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Least
Developed Countries (LDCs) Conference in Istanbul - 09 May, 2011
06 May, 2011
Opportunity knocks
Next week, in Istanbul, world leaders
will have a chance to kill two birds with one stone: to breathe new
life into solid, long-term economic recovery and to fulfil long-term
commitments to reduce poverty, hunger and disease in the world’s 48
Least Developed Countries’ Conference.
This diverse group of nations – 33 in
Africa, 14 in Asia and Oceania, and one (Haiti) in the Western
hemisphere – has one common desire: increased engagement in the
global economy. In the last decade, LDC exports have risen by a
factor of five, and their share of world trade has doubled. But,
with 12 per cent of the global population – some 900 million people
– LDCs still collectively produce only 1 per cent of world exports,
and receive less than 2 per cent of global investment.
Investing in LDCs offers a vast, and
virtually untapped, opportunity to provide much-needed further
stimulus to the global economic recovery without significantly
burdening the balance sheets of the developed countries with more
red ink. G-20 leaders recognized this last year at their meeting in
Seoul.
In recent years,
more than half the LDCs have shown consistent growth built on demand
for commodities, diversification of their economic base or more
productive regional partnerships. Nepal, which currently holds the
presidency of the LDCs, is typical of many LDCs that are working to
improve essential social services, encourage inclusive and
transparent governance and provide efficient environments for doing
business in the 21st century.
But LDCs will
not escape their vulnerability easily. Climate change, in
particular, poses a severe challenge. While LDCs
produce the least greenhouse gas emissions compared with any other
country grouping, their agriculture-oriented economies are the most
threatened by the effects of a changing climate. Many are prone to
desertification, or are at risk from sea-level rise and tropical
storms. Others, like Nepal, depend on run-off from mountain
glaciers that appear to be receding.
Rising food prices also present a
clear test. Most LDCs are net food importers. Half their
populations live in extreme poverty. One person out of three is
malnourished. Agricultural capacity is low. On the other hand, the
vast areas of under-utilized arable land in LDCs means they offer
considerable potential to increase world harvests: improving
nutrition security at home and mitigating food price inflation that
– as we have already seen – poses a threat to social and political
security worldwide.
Most measures under negotiation by
governments going into the Fourth UN Conference on the LDCs in
Istanbul are well within the capacities of the world’s nations.
Development assistance from the North has been generous, and has
been rising over the last decade. We hope to see this trend
continue. At only one quarter of total Official Development
Assistance, aid to LDCs can easily increase – with considerable
returns on investment to all parties. It can help to improve basic
infrastructure, train the abundant human capital and ensure the
transfer of adapted know-how. All these are important for
attracting greater foreign direct investment. And indeed, productive
capacity-building will be the main focus of the LDC conference in
Istanbul.
We would also like to see more
incentives for investors who want to get in on the ground floor of
economies that are using a base of prized primary commodities as a
foundation to diversify. This includes bringing down trade barriers
to LDC exports and fulfilling commitments enshrined in the Monterrey
Consensus and the Doha Declaration on Financing for Development.
Studies have shown that 100 per cent duty-free quota-free access to
markets would have only a negligible impact on domestic producers in
host countries, but could bring profound benefits to LDCs. Equally,
relieving LDCs of their debt burden would free up resources for
improving infrastructure and productive capacity.
One development that gives us new hope
is the growing role of the global South. Statistics from the UN
Conference on Trade and Development show that companies from
emerging economies raised their direct investment abroad to record
levels in 2010. A good deal of that investment is going to LDCs.
Combined with growing trade and assistance , nations like India,
Brazil, China, South Africa and Turkey are serving as new models for
LDCs under the South-South Cooperation.
For their part, the LDCs are working
hard to overcome the various social, economic and environmental
challenges they face so they can follow in the footsteps of the
major emerging economies that have fared so well in the past two
decades, including by enacting political and economic reform. Only
by providing a fuller global economic role for these countries can
we set in motion the necessary economic currents that will carry
often unstable nations towards the security and stability the whole
world needs.
Investing in LDCs is a classic win-win
for all: traditional donors, emerging economies, the private sector
and – most important – nearly one billion people who deserve to
enjoy their rights to social progress and better standards of life.
Opportunity knocks in Istanbul on 9 May. Let us seize it.
Abdullah
Gül, President
of the Republic of Turkey
Jhala Nath
Khanal, Prime Minister of the
Federal Democratic Republic of
Nepal
Ban Ki-moon, United Nations
Secretary-General
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