My dear colleague Under-Secretary-General Ocampo,
I am happy
to take the floor following the introduction of the Report of
the Secretary-General. Yesterday in my remarks at the Investment
Promotion Forum, I had outlined the preparatory process for this
High-Level Segment of ECOSOC.
Let me take
this opportunity to recall that the theme for this segment was
proposed last year by the Secretary-General, based on his consultations
with Member States. In particular, the theme was put forward by
Benin, as leader of the Group of the LDCs. The theme also had
the support of the European Union, Congo and Japan. Two regional
commissions, the one for Asia and the Pacific and the one for
Western Asia, together with the Food and Agriculture Organization,
the World Food Programme and the International Fund for Agricultural
Development -- all expressed their support for the theme to be
dedicated to the LDCs. Such strong convergence of focus is very
extraordinary in the ECOSOC considerations of the theme for its
High-Level Segment marks a very important occasion. It coincides
with the third anniversary of the adoption of the Brussels Programme
of Action for LDCs, which laid down a partnership for development
emphasizing that effective poverty reduction in the LDCs needed
a more supportive international environment. We believe strongly
that the debates during this High-Level Segment will renew, promote
and galvanize support for the enormous development challenges
faced by the LDCs, through a more effective and determined implementation
of the seven commitments under the Brussels Programme.
As you are
all well aware, the living conditions in the LDCs are characterized
by severe, mass poverty with four out of five people living on
$1 a day, with the lowest per capita GDP, weak human assets and
high degree of economic vulnerability. Many of them are in conflict
situation or coming out of it - some others experience recurrent
natural disasters - all at a tremendous human and material cost.
We should also not lose sight that a big number of LDCs are also
landlocked or small islands. Starting from this point, the key
element for the implementation of the Brussels Programme, aimed
at reduction of poverty in these countries, is a combination of
availability of financial resources for investment and the creation
of an indispensable policy and regulatory environment, as fully
described in the Secretary-General's Report (E/2004/54).
the first three years of the millennium (2000-2002) the real GDP
of the LDCs as a group grew slightly faster than during the last
decade, there are significant differences among the LDCs, with
some performing very well and others very poorly. Even for those
LDCs performing well, the critical question is the sustainability
of recent positive growth trends, especially for non-oil commodity-exporting
LDCs. Many LDC economies are characterized by growth instability,
especially agriculture-dependent LDCs.
Over the period
2000-2002, only seven countries achieved the 7 percent growth
rate target set by the Brussels Programme. The annual average
growth rate of real GDP, in 22 Least Developed Countries was less
than half the target rate and it actually declined in 13 LDCs.
LDCs are caught
in a "poverty trap" where slow growth and low income
limit domestic savings, which, in turn, limit increases in investments
and economic growth for poverty eradication and the overall implementation
of the Brussels Programme and of the Millennium Development Goals.
remains daunting. If these current economic and social development
trends continue, the majority of LDCs may not be able to achieve
the Brussels goals by 2010, which would consequently impact negatively
on the achievement of the Millennium Goals by 2015.
keep up their domestic efforts to reform, to reorganize themselves,
with a view to creating an enabling policy and regulatory environment,
with improved efficiency, transparency and accountability in the
administration of public resources and expenditures, and facilitate
the emergence of an effective governance structure and a business-friendly
creation of an enabling environment requires mutually reinforcing
international relationships between the LDCs and their development
partners. The appropriate domestic policies regarding aid, investments
and trade, should be implemented in partnership with all stakeholders.
The international community is called upon to fulfill their commitments,
not only through increased and better quality development assistance,
but also through increased investment, debt relief and free and
In 2002, aggregate
net resource flows to the group increased 7% by reaching nearly
17 billion US$. However, the backbone of the increase of the total
ODA flows to LDCs was related to the substantial increase of ODA
to a handful of LDCs. In fact, only four countries accounted for
more than two thirds of the total ODA growth in 2002. These are:
Mozambique, Afghanistan, Democratic Republic of the Congo and
amount of ODA flows, the quality of ODA delivery has also a major
impact on ODA effectiveness. In this regard, substantial progress
has been made in the aid harmonization agenda. The alignment of
donor assistance and the simplification and harmonization of donor
requirements would go a long way to contribute to reducing the
transaction cost of development assistance and enhancing aid effectiveness.
Another major improvement in aid modality would require a medium
to long-term ODA commitment flow to LDCs, thus reducing the uncertainty
and unpredictability of fluctuating yearly allocation of ODA.
ODA is not,
however, a panacea for solving the root constraints to economic
and social development in the LDCs. Speedy and effective implementation
of the enhanced HIPC Initiative is urgently needed, combined with
bilateral debt cancellation. Distorting subsidies and high peak
tariffs in industrial countries should be eliminated so as to
allow LDCs' producers to compete on a fair ground at the international
level. Current preferential schemes in favour of LDCs are to be
lauded, but there is still room for improvement in terms of long-term
predictability, wider product coverage and more realistic rules
of origin to take into account the limited industrial capacity
and other supply-side constraints in LDCs.
Remittances and transfer from migrants to their country of origin
have become for a significant number of LDCs a major source of
resource flows. LDCs are encouraged to facilitate the transfer
of remittances through the formal financial system at reasonable
costs and fees. Policy incentives for channelling these resources
to productive sectors could provide an important contribution
to domestic efforts for growth and development.
cooperation has the potential to open up additional source of
resource flow for the LDCs. Such cooperation therefore needs to
be geared to give special attention to the specific needs of these
most vulnerable countries. Already a significant share of LDCs'
trade takes place with other developing countries. The share of
LDCs' exports to developing countries rose from 15% in 1989 to
34% in 2002, while the share of developing countries in LDCs'
imports increased from 32% to 56% in 2002. Thus, there is a potential
that both LDCs and the more advanced developing countries stand
to gain mutually from increased trade and investment linkages
between them. If developing countries were to halve the average
tariffs applied to each other, this would generate an additional
$15.5 billion in trade.
launch of a third round of negotiations for the Global System
of Trade Preferences (GSTP), which is expected to embrace a larger
number of developing countries than the existing parties, bears
great promise and LDCs are urged to benefit from this window of
opportunity and avoid further marginalization in international
have already gone by since the conclusion of the Third United
Nations Conference of the LDCs. I strongly hope that the Ministerial
Declaration, to be adopted at the end of this High-Level Segment,
will be truly action-oriented. Actions, big or small, that can
be set on the road to implementation right away, and no further
promises or reiteration of commitments, are what the LDCs need.