LDCs and Post-2015: A roundtable discussion with Ambassador Gyan Chandra Acharya
Under-Secretary General and High Representative- Ambassador Gyan Chandra Acharya, United Nations Least Developed Countries, Landlocked Developing Countries and Small Island Developing States (UN-OHRLLS)
International Coordinator (Nepal)- Dr Arjun Karki, LDC Watch International
Team Leader and Lead Policy Adviser- Melinda Bohanon, Post 2015 Team, UK Department for International Development (DFID)
Head of Programme Growth, Poverty and Inequality- Claire Melamed, Overseas Development Institute (ODI)
With the Open Working Group finalising its proposals on Sustainable Development Goals (SDGs) to be presented to the UN General Assembly in September this year, it is a good time to discuss how to ensure that a new global agenda to be put into effect post-2015 takes the challenges facing Least Developed Countries (LDCs) into account.
This roundtable brought together major players in the field, the ODI, UN-OHRLLS,UK DFID, LDC Watch, the LDC News Service, representatives from civil society organisations and other think tanks to discuss how to craft the post-2015 agenda in a way that works for LDCs. This has also to be put into the context of two programmes which directly impact on LDCs development: the Istanbul Programme of Action (IPoA) (2011-2020) and the Millennium Development Goals (2000-2015).
Background on Least Developed Countries
There are currently 48 Least Developed Countries, a group characterised by the high level of poverty across the population, the low level of economic activity – usually because countries’ economies are dependent on just one industry (often in the extractive sector) – and a high level of vulnerability, which makes it more difficult for them to withstand internal or external shocks.
The 2011 Istanbul LDCIV meeting’s IPoA, with its eight priority areas to spur LDC advancement, has resulted in growth and rising investment rates. However, progress has recently been hindered by the global economic downturn: bilateral ODA declined by nearly 13% and overall ODA by 4% in 2013.
As for the Millennium Development Goals, while they set eight goals for developing countries to work their way out of poverty, success is still judged by reaching the targets, rather than by how far countries have progressed. As LDCs start from such a low base (47% of the population live in poverty, compared to 23% in other developing countries), meeting the targets measured as relative change is in many cases a huge ask and failure to meet them can conceal significant progress in absolute terms.
Current major issues for LDCs
Two major issues for LDCs are climate change and trade. Climate change is emerging as the biggest threat to LDCs, as they are situated in the most vulnerable geographical regions. Even though their contribution to climate change is very low in terms of greenhouse gas (GHG) emissions, LDCs have experienced the most severe impacts from climate change, such as flooding, land degradation, glacier melt and coastal erosion. People in LDCs are five times more likely to die from climate-related disasters than those in the rest of the world.
In addition, as between 60% and 70% of the LDCs’ population depend on agriculture for their livelihood, severe drought or creeping desertification are national disasters, which can put a break on development for the entire country. While financial pledges were made in Copenhagen to help LDCs adapt to climate change, these have not been met and funds for adaptation fall far short of needs.
On the trade side LDCs are also in a weak position. The world’s two biggest trading partners are the EU and the US. In 2001 the EU agreed a tariff-free system: Everything But Arms (EBA) for LDCs, but as their share of global trade is just 1%, they cannot take full advantage of this. As for the US, the question of offering tariff-free access to LDCs is still ‘unfinished business’.
While a package on Duty Free Quota Free (DFQF) market access for LDCs was adopted at the 9th WTO Ministerial last year in Bali, developed countries only agreed to make this non-binding, and the agreement only included a commitment “to seek to improve” their DFQF coverage for LDC products. On the implementation of the services waiver in 2011 and the preferential rules of origin, all agreements were non-binding on the part of developed countries, while on the DFQF access for cotton by January 1 2015 a decision has been made to continue discussions, with no mandate to deliver a decision
Current progress in the Open Working Group negotiations on the SDGs
To date OWG discussions have been very broad, so work is now needed to sharpen up some of the targets proposed as well as their ‘means of implementation’. During negotiations there is always a danger that for some countries the priority will be to protect their national interests, so at present the OWG is going through a process of political negotiations, rather than looking at the end game.
A common theme is the need to develop strong north-south and south-south partnerships. Fifty percent of LDC trade is now with the south, and while India and China have agreed to lift trade barriers for 98% of LDC goods, the 2% not included is for agricultural goods and cotton, which make up most of LDC exports. The LDC-north trade is more beneficial for LDCs than south-south trade, because of the value of goods traded.
Financing for development is an important discussion topic, and more work is needed on indicators, particularly given the increasing effects that recurrent and multi-disasters have on LDCs.
Given their low income base, LDCs are more dependent on ODA than other developing countries. For example if 47% of the total population is below the poverty level, there is far less scope for domestic taxation. In the current OWG discussions it is suggested that 30% of ODA should go to LDCs post-2015; the LDCs want this increased to 50%. However they accept that they cannot depend on ODA alone to support growth indefinitely, so need help to build up income-generating activities to increase domestic finance from its current level of 14% to at least 20%,
LDCs and the G77
One element that has become evident in discussions is the divergence of opinions within the G77 between the emerging economies and the LDCs on issues such as the relationship between peace and development and development and partnerships. These issues are negotiated at meetings, where LDCs often find their voices ‘drowned out’ by the larger G77 countries. To counteract this, LDC negotiators have been advised to work in tandem with other LDC partners to get their points across.
There are also emerging common positions across G77 countries on economic global governance, good governance and the approach to development. This is a particularly thorny issue as a push to include targets related to governance at national level is often perceived by G77 members as an attempt by developed countries to impose their worldview, and infringe on national sovereignty. This is appearing to be slowly changing, with many countries starting to recognise that effective institutions at all levels are an important factor in the delivery of the goals.
What LDCs want from a post-2015 agenda
Two important elements that LDCs want included in the SDGs are building productive capacity and resilience across the board in the LDCs, and strengthening global partnerships. In the first case, LDCs have the potential to develop their technological capacity, and to apply this to the agriculture and health sectors, setting up science and technology agreements, provided they get the necessary support.
LDCs dependency on global partnerships (ODA, trade, investment, knowledge transfer) is higher than in other countries as they face some of the biggest challenges but have less national capacity to deal with them. It is also important to look at which home country measures will encourage investment and trade, to help LDCs to engage with the value chain, and broaden their industrial base. This is particularly relevant to LDCs where most of their income comes from the extractive industries.
In addition LDCs are pushing for a holistic approach that works on poverty eradication, inclusive, rapid economic growth and environmental sustainability, so that no one in any developing country is left behind, as equity within LDCs is fundamental to sustainable development.
While the MDGs brought many positive results, there is still much work to be done. To overcome this, the SDGs need to emphasise differential and preferential treatment for LDCs rather than a blanket-approach. One demand from LDC civil society organisations is to include a stand-alone goal targeting global development partnerships for the LDCs, as well as integrating and bolstering the IPoA.
Further suggestions for LDCs and Post-2015
It was also suggested that the priority, or ‘litmus test’ for the post-2015 agenda is to ensure it works best for the people in the poorest countries, so every goal and target must work for LDCs. To do so the SDGs should focus on:
· Pushing for economic growth and transformation – increasing value-added exports and ensuring LDCs are given support to transform from an agricultural-led to an industrial-led economy, and strengthen their national infrastructure.
· Including goal/target/indicators on resilience, whether in reacting to natural disasters or other events, like adaptation to climate change.
· Protecting natural assets and bio-diversity: oceans, land, forests, etc., which are perhaps most at risk from powerful interests.
· Specifying how to implement the goals, as this will help to “seal the deal” behind a set of strong targets. This includes:
- Looking at how ODA is channeled and to which countries.
- Looking at the global policy conditions for growth, which are important for LDCs’ financial stability and economic growth.
- Building LDCs’ capacity using technology transfer, research and development.
- Ensuring that the global commitment to a global partnership tilts towards LDCs.
- Considering how to apply the concept of Common But Differentiated Responsibilities (CBDR) in a way that works for the poorest countries in all areas.
The way forward for LDCs?
It was stressed that LDC development is important for all in an integrated world, both from a desire for a more just world and for the self-interest of developed countries. LDCs should not only be viewed from the viewpoint of development and poverty but also of political stability, as most LDCs are politically unstable, at war or in internal conflict, as a result of underdevelopment, hunger, economic weakness and insecurity. The effects of this instability spill over into developed countries in the form of increased refugees and regional instability. As the UN Secretary-General’s progress report on the two-year implementation of the IPoA says, (LDC development) “is not only a moral imperative but also a means to promote a stable and peaceful global order”.
There has been considerable debate about the quality, as well as the level of growth in LDCs. The IPoA set a growth target of 7%-8% per annum, which if achieved, could mean LDCs would double GDP within 10 years. However this must be inclusive growth that reaches those at the bottom of the income distribution so that all benefit, rather than making the small percentage of rich people in LDCs even richer.
On the positive front, speakers suggested that as many LDCs are in the early stages of development, they could leapfrog certain stages, and rather than focusing on ‘brown’ development, they could switch to a green economy. Many LDC advocates believe that green energy and a green economy are the way forward for LDCs, which needs ‘big push’ national action to empower local people and support them to generate green energy.
Speakers stressed that climate change is a survival issue for LDCs – the “elephant in the room that no one is prepared to talk about”. While the emphasis is on keeping temperature rises to 2°C, this is not enough, as it needs to be linked to helping LDCs to take adaptation measures. It was suggested that it would be clear after the climate negotiations in Peru, how far countries are prepared to go to agree stronger measures to prevent climate change and to support those most adversely affected.
The development of LDCs will “lift every boat in the sea”, said speakers. The Post-2015 Agenda provides the opportunity to keep LDCs at centre-stage, and is a “once-in a generation opportunity for transformational change”.
Major players – the UN-OHRLLS, the UK government, UK and LDC think tanks and civil society – discussed progress on the Istanbul Programme of Action for the LDCs for the Decade 2011-2020 (IPoA), which is scheduled a mid-term review in 2015, and linked it to the assessment of the MDGs and the post-2015 agenda.