February 2018

UN CALLS FOR KEEPING THE PROMISES TO THE WORLD'S POOREST

The Least Developed Countries will fall short of meeting the goals of the UN Sustainable Development targets unless the international community strengthens its support.

By Ramesh Jaura

            BERLIN | GENEVA (IDN) – The world’s 47 most-disadvantaged countries, also known as the least developed countries (LDCs), which are known to require special attention from the international community, will fall short of goals set up in the 2030 Agenda for Sustainable Development unless urgent action is taken, the UN Conference on Trade and Development (UNCTAD) has warned.

            A new analysis by the UNCTAD highlights that LDC growth averaged 5% in 2017 and will reach 5.4% in 2018, below the 7% growth envisaged by Target One of Sustainable Development Goal 8 on promoting sustained, inclusive and sustainable economic growth.

            In 2017, only five LDCs achieved economic growth of 7% or higher: Ethiopia at 8.5%, Nepal at 7.5%, Myanmar at 7.2%, Bangladesh at 7.1%, and Djibouti at 7 per cent.

            With this in view, Paul Akiwumi, Director of UNCTAD's Division for Africa, Least Developed Countries and Special Programmes, has called for the international community to "strengthen its support to LDCs in line with the commitment to leave no one behind."

            "With the global economic recovery remaining tepid, development partners face constraints in extending support to LDCs to help them meet the Sustainable Development Goals. Inequalities between the LDCs and other developing countries risk widening," he said.

            The UNCTAD analysis contends that too many LDCs remain dependent on primary commodity exports.

            While international prices for most primary commodity categories have trended upwards since late 2016, this modest recovery barely made a dent to the significant drop experienced since 2011, particularly in the cases of crude petroleum and minerals, ores and metals, the analysis notes.

            In 2017, LDCs as a group were projected to register a current account deficit of $50 billion, the second-highest deficit posted so far, at least in nominal terms. In contrast, non-LDC developing countries registered current account surpluses, so did developing countries as a whole and developed countries.

            Projections for 2018 suggest that the current account deficits of the LDCs would grow further, making worse possible balance-of-payments weaknesses.

            Only a handful of LDCs, according to estimates by the International Monetary Fund, recorded current account surpluses in 2017, including two recipients of relatively large amounts of aid – Afghanistan and South Sudan – as well as Eritrea and Guinea Bissau.

            All other LDCs recorded current account deficits of varying sizes, ranging from less than one percentage point of GDP – Bangladesh and Nepal – to more than 25% in the cases of Bhutan, Guinea, Liberia, Mozambique, and Tuvalu.

            Special foreign aid commitments for LDCs amounted to $43.2 billion, representing only an estimated 27% of net aid to all developing countries – a 0.5% increase in aid in real terms year-on-year.

            This trend supports fears of a levelling-off of aid to LDCs in the wake of the global recession. In 2016, only a handful of donor countries appear to have met the commitments under Target Two of Sustainable Development Goal 17.

            Denmark, Luxembourg, Norway, Sweden, and the United Kingdom provided more than 0.20% of their own gross national income to LDCs, while the Netherlands met the 0.15% threshold.

            "This analysis signals a clarion call for action," Akiwumi said. "The international community needs to pay increased attention to their commitments toward LDCs."

            The analysis was presented to UNCTAD member States at a meeting of its governing body in Geneva, Switzerland, on February 5.

            Among other trends highlighted in the analysis are:

- LDCs will not achieve the Sustainable Development Goals unless they speed up wholesale restructuring of their economies.

- The pace of LDCs structural transformation remains sluggish, with many of them falling short of the inclusive and sustainable industrialization envisaged in target 2 of Sustainable Development Goal 9 on building resilient infrastructure, promoting inclusive and sustainable industrialization and fostering innovation.

- Between 2006 and 2016 real manufacturing value added increased in nearly all LDCs although in most countries this was accompanied by a relative decline in the manufacturing share of total value added, pointing to a widespread risk of premature de-industrialization among LDCs.

- In 2016 LDCs accounted for barely 0.92% of global exports; roughly the same level as in 2007.

- LDCs' combined trade deficit has been widening significantly in the wake of the financial crisis, rising from $45 billion in 2009 to $98 billion in 2016, pointing to the association between the weak development of domestic productive capacities and structural deficits in the trade balance.

- Aid to LDCs remains far below the target of 0.15–0.20% of donor countries gross national income agreed in 1981.

- In 2016, only a handful of donor countries appear to have met the commitments under target 2 of Sustainable Development Goal 17.

- Denmark, Luxembourg, Norway, Sweden, and the United Kingdom provided more than 0.20% of their own gross national income to LDCs, while the Netherlands met the 0.15% threshold.

- Aid tends to be skewed towards a relatively small pool of LDCs, with the top-ten recipients – which often include countries affected by humanitarian emergencies and conflict – accounting for roughly half of total disbursements to the group.

- Recent data suggests that levels of external indebtedness have been surging across LDCs, both in terms of stocks (relative to gross national income), and – even more so – in terms of burden of debt services.

- Resources sent by individuals to LDCs as a group (remittances) totalled $36.9 billion in 2017, down by 2.6% compared to the peak of $37.9 billion in 2016.

- In absolute terms, the largest recipients of remittances among LDCs included Bangladesh ($13.6 billion in 2016), Nepal ($6.6 billion), Yemen ($3.4 billion), Haiti ($2.4 billion), Senegal ($2 billion) and Uganda ($1 billion).

- In 2016, remittances accounted for as much as 31% of GDP in Nepal, 29% in Haiti, 26% in Liberia, 22% in the Gambia, 21% in the Comoros, 15% in Lesotho, and they exceeded 10% of GDP in Senegal, Yemen, and Tuva. – Third World Network Features.

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About the author: Ramesh Jaura is Director-General and Editor-in-Chief of the International Press Syndicate as well as Executive President of the Global Cooperation Council. 

The above article is reproduced from IDN-InDepthNews, 7 February 2018.

When reproducing this feature, please credit Third World Network Features and (if applicable) the cooperating magazine or agency involved in the article, and give the byline. Please send us cuttings. And if reproduced on the internet, please send the web link where the article appears to twn@twnetwork.org.

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