Statement by Dr. Arjun Karki, Global Coordinator, LDC Watch at the Parliamentary Forum of the 5th UN Conference on the Least Developed Countries (LDC5)
Exhibition Hall 1, Qatar National Convention Centre, 4 March 2023, Doha, Qatar
4 March, 2023
Honourable Members of Parliament, Excellencies, Distinguished delegates, Ladies and gentlemen,
Our gathering here at Doha marks the five decades when a separate LDC bloc by the United Nations was established, to address the common vulnerabilities of those countries with limited productive capacity and socio-economic infrastructure. During this time, we have conducted many programmes of action – starting with the Substantial New Programme of Action, Brussels Programme of Action, Istanbul Programme of Action, and now we have the Doha Programme of Action for the Decade 2022-2031. Yet, the goal set by each programme of achieving “sustained, equitable, and inclusive economic growth” in LDCs has been largely unmet. It is high time we realized, internalized, and learnt from our common failure.
The pace and pattern of graduation of countries from the LDC category indicates persistent underdevelopment. Only six countries have graduated from the LDC category since 1971. We began with 25 countries; we now have 46. Africa is home to 33 out of 46 LDCs, yet only three countries in Africa have graduated.
We have just completed the implementation period of the Istanbul Programme of Action (IPoA). The results indicate that LDCs collectively failed to meet most of the IPoA targets. Even prior to COVID-19, the IPoA target of achieving at least a 7 percent sustained growth rate was achieved in very few LDCs. The pandemic further increased LDCs’ structural and economic vulnerability and posed the risk of reversal of whatever gains had been made. The pandemic created 40 new billionaires thanks to the high demand for their products and services, while more than half a billion people were pushed into extreme poverty. In Africa, estimates based on the current rate of progress shows that poverty will not be eradicated even by 2043.
The pace of structural transformation has been slow. The LDC economies saw a shift of output and labour from agriculture to service, without any growth of the manufacturing sector. While agricultural growth should form the basis for industrialization, most LDCs in Africa struggle to maintain food security. The Global Hunger Index 2022 indicates that 21 LDCs in Africa have ‘serious’ hunger, seven are facing an ‘alarming’ rate of hunger, while one country is facing ‘extremely alarming’ hunger.
Even before COVID-19, an estimated 2 million children died in LDCs, mostly from preventable causes, while only nine of the 37 LDCs for which data exist provide health care for more than 20 per cent of the population. In addition, LDCs accounted for only 1 per cent of global trade in 2020, indicating that LDCs have not proportionately benefitted from globalisation.
There are high degrees of inequality in LDCs, which are not only characterised by constraints, such as low per capita income, low level of human development, and socio-economic vulnerability, but all of these disproportionately affect more women than men. Women are overrepresented in low paid jobs, have less access to social protection, and receive lower pay than men for work of equal value.
The COVID-19 vaccination rates within LDCs remained low – as of mid-2021, only 2 per cent of the population were vaccinated, as compared to 41 per cent in developed countries. The Trade-Related Aspects of Intellectual Property Rights (TRIPS), which came into effect in 1995, set high standards for the protection of intellectual property, including vaccines and life-saving drugs. The vaccine-divide is a clear example of the devastating consequences of medical technology protectionism against the most vulnerable. We demanded, during the drafting process of the DPoA, that TRIPS waiver should continue for all LDCs, and for at least twelve years after LDC graduation. However, the DPoA paid little heed to our demand and only reiterated WTO’s 12th Ministerial Conference decision that the TRIPS waiver extension for pharmaceutical products would only last until 1 January, 2033 or until graduation, whichever is earlier.
While LDCs should prioritize developing their own domestic revenue base for development, external financial flows, in the form of Official Development Assistance (ODA), FDI, and remittance, are still required to accelerate the development process. ODA to LDCs did not meet the threshold of at least 0.15-0.20 per cent of OECD Development Assistance Committee (DAC) countries’ GNI contribution, despite the IPoA. While ODA to the most vulnerable countries has grown since the pandemic, this increase has been driven overwhelmingly by loans. The LDCs’ total external debt servicing has more than tripled in the last ten years. As of September 2020, 16 LDCs were deemed to be at high risk of external debt distress, with four already in debt distress. Assistance towards LDCs should never create debt. We strongly call upon our development partners to follow the principle of country ownership, transparency, and untied aid to improve aid effectiveness. It is equally crucial, that LDCs’ dependency on aid should be reduced. Instead, domestic revenue should be raised by broadening the tax base and enhancing compliance and transparency, introducing wealth taxation and curbing illicit financial flows. While we welcome the UN resolution to take on a global tax leadership role paving the way for a UN convention on taxation, we insist that a new UN-led global tax body be quickly instituted.
While 35 out of 46 LDCs are members of the WTO, trade-related assistance to LDCs is only committed in “best endeavour” language rather than being enforceable, so support can be withdrawn at any time. In order to enhance exports, every product originating from LDCs should be covered by Duty-Free Quota-Free (DFQF) schemes. Given the high concentration of LDCs’ exports on a few products, excluding even a few products in which LDCs have export capacity, such as clothing, textiles, and some agricultural products, entails huge loss of markets. We call on developed and multilateral trade bodies to provide better terms of trade, give more access to world markets, a stable price of commodities, and better transfer of appropriate technology.
Although LDCs contribute little to global warming, they suffer devastating impacts from human-induced climate hazards. Climate finance is now at centre stage amidst the disproportionate climate impacts borne by LDCs. While we welcome the COP27 decision to create a Loss and Damage Fund as a part of the wealthy countries’ acceptance of their historical responsibilities, there is little clarity on the intricacies of the fund, including quantum, sources, and operating procedures. Importantly, looking at the creation of different climate-related funds and the failure to meet the committed targets, it is doubtful whether rich nations would fill this new fund with anything near the fair share needed to compensate for the damage caused. Climate finance is also meant to cover part of wealthy countries’ mitigation obligations. Wealthy countries’ responsibility for historical and continuing emissions of greenhouse gases is so huge that it is not enough for wealthy countries to reach zero emissions domestically. Meanwhile, all countries should make clear and unequivocal commitment to a global, rapid, just and equitable transition out of fossil fuels, which is the biggest source of greenhouse emissions. We, therefore, urge developed countries to provide sufficient finance for LDCs, to enable them to adapt to, and build resilience to cope with the effects of climate change, and also transition to clean energy.
Sadly, after fifty years of programmes of action by the United Nations and development partners, the stark reality is that these have utterly failed to bring significant improvements in the living standard of people in LDCs. This calls for a renewed international cooperation, with a new set of formal and informal institutions, rules and norms, incentives, standards, and processes, to shape international economic relations that are conducive to LDCs’ sustained and inclusive development. This includes reforming global economic regimes as well designing a new generation of international support mechanisms for the LDCs to address their structural constraints and vulnerabilities. We hope that the effective implementation of the DPoA inspires renewed efforts among national and international partners. South-South cooperation should be one of the pillars of such international cooperation framework.
If a new framework for international cooperation, including the Doha Programme of Action, is put into action, it must supplement LDCs’ own efforts. National development programmes and the DPoA must be fully ‘owned’ by both LDC governments and crucially by LDCs’ local population. The lessons learned from five decades of failed policies, and from the COVID-19 pandemic show that LDC governments must take responsibility for their own development, and move away from failed neoliberal policies.
The role of parliamentarians is crucial in local/national, regional and global development processes as they are the elected representatives of citizens, and are committed to defending their interests, concerns and human rights and are significant stakeholders in development. We call for increased policy space for parliaments in implementing the DPoA to ensure democratic governance and decision-making in development processes.
In line with the DPoA mandate to increase transparency and good governance, LDC Watch, which has members in all LDCs, is increasing its outreach, and by building strong coalitions, is leading the civil society process in organising regional consultations on future actions, and reviewing the implementation of LDC-specific programmes. I would like to take this opportunity to urge parliamentarians to engage with us in making the DPoA implementation a success. Take note that LDC Watch will be globally coordinating a people’s review of the DPoA’s progress. LDC Watch, Asian People’s Movement on Debt and Development (APMDD) and other civil society organisations from the Global South are organising a parliamentarian forum titled “Parliamentarians for a Fossil Fuel Free Future and the Doha Programme of Action” on 6 March 2023. I, on behalf of LDC Watch, would like to extend a warm invitation to all parliamentarians present here. We would greatly benefit from your presence and contributions.
The DPoA implementation period coincides with the final years of the implementation period of the Sustainable Development Goals. It is not possible to meet the SDG targets without prioritising the development of LDCs. Let us remind ourselves: No SDGs without LDCs! Lastly, we hope to see many LDCs graduate to developing country and middle-income status in the coming decade. However, meeting the graduation criteria is not enough; the graduation should be smooth, non-reversible, inclusive, resilient, and sustainable, and must take into account the vulnerabilities experienced by LDCs related to the COVID-19 pandemic, cost-of-living crisis, debt crisis, and climate disasters.
Thank you all for your attention.