Despite 20 years of international efforts to break the LDCs out of the 'vicious cycle' of aid-dependency, they are continuing to rise dramatically in number.

by M.J.Sandrasagra

United Nations, 28 Jul 2000 (IPS) -- The world’s least developed countries (LDCs), described as the poorest of the poor, are increasing in number despite 20 years of international efforts to break them out of the aid-dependency ‘vicious cycle’.

Of today’s 48 LDCs, 33 are in Africa, nine in Asia, one in the Caribbean and five in the Pacific Region. Botswana is the only country to ever be removed from the LDC list and, according to the United Nations, Senegal, Congo and Ghana meet criteria to be added to the list this year amidst serious deterioration of their economies.

The number of LDCs has been rising dramatically - at a rate of approximately one per year - since the international community in 1971 recognised the existence of this category of countries whose distinctness lay not only in the profound poverty of their people, but also in the economic, institutional and economic resources.

Although LDCs constituted about 10% of the world’s population in 1997, their share in the world inputs was only 0.6% and in world exports, 0.4 percent. These shares represent declines of more than 40% since 1980 and are a testimony to the increasing marginalisation of LDCs.

LDC and donor bodies will meet at the Third LDC Conference to be held in Brussels, Belgium in May of 2001 to reaffirm commitments made in 1981 and 1990 at the First and Second LDC Conferences held in Paris, France.

Addressing the Intergovernmental Preparatory Committee for the Third UN Conference on LDCs which concluded one week of deliberations here Friday, Ferhan Erkmenoglu of Turkey said that, “unbalanced income distributions, mass unemployment, poverty and the increasing gap in welfare levels between people within the LDCs pose a serious threat to peace and security in much of the developing world.”

The United Nations is facing a 20 year-old credibility problem regarding unfulfilled commitments of its members to reverse the increasing marginalisation of the world’s least developed countries (LDCs), he noted.

“The widening income inequality between countries, the growing incidence of poverty and the threat of depopulation in poorer countries resulting from the HIV/AIDS pandemic were raising questions as to just how serious the international community was about its commitments,” said Rubens Ricupero, Secretary-General of the UN Conference on Trade and Development (UNCTAD).

“There is now an increasing sense that to close the credibility gap, the international community needed to redouble its efforts to provide LDCs with at least the minimum requirements for progress, particularly official development assistance (ODA), debt relief and meaningful market access,” Ricupero told reporters.

Jacques Scavee, Chairman of the Preparatory Committee, emphasised the lack of commitment on the part of donors, saying that of the $16 million cost of the preparatory process only one-third has been received.

A major shortcoming noted was the inability to translate the Global Programme of Action - adopted at the first and second LDC conferences - into action programmes at the national levels due to “shortcomings in physical infrastructure and human resource development, low levels of domestic resource mobilisation; shortcomings in macroeconomic policy design and management; and severe socio-economic consequences of local or regional conflicts”.

Furthermore, the ODA target of 0.15% of donors’ gross national product (GNP) universally agreed upon at the Second UN Conference has not been met. “What is needed is a drastic new approach to implementation of an action-oriented agenda and the political will to carry it out,” said Ricupero, who is also secretary-general of the Third LDC Conference.

A 39-page UNCTAD report released Thursday, estimates that $20 billion of aid over the next 10-12 years is required for Africa to escape the aid-dependency trap.

“Foreign assistance should serve to promote domestic growth and long term economic development and transformation, so that eventually the LDCs could reduce their dependence on aid and draw foreign investment,” Erkmenoglu said.

Anwarul Karim Chowdhury of Bangladesh, the co-ordinator for LDCs, said “efforts were not likely to succeed without strong international support measures.” He noted that attention is required in the following areas: re-orientation of aid programmes, decisive reduction of the debt burden, encouraging foreign direct investment in LDCs, market access, emphasising capacity-building, and eradication of poverty.

“The high indebtedness and deteriorating capacity of LDCs to service debts underlined the need for comprehensive debt relief that was much broader than any of the schemes currently under way,” Chowdhury added.

Speaking on behalf of the Group of 77 and China, the representative of Nigeria called for a new Programme of Action for the LDCs for the first decade of the new century, “taking into account some of the changes of the past decade, such as globalisation, rapid advances in science and technology, and the greater articulation of social rights, human rights and environmental objectives”.

France, speaking on behalf of the European Union which will be hosting the Third LDC Conference, emphasised that the best possible conditions must be established to ensure the full participation of civil society and non-governmental organisations.

Nikhil Chandavarkar of the UN Development Programme (UNDP) emphasised that, “the participation of civil society and the private sector in aid co-ordination has to be strengthened.”

NGOs, however, are expressing concern that the Third Conference will achieve very little - emphasising that the current model of free market economics has not worked in the LDCs.

Fifty NGO delegates from both the North and the South, some 15 of them from LDCs, converged in New York from Jul 24-26 to follow the deliberations of the Preparatory Committee for the Third Conference.

A joint statement delivered by James Mackie of the Liaison Committee of Development NGOs to the European Union NGOs emphasised that, “a quick review of the agreements of the previous two Conferences in 1981 and 1990 indicates how little has been achieved in the past 20 years.”

“There is a serious danger that the Third Conference will do nothing but reiterate a hollow set of promises, that the world no longer believes donor countries and LDCs are really committed to achieving,” the NGO coalition emphasised. The coalition pointed out that debt cancellation has proceeded at a snail’s pace since the Second Conference and so far shows extremely meagre results.

“The world context in which LDCs have to operate has become increasingly unfavourable to their needs,” the NGOs said. “The establishment of the World Trade Organisation (WTO) paid scant regard to their interests and the increasing globalisation of the world economy means more than ever before, that the rich are getting richer while the poor are getting poorer.”

Therefore, “the Third Conference comes at an opportune time, the challenge facing us has never been greater,” the coalition said. But equally this means that the danger of failure and ridicule for the process is that much higher - it will require great political will to achieve a breakthrough and every effort must be made to assure this is achieved.