United Nation (UN) in 1981, during the first UN conference on LDCs started an initiation called the Programme of Action (PoA) with an objective of helping the Least Developed Countries (LDC) to achieve sustained growth and development. The marginalization of the LDCs from the global economy pushed for the establishment of a decade-long PoA. The first UN conference on LDCs was held in Paris in 1981 which gave rise to the “Sustainable New Programme of Actions for LDCs”. The overarching idea of the Programme of Action was to help transform the LDC economies, improve the standard of living and to create job opportunities. Ever since the first PoA, four other PoAs have been initiated, with the second held again in Paris, third in Brussels, fourth in Istanbul and the fifth in Doha.
“The Paris Declaration and the Programme of Action for the LDCs” was the second PoA started in 1990 for a decade long period till 2000. The program addressed the socio-economic progress made during the decade of “Sustainable New Programme of Action” along with the plans and priorities for the upcoming decade. The priority areas for the second PoA was to enhance macroeconomic policy, human resources development, reversing the environmental degradation trends, rural development, food production and the development of a diversified productive sector. The third PoA was the “Brussels Programme of Action” for the decade 2001-2010. The priority areas of the Brussels PoA were to help LDCs achieve sustainable development, eradicating poverty, inequality, and deprivation. Likewise, the fourth PoA was the Istanbul Programme of Action (IPoA). IPoA was started during the Fourth UN Conference on LDC held in Istanbul, Turkey in 2011. The IPoA for the decade of 2011-2020, largely focused on the structural transformation of LDCs by increasing the productive capacity and to tackle new developmental challenges, including climate change, productive employment, eradicating poverty and overcoming economic crises, among others. The overarching idea was to decrease the number of LDCs by half by 2020 and achieve economic growth of at least 7 percent annually.
Likewise, the Fifth United Nations Conference of the Least Developed Countries scheduled in January 2021 discussed the progress and problems of the LDCs over the decade and have initiated the Doha Programme of Action (DPOA) for the next 10-year. The DPOA’s core priority is to work for eradicating poverty, fostering science, technology and innovation as well as addressing climate change and recovering from COVID-19.
As the IPoA ended in 2020, it was evident that there has been notable progress on several key facets of developmental planning. But it is also prominent that the LDCs have failed to meet the initial targets of the IPoA. Only three countries have graduated since 2011 and four more are expected to graduate by the end of 2024. The target of reducing the LDC by half has been hardly met as only 15 LDCs have been successful in meeting the graduation thresholds. The total number of LDCs was 49 when the IPoA started in 2011.
Between 2011-2019, the average growth rate of LDCs stood at 4.4 percent which is much lower than the earlier decade of 2001-2010 when the average growth was 6.6 percent. Moreover, the target of 7 percent average annual growth was not achieved even for a single year of the decade. In fact, the growth rate was significantly weak with the lowest rate, during the decade, standing at 3.8 percent and highest being 5.7 percent. However, while these numbers speak volumes about weak growth, it is also pertinent to realize that the low growth rates were largely contributed because of the exogenous shocks and extreme vulnerability of LDCs to natural calamities. Few of the incidences that hampered the growth rates can be the Ebola virus diseases crises in many LDCs like Guinea and Sierra Leone among others. Likewise, the 2015 Earthquake in Nepal and the extreme vulnerability of Himalayan region to the erratic and irregular climatic condition largely propelled by Global Warming and Climate Change can also be an example.
The progress to eradicate poverty has also been reported to be minimal. In the first half of the IPoA program, from 2011 to 2015, it was noted that extreme poverty had declined by four percentage points from 39.2 percent to 35.6 percent. Even so, during the same period, the poverty gap saw a slow decline from 14.8 percent to 13.1 percent. Report of the Secretary-General, UN, highlights that by 2030, with this rate, more than 30 percent of the population is likely to be in extreme poverty. Moreover, the sustainable development goals targets to eradicate poverty by 2030 and hence, the achievement of this target highly depends on how the LDCs perform and progress in eradicating poverty as the LDCs consist of around 13 percent of world population.
With regards to the target of initiating a structural transformation also, progress have been modest. Contributions of multiple sectors to GDP was found to be approximately constant between 2011 to 2017. One of the most important and much needed progress seen amongst LDCs has been in the Information and Communication Technology (ICT) sector. The use of mobile phones and internet access has seen a remarkable increase during the IPoA implementation period. The ratio of mobile cellular subscription increased from 4.7 per 10 people in 2011 to 7 per 10 people in 2017. During the same period, it was also noted that the LDCs internet access had seen a rise of about 13.5 percentage points from 4.8% to 18.3%. This number must have reached even higher during the lockdown period propelled by the COVID-19 pandemic. Likewise, access to electricity amongst LDCs has also increased significantly from 34 percent in 2011 to 51 percent in 2017. Electricity consumption is believed to be extensively high in the urban parts of LDCs compared to rural parts. Hence, it is projected that the reach of electricity can be increased even more. It can be done with the rapid progress in the access of electricity in the rural areas, largely with investment focused towards mini-grid/off-grid and decentralized grid-connected solutions.
LDCs’ goods and services export transactions saw an increase from US$ 216 billion in 2011 to US$ 241 billion in 2018. Reports highlight that the product concentration index value of LDCs in total was 0.23. It saw a decrease as it was 0.42 in 2011. The IPoA target, however, was to double the share of global exports by 2020. LDCs’ exports are mostly concentrated towards primary commodities which have been falling and much of its reason has been touted to be its price volatility over the past decade.
The LDCs have been hit hard by the COVID-19 pandemic and hence, foremost priority should be towards bouncing back from the health and economic debacles propelled by the pandemic. The measures should, primarily, focus towards enhancing health facilities and build a resilient strategy to prevent similar exogenous shocks in the future. Simultaneously, efforts to increase LDCs interaction in global trade should be prioritized. Export diversification and boosting productive capacity by enhancing the disrupted supply chain (during the pandemic) can be a great strategy. Besides, technological development has been the face of many developed and emerging nations across the world. Amongst LDCs too, in the near future, it would be a prodigious strategy to push for more and more technological enhancement.
Almost every target of the IPoA program is yet to be achieved even though considerable progress is noticeable. Hence, it is extremely important to draw out the barriers and problems incurred by the LDCs throughout the IPoA implementation period. We should use it as a learning phase to effectively develop the strategy and implementation process for the fruitful completion of the Doha programme of action.
This article was also published on the Trade Insight, Volume 17 No. 3-4. Trade Insight is a quarterly magazine published by South Asia Watch on Trade, Economics and Environment (SAWTEE).
