivals (ITAs) and of international tourism receipts (ITRs). Nonetheless, the growth in ITAs has been faster in LDCs (42.5 %) than in other the developing countries (30.8%) and in the world (15.8%) between 2001 and 2005. As for ITRs, there was 50.3% growth in LDCs as compared to 40.6% growth in the developing countries and 33.2% growth in the world between 2001 and 2004. Apart of constraints of general nature (political instability, insecurity and corruption) to promotion of tourism, LDCs have also a number of specific constraints: high proportion of economic leakages, outside the local economy; insufficient awareness among national and international financial authorities about the real potential of tourism; lack of coordination among various actors in the tourism development process; lack of coordination between the public institutions and private sector; lack commitment of the private sector.
The proposed event on “Breaking the Cycle of Poverty: Challenges and Opportunities for the LDCs” will address poverty as a multifaceted and multidimensional phenomenon, with a special focus on areas which offer opportunities for creating employment and driving economic growth in LDCs. It will include all major stakeholders in development process: representatives of governments, civil society and NGOs, academia and private sector, bilateral and multilateral donors.