Impact of COVID-19 on Landlocked Developing Countries (LLDCs) and implications for resilient recovery

BACKGROUND

Landlocked Developing Countries (LLDCs) lack direct access to seaports, trade through multiple border crossings and typically face high-cost administrative, transit and border procedures. This makes the LLDCs to be particularly vulnerable to cross-border restrictions and border closures, given their dependency on transit transport to access international markets. LLDCs are also characterized by structural vulnerabilities, including, undiversified economies, weak public health services, low productive capacities, inadequate transport and digital connectivity, and limited resources to mitigate the spread and impact of COVID-19.

ORGANISERS

The briefing is organized by Chair of LLDCs, Kazakhstan and UN-OHRLLS.

INTRODUCTION

Landlocked Developing Countries (LLDCs) face unique challenges in achieving their development goals including remoteness to international markets, long distances from the seaports and transit problems, reliance on transit neighbouring countries for international trade, high trade costs, high dependence on international trade and in particular, on commodities amongst other challenges.

Given their geographical location, heavy reliance on international trade and fragile economic and social structures, the COVID-19 pandemic and its fallout are having unprecedented impact on LLDCs. LLDCs are seriously affected, with impacts ranging from disruptions in global supply chains and smooth functioning of borders, to reduced economic growth due to reduced trade, amongst others. The latest report of UNDESA, the World Economic Situation and Prospects reports that in 2020 the world economy shrank by 4.3 per cent, over two and a half times more than during the global financial crisis of 2009. LLDC economies are estimated to have contracted on average by 2.4 per cent in 2020.

Due to LLDCs geographical location and their reliance on transit countries for exports and import of goods, restrictive measures at LLDC and transit country borders aimed at curtailing the spread of COVID-19 have greatly affected the movement of goods and services to and from LLDCs. During normal circumstances, LLDCs face higher costs and travel times in the movement of goods and services and the impact of the pandemic has been further exacerbated by these challenges leading to even higher trade costs.

About 80 per cent of LLDCs are dependent on primary commodities for more than 60 per cent of their exports. The contraction of the demand for commodities in main export markets along with supply challenges because of disruptions to logistics networks have adversely affected the exports of these countries. This drop in exports led to a collapse in some commodity prices and this has resulted in relatively huge loss of foreign exchange earnings and which has serious consequences on socio-economic development including debt sustainability. The immediate repercussions for LLDCs include reduced fiscal space for overall government expenditure, especially healthcare, sourcing of essential medical and food supplies and providing social safety nets to the most vulnerable.

These challenges may have severe negative impacts for the progress of post-COVID-19 recovery and resilience building efforts of the LLDCs.

Given the importance of international trade to LLDCs, addressing trade related challenges faced by LLDCs and building their trade capacities is fundamental for mitigating the impact of the pandemic and in building back better post-COVID-19. The Aid for Trade support to LLDCs is therefore fundamental to addressing the impact of COVID-19 and in supporting their post- COVID-19 recovery efforts.

OBJECTIVE

The main aim of the meeting is to discuss the impact of COVID-19 pandemic on LLDCs, identify the specific challenges faced by LLDCs in responding to the COVID-19 pandemic and make recommendations for resilient recovery. The meeting will make recommendations on key areas to be prioritised for Aid-for-Trade financing to support recovery and foster resilience in LLDCs.

FORMAT

The meeting will feature panel presentations by panellists representing LLDCs Members States, different stakeholders including representatives from UN and other international organizations. The panel presentations will be followed by sharing of experiences by LLDCs and interactive dialogue with members of the audience.

ORGANISERS

The meeting is organized by Kazakhstan Chair of Group of LLDCs and UN-OHRLLS in close collaboration with the WTO.

OUTCOME

An official summary of the discussions will be issued as an outcome of the session and contribute to the report of the Aid for Trade Stocktaking event.

REGISTRATION

Registration is required to attend the meeting. Register HERE.

DRAFT PROGRAMME

Opening remarks:

• Ms. Fekitamoeloa Katoa ‘Utoikamanu – High Representative for the Least Developed Countries, Landlocked Developing Countries and Small Island Developing States (UN-OHRLLS)

• H.E. Ms. Zhanar Aitzhanova, Permanent Representation of Kazakhstan to the UNOG in Geneva and WTO, and Global Chair Group of LLDCs

Key note speakers:

• Honourable Ms. Peggy Onkutlwile Serame, Minister of Investment, Trade and Industry, Botswana
• Honorable Mr. Lekhraj Bhatta, Minister for Industry, Commerce and Supplies, Nepal

Panellists:

• Dr. Kunio Mikuriya, Secretary General, WCO

• Dr. Yonov Frederick Agah, Deputy Director-General, WTO

• Mr. Paul Akiwumi, Director of the Division for Africa, Least Developed Countries and Special Programme, UNCTAD   

• Ms. Elisabeth Tuerk, Director, Economic Cooperation and Trade, UNECE

• Ms. Susan Stone, Head of Division Emerging Policy Issues, Trade and Agriculture Directorate, OECD

Sharing of experiences by Member States and Interactive discussion

Closing remarks: Mr Purevsuren Lundeg, Ambassador, Extraordinary and Plenipotentiary Permanent Representative of Mongolia and Coordinator of Group of LLDCs in Geneva