Asia-Pacific Regional Review of the Istanbul Programme of Action: Special session on harnessing science, technology, and innovation to support structural transformation and LDC graduation

Excellencies,
Distinguished Panelists,
Ladies and Gentlemen,

Fifty years after the creation of the LDC category, pioneered by UNCTAD, the international context of LDCs has changed beyond recognition as a consequence of globalization, the emergence of global value chains, technological innovation, climate change, pandemics, to name a few. Yet, many of the challenges that led to the creation of the LDC category in 1971 still linger today.

The specific challenges at the origin of the creation of the LDC category 50 years ago, which persist today, include undeveloped technological capacities. As the world accelerates the transition to the Fourth Industrial Revolution and the digital world, the technological and the digital gap between LDCs and other developing or developed countries is widening.

Reversing the economic and technological marginalization of LDCs requires a new generation of international support measures to support the development of these countries in the present decade. This is detailed in the forthcoming The Least Developed Countries Report 2021: The least developed countries in the post-COVID world: Learning from 50 years of experience.

In the field of science, technology and innovation, narrowing the gaps that separate LDCs from other countries requires decisive action by the international community to build and strengthen the technological capabilities of LDCs.

Allow me to briefly outline some of the measures and initiatives that the international community can take to assist LDCs catching up with technologically more advanced countries:

First, the international community is invited to adopt a new initiative to strengthen the innovative capacity of LDC enterprises. Policies and programmes to support LDC micro, small and medium-sized enterprises, also referred to as MSMEs, need to target the creation and expansion of viable growth-oriented companies that have the potential to innovate and are capable of withstanding local and international competition.

For that, they require technical assistance, financing, industrial and agricultural extension services, technological advice.  This also means clearly separating entrepreneurship policy from poverty alleviation measures or income support. Too often, MSME support measures are used as disguised income support for unviable companies.

Second, the international community should facilitate the sharing of knowledge and experience of Science, Technology, and Innovation policymaking between other countries and LDCs by means North-South, South-South and triangular cooperation. These different types of partnerships are complementary. Experiences of both successful and failed initiatives provide lessons that help strengthening such policymaking capacity of LDCs.

Third, development partners need to foster transfer of technology from home companies to LDC enterprises. This can include:

• Mainstreaming technology transfer in the design and implementation of investment promotion regimes for LDCs;
• Paying greater attention to voluntary and mandatory technology transfer measures in the context of sustainability standards, corporate social responsibility and responsible business conduct;
• Promoting the diffusion of open-source software and digital products; and
• Creating a unified framework for the voluntary sharing of green technologies specifications and related intellectual property information.

Fourth, LDC development partners should mainstream science, technology and innovation in infrastructure works they support — for instance through ODA or blended finance. The aim is to strengthen local capabilities of design, engineering, logistics, mechanics, planning, construction, and maintenance in areas of: transport, communications, energy, waterways, sanitation, to name a few.

Each project should have a component of purposeful capacity-building on the side of local LDC agents. They can support not only infrastructure works themselves, but also have broader spillover effects that entail technological diffusion throughout the wider productive structure.

Fifth, the international community should enhance technical assistance to LDCs to strengthen their policymakers’ capacity of making use of TRIPS flexibilities for the purposes of boosting these countries’ technological capabilities.

A few LDCs have cleverly used TRIPS exemptions to develop sophisticated industries like pharmaceuticals, which demonstrates that, these flexibilities can be part of successful industrial policy strategies when they are properly leveraged.

Sixth, there is a need to prolong the application of TRIPS flexibilities for LDCs. We welcome the recent WTO decision to extend the TRIPS transition period for LDCs until 2034, but we are of the view that these ISMs should be applied for as long as LDCs remain in the category, to help them building a viable technological base.

Moreover, development partners are invited to consider the extension of these flexibilities for several years beyond graduation. This is an element of smooth transition, which is one of the main focuses of attention of the international community now that the number of graduation cases is increasing. This is also a way of ensuring that graduating LDCs attain what UNCTAD terms “graduation with momentum”, which aims to ensure that the sustainable development process continues after graduation.

Ladies and gentlemen,

Assisting LDCs to narrow the technological gap with more advanced countries should be at the forefront of the new programme of action for the LDCs and should be placed at the core of strategies to build productive capacities to achieve structural transformation. These are the only ways to achieve graduation with momentum and UNCTAD stands ready to accompany LDCs in this path.   

Thank you