LDC meet ends with Programme of Action, and ‘deliverables’

by Chakravarthi Raghavan

Geneva, 21 May 2001 - The third UN Conference o Least Developed Countries (UNLDC3) ended Sunday evening at the European Parliament in Brussels, after adopting a Programme of Action, presentation to the final plenary of several socalled ‘deliverables’, and a Brussels Declaration that failed to ‘deliver’ what the EU had persistently sought and pushed for - the call for launch of a new trade round at the WTO’s 4th Ministerial in Doha in November.

Neither the ‘promises’ in the Programme of Action nor those in ‘deliverables’ enthused the LDCs.

The EU and its executive commission has been trying at various meetings and fora, to get an endorsement for a new trade round (with new issues, presenting them as ‘development’ issues) and use the EBA, and its web of trade preferences with the ACP countries (in the Cotonou agreement) as well as through some of the ‘regional meetings’ sponsored by it with the WTO, to split the LDCs and the ACP countries from the other developing countries opposing this.

At the Brussels meet too, the EC had sought to get the LDCs to endorse the idea of a new round, and the UN Secretary-General, Mr. Kofi Annan lent the prestige of his office for this, in his opening statement at the first interactive session too.

The EU presidency, Sweden, floated a text saying that “the launch of a new round of multilateral trade negotiations at the 4th ministerial meeting in Qatar in November 2001 to explicitly address development interests and concerns is of vital importance.”

But this failed to fly, and on Sunday the Bureau came up a compromise with a formulation that spoke of multilateral trade relations, rather than negotiations. But this too was not acceptable to the LDCs and other developing countries. And the declaration ultimately included in a paragraph relating to trade that governments participating at the LDC meet “commit themselves to seize the opportunity of the 4th WTO Ministerial meeting in Doha in November 2001, to advance the development dimension of trade, in particular for the development of LDCs:”

In the final session of the conference, three EC personalities - the EC Development Commission, the Swedish President of the EU Council of Ministers, and the EU Parliament representative - all spoke in terms of the new round as the way to advance the development of LDCs.

Among the ‘deliverables’ were the EU’s “Everything But Arms” (EBA) initiative and the OECD’s recent decision at Paris on ‘untying aid’, both of which would not have taken place but for the Conference, the UNCTAD Secretary-General, Mr.Rubens Ricupero told the final plenary, citing such an assessment made at an earlier inter-active session by the Dutch Development Cooperation Minister, Mrs. Evelyn Herfkens.

However, as the UNCTAD secretariat’s own assessment of the EBA initiative showed that in so far as the LDCs were concerned, most of these products of LDCs enjoyed preferential access on the EU markets, and even if the US, Canada and Japan provided similar treatment, the improved market access benefits would be ‘modest’ at best - unless the other trade instruments like rules of origin and safeguards were subject to disciplines and changed to reflect the realities of the productive capacities of the LDCs.

The term ‘deliverables’, according to the New Shorter Oxford English Dictionary, is an adjective derived from the verb intransitive, ‘deliver’, and as an adjective is a dated usage 1730-1769, meaning ‘able to be delivered’. And one of the usages of ‘deliver’ is ‘to provide what is expected or what one has promised.’

But ‘deliverables’ as an officialese noun (American style) has crept into the jargon - including last week at the WTO, in relation to Doha and the ‘implementation’ debate there, when the EC spoke of ‘deliverables’ on implementation decisions.

Mr. Ricupero in his speech at the closing session said that in terms of actual decisions at the Conference, one could not be satisfied with the results.

Ricupero said it was known rom the beginning that the current state of international cooperation on development would not make possible major progress in areas like debt relief, not because there was lack of agreement, but because the current initiatives were under-funded. And as for trade, differences continued at the WTO and it had to be decided there. And as for aid, the prospects of increasing aid were limited.

In such a situation, there were three possible scenarios:

One was to go back to confrontation as in the past, but this would lead nowhere. The second was resignation or passivity, which was a very serious, with people really committed to aid and ODA, showing passivity in the face of the dominant trends. But this was an area where they should not give in to passivity, and UNCTAD would continue to press for reversal of the trends.

A third scenario, and on which UNCTAD had opted for in relation to the 3rd LDC conference was to seek new methods of imparting progress. UNCTAD decided that if there was no consensus or political will at this point to move beyond, to adopt a new approach - to keep the intergovernmental process, but side by side to have another process where they would not be called upon to agree through negotiations among states, but select concrete and tangible problems, organise a debate to reach some positive outcomes.

The participation of various international organizations, the private sector, parliamentarians, mayors of cities in the various activities had been done to enable these actors to advance in their areas without any interference from outside.

In a preambular paragraph of the Declaration, the Conference recognised that the goals set out at the Second UN Conference on LDCs (at Paris in 1991) had not been reached and that LDCs as a whole “remain marginalised in the world economy and continue to suffer from extreme poverty.” The progress of LDCs had been undermined by lack of sufficient human, productive and institutional capacity, indebtedness, low levels of domestic and foreign investments, declining trends in ODA flows, severe structural handicaps, falling or volatile commodity prices, HIV/AIDS and for some of them violent conflicts or post-conflict situations.

The declaration committed the governments to the eradication of poverty and the improvement of the quality of lives of people in LDCs by strengthening their abilities to build a better future for themselves and develop their countries.

This, the declaration said, could only be achieved through equitable and sustained economic growth and sustainable development based on nationally owned and people-centred poverty reduction strategies. Good governance at the national and international level; the rule of law; respect for all internationally recognised human rights, including the right to development; promotion of democracy; security through preventive diplomacy and the peaceful resolution of armed conflicts; gender equality; investment in health, education and social infrastructure; strengthening of productive capacities and institution building were all essential in order to realise the vast and untapped human and economic potential in LDCs.

And while the primary responsibility for development in LDCs rests with LDCs themselves. But their efforts need to be given concrete and substantial international support from Governments and international organisations in a spirit of shared responsibility through genuine partnerships, including with the civil society and private sector.

The conference was particularly concerned by the acute threat of the HIV/AIDS pandemic, and emphasised the need for the strongest possible measures to combat this and other communicable diseases, particularly tuberculosis and malaria. Improving the welfare of people was an indispensable requirement for sustainable development. “We have to strive to fully achieve the goals and objectives set out in the Rio Declaration in particular, as regards combatting desertification, preservation of biological diversity, supply of safe drinking water and climate change in accordance with common but differentiated responsibilities.

On trade, the declaration said: “We believe that increased trade is essential for the growth and development of LDCs. A transparent, non-discriminatory and rules-based multilateral trading system is essential for LDCs to reap the potential benefits of globalization. The accession of LDCs to the WTO should be encouraged and facilitated.

“We commit ourselves to seizing the opportunity of the fourth WTO Ministerial meeting in Doha in November 2001, to advance the development dimension of trade, in particular for the development of LDCs. We aim at improving preferential market access for LDCs by working towards the objective of duty-free and quota-free market access for all LDCs=B4 products in the markets of developed countries. Measures will also be taken to address problems caused by supply-side constraints. The crucial importance of trade and economic growth must be reflected in poverty reduction strategies.”

On the financing issue, the declaration recognized that the most important financing of development comes from domestic resources, and that foreign direct investment is also an important source of capital, know-how, employment and trade opportunities for LDCs. In this regard, the declaration emphasised the need for an enabling environment for savings and investment, including strong and reliable financial, legal and administrative institutions, sound macro-economic policies and the transparent and effective management of public resources in order to help mobilise both domestic and foreign financial resources.

The declaration added: We commit ourselves to seizing the opportunity of the Conference on Financing for Development in March 2002 in Monterrey, Mexico for the mobilisation of resources for development, in particular for the LDCs.”

The declaration went on to say: “We affirm, also in this context, that official development assistance (ODA) has a critical role to play in support of LDC development. We take upon ourselves not to spare any effort to reverse the declining trends of ODA and to meet expeditiously the targets of 0.15% or 0.20% of GDP as ODA to LDCs as agreed. We undertake to improve aid effectiveness and to implement the OECD-DAC recommendation on untying ODA to LDCs. “

On the debt issue, the conference in the Declaration expressed concern with the external debt overhang that affected most LDCs and remained a main obstacle to their development and affirmed the commitment to provide the full financing and the speedy and effective implementation of the enhanced HIPC Initiative, which is essential for freeing domestic budgetary resources for poverty reduction.

“We undertake to make expeditious progress towards full cancellation of outstanding official bilateral debt within the context of the enhanced HIPC Initiative. We also undertake to provide debt relief to post conflict countries within the flexibility provided under the HIPC framework. The debt sustainability of LDCs, including non-HIPC LDCs, will continue to be subject to review, and consideration may be given to granting a moratorium on debt service payments in exceptional cases.”

The declaration also stressed the critical importance of an effective follow-up to the Conference at the national, regional and global level, and asked the UN Secretary General to ensure that the Conference be followed up “in an efficient and highly visible manner. “

But despite the nice-sounding sentiments and promises and ‘commitments’ in the Declaration and Programme of Action, it was difficult to put one’s finger on anything out of the Brussels that would really make a turning point in the lives of the people of 49 LDCs, nor to be certain of progress in the next decade - in the sense of reducing the number of LDCs, by their making progress on various economic and social criteria.

The pre-conference documentation had clearly brought out that the targets set at the 2nd UN-LDC conference in Paris in 1991 had scarcely been met, with many of those whose ODA, for example, were below the targets set not having improved or achieved these targets.

The developed countries have already slashed their ODA, and there is no sign that they are about to reverse course and increase aid.

In a presentation to the conference, the British charity Oxfam said that over the last decade, the rich nations have in fact cut aid by $3.5 billion, and less than half-a-dozen of the OECD nations have reached or maintained their targets of 0.7% of GNP as aid, and within it 0.2% as aid to LDCs.

And even after the HIPC initiative is implemented, a little over a dozen of the LDCs will have unsustainable debt burdens - the World Bank and the IMF staff recently in fact admitting that their projections of trade and export growth of these countries were unrealistic.

The UN has said that an annual $7-10 billion would be needed to tackle the AIDS pandemic, but NGO activists have noted that the announcement of US President George Bush of a $200 million contribution to the appeal for $10 billion annual funding is as good as killing the initiative from taking off.

In some telling comment, Oxfam said of the conference and its outcome: “The results are meagre and disappointing.... Almost everything announced last week at Brussels was there before.”

As a columnist in a British paper put it last week in relation to the UK elections, and the promises of Tony Blair and the labour party, on issues of equity, even in relation to their own citizens, the current trend in the developed world is to take away from the less poor to give to the poorer, and not by taking anything away from the rich and affluent.

The overarching goal of the Programme of Acton, the document adopted by the Conference said, was to make substantial progress towards halving the proportion of people living in extreme poverty and suffering from hunger by 2015, and promote sustainable development of LDCs. This would require significant and steady increase in GDP growth rates of LDCs - at least 7% per annum, and increased ratio of investment to GDP of 25% per annum.

But the actual commitments and promises of external support from the development partners hardly added up to these.

For fostering a people-centered policy framework, the development partners of the LDCs promised to facilitate an external environment supportive of full and timely realization of the objectives through the increasing involvement of LDCs in the work relating to their international development strategies in the international financial institutions and multilateral organizations.

But there is little indication, either in the stances of the IFIs and the multilateral organisations at Brussels, on how this will be achieved, and how ‘ownership’ of programmes and involvement in drawing up strategies would not become another ‘conditionality’.

On good governance, the Programme of Action spoke of the commitment to an open, equitable, rule-based, predictable and non-discriminatory multilateral trading and financial system, and spoke in exhortative language of ‘should’ about addressing governance issues at international level and international economic decision-making processes affecting LDC’s development, about addressing multilateral policy and regulatory issues affecting LDC development efforts, about taking into account circumstances and interests of LDCs in multilateral institutions and processes, and the promise of “adequate attention being paid to checking unfair business practices and corruption by multinational companies, domestic firms and any other business entities.

The document, under the commitment on building human and institutional capacities, said: “An immediate priority is to fucus greater effort on fighting HIV/AIDS, malaria and tuberculosis and their social and economic impact” while at the same time pursuing longer-term policies and strategies in health, education, employment and rural development.

In terms of actions by development partners, the document called for determined efforts to increase ODA in support of LDCs, promoting and encouraging innovative sources of funding and technical support through partnerships among LDC and donor governments, national and international private sector, and NGOs and foundations.

On trade and market access, the document called for improving preferential market access for LDCs by working towards the objective of duty-free and quota-free market access for all LDC products in the markets of developed countries, with improvements to be granted on a “secure and predictable basis.” Such access, “should” be combined with simplified rules of origin that provide transparency and predictability to ensure that the LDCs benefit from the market access granted and multi-donor programmes.

On Special and Differential Treatment, the Programme of Action among others called for:

        “implementing in full and as a matter of priority the special and differential measures in favour of LDCs as contained in the Final Act of the Uruguay Round” and with new measures for LDCs to be considered “as part of future multilateral trade negotiations.”

        continuing to improve GSP preferences for LDCs

        in any appropriate negotiations, to examine the possibility of strengthening effectiveness of non-actionable categories of subsidies to take into account needs of LDCs

        strengthening technical assistance for implementation of multilateral trade agreements

        facilitating accession process to the WTO on the basis of terms that fully take into account the stage of development and basic principles of S&D treatment, and ensuring that the accession process is more effective and less onerous and tailored to specific economic conditions of the LDCs and by streamlining WTO procedural requirements,

On implementation, follow-up and monitoring, at the Global level, the Programme of Action called for the commitments undertaken in the Programme to be appropriately reflected in the review of major global summits and conferences and the follow-up to the UN Millennium Declaration.

The General Assembly is asked to monitor the implementation of the new Programme of Action through a specific item on its agenda, with substantive preparations being carried out by relevant bodies of the UN system and by strengthening the coordination of actions of the UN system under the aegis of ECOSOC.

The ECOSOC is invited to consider, for final decision by the General Assembly, creation of an annual agenda item for review and coordination of the implementation of the Programme of Action, allocated to the ECOSOC’s coordination segment, examination at regular intervals of this review and coordination at its High-Level segment, and undertaking effective preparations for this review process.

The UN Assembly is invited to consider conducting a comprehensive review of the Programme of Action at a moment to be decided upon.

And at the end of the decade, the General Assembly is invited to consider holding a 4th UN Conference on LDCs to make a comprehensive appraisal of the Programme and decide on subsequent actions In terms of the secretariat, para 116 of the Programme says:

The Secretary-General of the United Nations is requested to submit to the General Assembly at its 56th session his recommendations for an efficient and highly visible follow-up mechanism, including the possibility to transform the current Office of the Special Coordinator for the Least Developed, Landlocked and Small Island Developing States into an Office of High Representative for Least Developed, Land-locked Developing Countries and Small Island Developing States.” – SUNS4900

The above article first appeared in the South-North Development Monitor (SUNS) of which Chakravarthi Raghavan is the Chief Editor.

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