Madhu Raman AcharyaExecutive Director, SACEPS

Countries with special needs in South AsiaCountry Afghanistan Bangladesh Bhutan Nepal

LDCs

LLDCs

Emerging from Conflict

Istanbul Programme of Action for the LDCs (2011-22)

ØFive goals

ØEight priorities

ØMore than 250 actions

Istanbul Programme of Action (2011-2020)FIVE GOALS

Sustain economic growth

Build human capacities

Reduce vulnerability,

enhance resilience

Enhance financial resources

Enhance good governance at all

levels

Istanbul Programme of Action (2011-2020)EIGHT PRIORITIES

Productive capacity

Agriculture, food security and rural

developmentTrade

Commodities Human and social development

Mobilization of financial resources

Multiple crises and other emerging challenges

Good governance at all levels

Quantitative targets� Enabling half of 48 LDCs to graduate by 2020;� 7 % economic growth - sustainable, equitable and

inclusive; � 100 % Internet access by 2020; � Allocating 10 per cent of the national budgets of

LDCs for agriculture; � doubling the share of LDC exports by 2020; � reducing by half -people without access to safe

drinking water by 2015; � ODA 0.15–0. 20 per cent of GNI

Qualitative targets � untying of aid/alignment to national priorities;� achieving sustainable levels of debts� reducing infant, under-five and maternal mortality

rates by 2020; � reversing the spread of HIV/AIDS and other diseases� increasing the primary energy supply per capita; � eradication of hunger; � universal access to free primary education, increasing

access to secondary and tertiary education; � Elimination of gender disparities;� full and effective participation of youth� Equal access of women and girls to education, basic

services etc.

Graduation Scenario� Only one South Asian country has graduated so far : the

Maldives (2011)- Botswana (1994), Cape Verde (2007)� Three criteria for graduation:� Economic criterion � Human asset index criterion � Economic vulnerability index criterion.

� South Asian LDCs unlikely to graduate by 2020 at current growth rate/ Bhutan – likely to meet only "income criterion”� Projected : Samoa (2014)/ Eligible - Kiribati, Tuvalu, Vanuatu,

Equatorial Guinea, Angola� Lack strategy for accelerated graduation for each country � Need smooth transition after graduation

Implementation/ Monitoring / Progress review

� Insufficient progress of implementation so far

� Absence of proper quantification of goals / many

remain aspirational

�Weak monitoring mechanism

� Methodology

� Development of indicators

� Creating a working group

Problems of IPoA� Ambitious

� Does not address structural causes of least

development : problem in previous decade

� Weak on structural transformation issues

� Accountability at all levels, in pledged support

Requisites for achieving IPoAØViability and competitiveness of productive capacityØJobs for growing number of young peopleØIncreasing agricultural productivity, revitalizing and diversifying –

key to food securityØReducing commodity dependence / diversification of exportsØGood governance (accountability at all levels)/ integrating the

IPOA in national plans and programmesØTargeted resilience programmes to- prevent external and internal

shocks (climate change/ disaster risk / economic slow down)ØMobilization of committed international support (decline in

ODA)/ reviewing aid effectiveness platform

Trade� Goal of doubling the global exports from LDCs by 2020� Requires robust trade facilitation � Capacity building in trade negotiations� Increasing capacity to utilize market concessions (EBA, GSP)� SAFTA Experience: LDC provisions� Provision of special and differential treatment � Fewer sensitive list items� Longer time frame to eliminate tariffs� Revenue Compensation Mechanism� Technical Assistance� Non-tariff barriers- most problems

Mobilization of financial resources� Only EU and Canada meeting 0.15% GNI target (lower rate)

on ODA

� ODA dropped by 8.9 per cent in real terms in 2011

� Reducing negative impact of the financial crisis on debt

sustainability

� Revive HIPC- Debt Initiative

� FDI declining: $26.4 billion in 2010 (20% below 2008)

LLDCs..

�18 of 31 LLDCs have per capita

GDP below $ 1000

�16 of 31 LLDCs are LDCs as well

�3 LLDCs in South Asia

LLDCs: Main ConstraintsØRemoteness/high transport costsØeast integrated (share of global trade below 1%)

Structural handicaps/ low growth rate/low GDPØNon-diversified exports/ commodity/ primary products/ØWeak competitivenessØHigh transaction costs (trade cost as much as 7 times higher)Ø Inhibitive transit procedures/ systemsØPoor infrastructure (transport, energy, communication)ØUnder development of domestic markets ØWeak human resources, technical and institutional capabilitiesØAdditional vulnerability to food security, climate change,

economic slowdown

Almaty programme of action

ØCreating win-win for both transit countries and

LLDCs

ØOverarching goal: Forging partnership for

developing efficient transit transport systems to

help LLDCs achieve developmental goals

Almaty Programme : Five Priority Areas.

Transit policy Infrastructure

Trade MeasuresInternational support

measures

Implementation and review

APoA Shortcomings

� Non-quantification of most goals

� Inability to address new vulnerabilities

� Weak monitoring and implementation

(mid-term review 2008)

LLDCS�Decade coming to end�Review conference in �Consultative process�New compact�Synergy with post-2015 development agenda

New programme LLDCs: PrioritiesØStrategic shift required/ multidimensional approachØpath of sustainable and inclusive economic growthØHarmonizing transit policiesØRegional transport agreementsØRobust trade facilitationØ Increasing productive capacityØBetter regional integrationØBuilding resilience to external shocksØ Investment in infrastructure/FDI- Investment Forum ØAsian Highway, SAARC Multimodal transportØMore support in aid, trade, debt, technologyØCapacity building- human, technical, institutional Ø Implementation and monitoring

Growth is not enough

� LDCs registered high growth : 7.1% (2002-08) � Slowed down after global economic crises� Growth not inclusive enough to achieve structural

transformation� Need inclusive, sustainable and resilient growth

strategy � Focus on structural causes of constraints, not

symptoms

Way forward� Implementation of global pacts IPoA, APoA� Synergy between review processes and post-2015 development agenda� Post-2015 development agenda should focus on LDCs, LLDCs� Support programmes for resilience against multiple crises (climate,

financial crisis, food and energy crisis etc)� Focus on capacity building� Support to regional integration� Better border infrastructure/ Investment in roads, railways, seaports,

communications� Speedier implementation of SAFTA provisions� South Asia connectivity blueprint� Enhanced role of larger developing countries� Greater accountability at all levels� Role of regional organizations and multilateral agencies

Regional economic integration with large developing economies� Increasing interdependence between LDCs and developing

countries (UNCTAD LDC Report 2011)� Intensification of economic and political ties� Developing countries absorbing more trade from LDCs and

sources of more FDI than the developed countries � South absorbed $ 69 billion from LDCs, while developed and

transition countries absorbed $ 59.5 billion (in 2009) � Two thirds of the $26 billion of workers’ remittances to the

LDCs originated in Southern countries in 2010� Need for a proactive and strategic approach to the integration

of LDCs with their developing countries in the region � “developmental regionalism”-UNCTAD

Role of regional and sub-regional organizations

� Partnership� Connectivity studies- implementation� Trade facilitation� Energy� Infrastructure� Resilience programmes� Support to SAARC LDC fund� Accelerated graduation strategy� Synergy on post-2015 development agenda