Distinguished experts and representatives from partner organizations,
Colleagues, ladies and gentlemen,
It is my pleasure to welcome you all to UNCTAD´s ad hoc expert meeting in anticipation of the mid-term review of implementation of the Brussels Programme of Action for the LDCs. First, I would like to thank you personally, Madame Chairperson, for agreeing to preside over the meeting, and to thank, through you, the Government of Austria for its kind financial support to our initiative. In the same context, I wish to express our gratitude to the Government of Norway, which also granted us financial support in this exercise. Both Austria and Norway have enabled us to organize what we saw as a desirable input to this important systemwide undertaking which, in keeping with our UN jargon, could be referred to as "Brussels + 5".
I do not think we should ever, in the UN system, take any "plus- five" exercise lightly, or as a routine task. Indeed, no matter how well or how poorly one may have done in implementing a global programme of action, one should always remember that the issues at stake are vitally important, and that a mid-term review is a necessary exercise of humility, to review, among other things, what could have been done better, and how the second half of the implementation period could be made an opportunity to come closer to the ultimate goals. We must not forget that the Brussels Programme of Action, which was adopted in 2001, was subsequent to the declaration of the Millennium Development Goals, as these had been agreed upon a year earlier in an effort to tackle poverty issues "across the board" -- that is to say, in all countries. As it followed the Millennium Declaration, the Brussels Programme of Action indeed had unusual political strength: the international community recognized it had a special duty, within the context of the global fight against poverty, to resolve answer the particular problems of those countries that, more than others, risk failing to escape poverty.
This ad hoc expert meeting is part of our initiative to contribute substantively, through empirical and analytical inputs, to the review process. We mobilized a team of national experts to examine the implementation of the Brussels Programme of Action at country level in a number of LDCs, with a view to drawing lessons for the Programme´s further implementation.
My aim, in these remarks, is not to go through details of the outcome of this work or deal with the issues in any depth. I will organize my remarks along the following lines: first, highlight some of the findings from our country studies; second, underline some aspects of the progress achieved by LDCs since the Brussels Conference in 2001; and third, outline our intended role in the continued implementation of the Brussels Programme of Action.
Our choice of country studies, Madame Chairperson, was useful insofar as it revealed important features in the economic specialization of LDCs, and therefore in their structural capacities to achieve durable socio-economic progress. We see continuing heavy dependence on agricultural exports in many LDCs, as illustrated by the case of Burkina Faso. We also see, although in a small number of countries, significant strengthening of the textile sector over the years, principally in Bangladesh, and to some extent in Nepal and a few other LDCs. A third and equally striking feature is the significant -- sometimes phenomenal -- rise of services in the export specialization of LDCs, primarily as a result of the development of international tourism.
Here I would like to cite two country cases that deserve special attention: in Uganda, the share of services in the structure of foreign exchange earnings grew from 2% to 30% in less than 20 years; in Ethiopia, the same share of services rose from 19% to 44% of total exports also in less than 20 years, essentially as a result of the success of air transport services and business services. These remarks could have been applicable to many other LDCs had we widened our empirical review to the entire LDC category. We see, for example, that the oil-exporting LDCs stand out in terms of economic growth, and that tourism-related growth, in a few small island LDCs, has induced levels of income per capita that point to the eventuality of graduation for these countries.
What is also striking, from our analysis of the factors that fuelled these various situations, is the fact that few success stories among LDCs can be directly explained by the impact of special treatment provisions for LDCs. Preferential market access in the textile and clothing sector seems to have been a determining factor of socio-economic progress in only very few LDCs, most of them in Asia (including Bangladesh and Nepal in our sample of countries).
My second set of remarks, Madame Chairperson, will relate to the progress achieved toward the development targets established at the Third UN Conference on the LDCs in 2001. As is usual in any examination of the performance of a group of countries with certain features in common, a great amount of diversity is observed. This makes any review of progress difficult. For example, you will observe that only a third of all LDCs since 2001 have achieved an investment ratio of at least 20% of GDP, which meets or nearly meets the Brussels target. Our first reaction to this could be one of disappointment. However, another look at the pattern of investment among LDCs will reveal that some countries where investment has been less capital-intensive and less impressive statistically have demonstrated genuine progress in terms of job creation and economic linkages. One example is found in the tourism industry, notably among small and medium-sized enterprises in this sector, which often has a more significant socio-economic impact than, say, the oil industry. In short, there has been more progress among LDCs than investment ratios tend to indicate.
There has also been some progress in terms of preferential market access to developed countries for LDC goods. Indeed the share of duty-free and quota-free imports from LDCs on the major markets has grown as a result of the implementation of several market access initiatives. We also remember the commitment made by WTO members in Hong Kong to provide such access to LDC goods "on a lasting basis". Whether this will enhance market access for LDC exporters essentially depends on whether some commodities and products that are important to these countries will be eligible to benefit from such initiatives. A related concern in several LDCs is about the continued existence of non-tariff barriers.
These issues, which have been analysed in depth by UNCTAD, underscore the difficulties in answering the question of progress toward development targets. This is why one is tempted to turn to another type of yardstick for measuring progress globally, and that is through the notion of progress toward graduation from LDC status. Some progress has indeed taken place since 2001, although this is the result of developments that may have little to do with the first five years of implementation of the Brussels Programme of Action. Three States, in 2004 and 2006, were earmarked for graduation and are expected to lose LDC status in 2008, 2010 and 2011. One of these countries, Cape Verde, is among the pilot cases we focused on in this exercise. Another four LDCs have just been identified as eligible for graduation from LDC status in 2013. Overall, it is important to note that, out of seven graduation cases, six countries are small island LDCs that have been considered for graduation on grounds of higher per capita income, although they are all regarded as economically highly vulnerable. This paradox has been much debated internationally, and constitutes a specific issue in the context of the question of progress among LDCs.
I turn now, Madame Chairperson, to the last topic for my remarks: the new focuses of UNCTAD´s work in the next five years of implementation of the Programme of Action.
First, we will cast more light on the effective impact of LDC status on countries within the category, to enable beneficiaries to have a sense of what they could do to take more advantage of the special consideration granted them. We will also do this in an effort to help member States to better understand and appreciate the actual or potential value of LDC treatment. At the same time we will, for some countries, highlight the scope for progress toward graduation thresholds, because this should ultimately constitute the aim of any LDC -- namely, converging with non-LDCs and being able to pursue development efforts without LDC treatment.
Second, we will sharpen our focus on enhancing productive capacities in LDCs, with particular reference to economic sectors of special importance to these countries, from organic agriculture to international trade in services, with special reference to "niche" market manufacturing, international tourism, and cultural industries. As you may know, beginning next year we will be producing the LDC Report on an annual basis. We will meet this challenge with a view to highlighting new avenues for re-specializing LDC economies, including innovative ways of using LDC treatment to achieve greater competitiveness and stronger supply capacities. Our technical cooperation with LDCs will of course facilitate this thrust.
This gives me an opportunity to reiterate the importance we attach to the Integrated Framework for Trade-related Technical Assistance to LDCs (IF), notably in its implementation dimension. Our involvement so far has largely focused on diagnostic work, in partnership with the other co-sponsors of the IF. We are now organizing our IF action toward direct advisory services to support implementation and training activities in recipient countries, in response to the identified needs, within the financial resources at our disposal.
This, Madame Chairperson, distinguished delegates, concludes my remarks. UNCTAD considers this meeting and the entire five-year review as an opportunity for self-evaluation by all stakeholders, including the UN system, toward better support to LDCs. I hope this ad hoc expert meeting will demonstrate transparency and candour, courage on lessons, and determination on the corrective action that ought to be taken to increase the value of the LDC category. I trust you will know, Madame, how to guide us in this endeavour, and I thank you again -- you personally and all the participants - for your kind involvement in support of our work.