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Special high-level event: At UNCTAD XIII, solidarity urged in implementing favourable policies to help poorest countries ‘graduate’ from least-developed status

Doha, Qatar, (23 April 2012)

Placing the world’s 48 poorest countries on a path to more dynamic development and enabling half of them to meet the criteria for graduation from “least-developed” status by 2020 required global solidarity in implementing favourable trade policies for their exports, as well as programmes to help them increase agricultural productivity and diversity, speakers emphasized this afternoon during a special high-level event convened by the Thirteenth Ministerial Meeting of the United Nations Conference on Trade and Development (UNCTAD XIII) in Doha, Qatar.
Opening the ministerial-level panel discussion, Cheick Sidi Diarra, United Nations Under-Secretary-General and High Representative for the Least Developed Countries, Landlocked Developing Countries and Small Island Developing States, cautioned that those countries, which had been achieving steady growth for much of the past decade, had been hit hard by the economic and financial turmoil that had begun in 2008.  Due to their already fragile nature, they would continue to need assistance not only to withstand the fallout from the crisis, but also to implement an ambitious 10-year development strategy adopted by world leaders in 2011.
He went on to note that the status of the Programme of Action for the Least Developed Countries — widely referred to as the “Istanbul Programme of Action” after the Turkish capital where it was adopted nearly a year ago — was the focus of the high-level event, which featured the participation of senior Government officials from countries that had graduated from least-developed status, alongside representatives of traditional development partners.  In line with the action plan’s call for half the least developed countries escape poverty by 2020, the participants also discussed graduation and structural transformation.
Mr. Diarra said that, even though the agreement reached in Istanbul would be harder to achieve in a global economic environment characterized by restrictive trade policies and declining development assistance, least developed countries were pressing ahead with their end of the bargain, promoting transparency and good governance and re-focusing their long-term development strategies on education and building productive capacities.  In an “attractive departure from past practice”, they were also involving the private sector, civil society and other partners in their efforts to mainstream the targets set by the Istanbul Programme.
Yet, they needed their development partners to implement duty- and quota-free trade measures to help them enhance their entrepreneurial capacities, and diversify their economies as a hedge against future external shocks, he said.  As their economies strengthened, they would also need assurances that their partners would stand by their official development assistance (ODA) commitments.  Moreover, those approaching graduation would need targeted assistance to ensure that they could “sail through transition and exit successfully from the least-developed category”.  They must be assured that they could take advantage of strengthened productive capacity and would not become locked into structures that fostered low economic growth or reduced them to mere “sources of raw material”.
Mr. Diarra noted that, with such fears in mind, the General Assembly had established an ad hoc open-ended working group in 2011 to further study and strengthen the smooth transition process for graduating countries.  That panel had suggested, among other things, that least developed countries would need assistance in achieving sustained, equitable and inclusive economic growth, building human capacities and ensuring the effective use of resources.
In his remarks before the round-table discussion, UNCTAD Secretary-General Supachai Panitchpakdi hailed the Istanbul Programme of Action and its most “striking feature” — the call for building productive capacities in least developed countries.  He also emphasized the document’s call on stakeholders to do more to ensure that those countries diversified their economies.  Going forward, more must be done to assuage fears that graduating least developed countries “will then be left alone”.  Underlining the importance of addressing the notion that they would be worse off after graduation, he said UNCTAD would continue to press development partners to foster a system of economic governance that would be beneficial to least developed countries.  It would also help them build productive capacities, from human resources to vital infrastructure and regulatory institutions, he said.  Another key was scaling up international support mechanisms by improving their ability to take advantage of market opportunities, including through South-South cooperation.
Mr. Supachai said only three countries — Botswana, Cape Verde and Maldives — had graduated from least-developed status, while Equatorial Guinea, Samoa, Tuvalu, and Vanuatu were among the candidates for future promotion.  All those countries were either small island developing States or oil exporting countries, he noted.  Since the performance of small islands was entirely driven by the tourism sector or foreign direct investment (FDI), there was a reason for optimism about the chances for the goals of Istanbul to be met.
Panellists from least developed countries or those formerly classified as least developed included François Kanimba, Minister for Commerce and Industry of Rwanda; Mohamed Mijarul Quayes, Deputy Minister for Foreign Affairs of Bangladesh; Dorcas Makgato-Malesu, Minister for Trade and Industry of Botswana; José Luis Rocha, Secretary of State for Foreign Affairs of Cape Verde, and Roy M. Joy, Ambassador of Vanuatu to the European Union.
Representing developed-country partners were Paul Magnette, Minister for Development Cooperation of Belgium, and Selim Kuneralp, incoming Permanent Representative of Turkey to the World Trade Organization.
Mr. KANIMBA said Rwanda had the ambition to graduate from least-developed to middle-income status by 2020, following a plan instituted in 2001.  While that would not be an easy task, it had received strong support from the international community.  Reforms had attracted more investment and the country was committed to working even harder to achieve the dream, he said, adding that Rwanda had recently enjoyed annual growth of more than 8 per cent.  In the past five years, more than a million people had been pulled out of poverty in a trajectory that seemed sustainable and even likely to improve.  In reviews, the goal of 11 per cent annual growth had been set.
As a landlocked country, transportation infrastructure in the East African Community (EAC) was key, he stressed, calling on private sector participants to help mobilize investment for railways in the subregion.  Human-resource development was also critical and much funding had been set aside for education, particularly in technology.  That investment had already borne fruit in terms of entrepreneurship among youth, he said.  Rwanda was also ahead of schedule in achieving goals in social indicators such as health care.
Noting that the country’s vulnerabilities included domination by agriculture, sensitivity to climate change and a lack of ports, he said that, in response, the Government had developed diversification strategies monitored by an export council that included diverse ministers.  Value addition in traditional exports such as coffee and tea was being discussed with partners, and tourism had been a major driver of growth.  Investments were being made to maximize the sector’s potential.
Mr. QUAYES said his country’s 2021 vision included short-term and long-term goals, and it was, therefore, already on track with the Istanbul Programme of Action.  The challenge, however, was transforming global challenges into pathways to a collective global response,” he cautioned.  “It is, therefore, important to see if everyone is on the same page, particularly in view of diversions caused by newer challenges such as climate change, which is already affecting some countries.  Constant monitoring and correction of strategy was critical.  Underlining the importance of recognizing that development was a common challenge for all countries, he said that realization should beak down the “polarity” of donors and beneficiaries.  In addition, a measured response to regional partnerships must be developed.
Ms. MAKGATO-MALESU, noted that her country had been one of the first countries to graduate from the least-developed category.  Botswana had focused on agriculture and providing free education and health care through equitable management by the Government.  Good governance, selective investment and investment were important elements, she said, adding that mechanisms for effective stakeholder engagement with the private sector through stable institutions were also critical.  However, it was important to support countries that had graduated, she said, noting that Botswana felt alone after graduation, having lost much of the support it had previously enjoyed.
Mr. ROCHA, noting that his country had also graduated, remarked that Cape Verde was still a small island country, but remained firm in its desire to move forward.  There had been a determined agenda to diversify the economic base, he said, noting that most of the economy was based on services.  A commitment had been made to achieve as many Millennium Development Goals as possible.  However, partnerships were reinforced by taking advantage of synergies.  Support from Cape Verde’s partners had changed, and some had dropped out after its graduation.  There had, therefore, been a decline in support due to graduation and there had been no formal transition process.
Graduation was not just a point of arrival, but also a point of departure, he continued, advocating “soft transition measures”.  The economic vulnerabilities of graduated least developed countries must be evaluated individually and assistance must be provided according to performance indicators, not time frames.  Cape Verde had no regrets over having progressed to graduation, but it still suffered from vulnerabilities, and the transformations of the past could not be repeated in the future.  In addition, emerging crises must be confronted.  By facing such challenges, the country intended to achieve middle-income status.
Mr. JOY recalled that the Economic and Social Council had approved Vanuatu’s graduation but the General Assembly had rejected it in 1997, supporting a plea that the additional vulnerabilities of small island States be considered.  Much socio-economic progress had been made since that time.  Describing the complex graduation process that the country was undergoing, he said it was only normal that its progress would result in a change of status.  However, the country itself must manage the graduation process, he said.
Mr. MAGNETTE recalled that more than half of his country’s ODA benefitted least-developed countries, and that Belgium was Co-chair of the Informal Group of Friends of Least Developed Countries.  Graduating from least-developed status was a new start, not the “end of the story”, he said, stressing that graduating countries needed to continue moving forward.  Graduation must be followed by a stronger transition phase aimed at avoiding the abrupt end to aid.  The idea was to make transition as smooth and efficient as possible, he emphasized, noting that a General Assembly resolution on that matter could be adopted soon.
Graduating countries would require a different type of support as a middle-income country, he continued, adding that it would be necessary to provide them with the reassurance of adequate support during the transition.  Underlining that there was no “one-size-fits-all solution” to transitional aid, he said each graduating country should determine its own priorities, and identify long-term challenges.  Sufficient structural progress — a major requirement for sustainable development — must also be determined before graduation was considered.  Least developed countries should exploit fully all measures available to them as members of that category, he said, adding that United Nations institutions, including UNCTAD, should continue monitoring each country even after graduation.
Mr. KUNERALP said it was essential to maintain the momentum gained at the 2011 Fourth United Nations Conference on the Least Developed Countries in Istanbul.  The Programme of Action was a forward-looking document that reflected wide international political will to support least developed countries.  Turkey had announced a wide-reaching economic cooperation package of $200 million annually in the form of scholarships, trade support, technical cooperation and the sharing of experiences.  That country had also increased its ODA substantially in recent years.  Moreover, as a former aid-receiving country, Turkey was “very familiar” with those issues, he noted.  Triangular cooperation, including South-South cooperation, should help least developed countries meet their goals, he said, adding that, if new and existing players were ready to “join hands”, transaction costs would be reduced and aid would become more effective.
SOUNH MANIVONG, Director-General for Planning and Cooperation of the Lao People’s Democratic Republic said his country now stood at 93 per cent of the graduation framework, and was converging with the many more developed countries in its region.  Hopefully, if current progress continued, it would graduate before the end of the decade.  The Government was determined to pursue all possible efforts to achieve that goal, and UNCTAD was expected to play a major role in a planned national meeting on ways to meet it.
Mr. ROCHA, asked whether there were “mixed feelings” about his country’s graduation said it had given the country good visibility and greater opportunities.  While it also posed a challenge, there were ways to minimize the risks associated with graduation.  For example, Cape Verde had a wealth-production strategy in place and was developing its management and leadership capacities while also modernizing its infrastructure.
Ms. MAKGATO-MALESU, asked whether the classification “low-income” or “least developed country” mattered to investors, said graduation should not be like “drinking a lot of cheap wine and waking up tomorrow with a headache”.  No one wanted to go backwards, and instead they should be prepared to move forward, she said.  The classification mattered to those who lent money to any particular country, but was perhaps not a “must have” in terms of investment.
Mr. KANIMBA, asked to describe his country’s future road to graduation, said there were several key areas through which Rwanda would work to sustain its present growth levels.  They included pursuing the transformation strategy for the agricultural sector, better addressing the infrastructure gap and galvanizing both local investment and FDI.
Mr. QUAYES, asked about his country’s “vibrant” industrial sector — something most least developed countries lacked — and how the Government approached the road to graduation, said that, apart from maintaining its industry, Bangladesh aimed to invest in women, develop regional connectivity and improve health care.  Graduation was regarded as a “commencement” of national status as a middle-income country, he said.
Mr. JOY, responding to a question about graduation in the particular context of a small island State, agreed that Vanuatu was challenged by its isolation, its small size and vulnerability to climate change.  Its people needed to embrace those challenges and make a strong commitment to overcoming them.  However, it still needed international support during its transition.
Taking the floor on behalf of the Coordinator of the Group of Least Developed Countries, the representative of Nepal said that, while graduation goals were welcome, they continued to pose a major challenge.  Several elements were essential, including measurable indicators, periodic assessments and a new international development architecture to coordinate all forms of aid.
The representative of Ethiopia said his country had recorded double-digit growth for the last eight years, and its new medium-term plan for growth aimed for graduation to middle-income status by 2020-2025.  He asked the panellists how best to harness the financial and technical support of its partners.
Mr. QUAYES, responding to that “million dollar question”, said national strategies must reflect a country’s individual situation.
Ms. MAKGATO-MALESU said countries should package what they hoped to achieve and highlight their commitment to those goals in order to draw sustained investment.

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