24 days ago

Matching words with deeds matters

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Just in progress is a global event where leaders of the least- developed countries have gathered in Doha, the capital of Qatar, to brainstorm a comprehensive roadmap for these countries to move forward  in the next decade.  The five-day international conference, starting off Sunday, is the second and final part of the Fifth United Nations Conference on the Least Developed Countries (LDC5). Usually held once in a decade, the current meet is expected to finalise 'The Doha Programme of Action for the Least Developed Countries for the Decade 2022-2031.' The work-programme "manifests a new generation of renewed and strengthened commitments between the least-developed countries and their development partners, including the private sector, civil society and governments, at all levels." Originally adopted a year back and endorsed by the United Nations General Assembly, the Doha Programme of Action (DPoA) is a set of targets to achieve by these countries by 2031.

 This is another ambitious global endeavour to support growth of the countries lagging behind in the global march for advance onto newer highs. Currently there are 46 LDCs, 35 of which are members of the World Trade Organisation (WTO) as of now. The share of the LDCs in the global trade in goods and commercial services has been static for almost a decade.  In 2017, the share was 1.14 per cent which reached 1.17 per cent in 2019. It came down to 1.15 per cent in the pandemic-afflicted year 2020 and remained he same in 2021. The tiny share falls short of the target set in the United Nations Sustainable Development Goals (SDGs) in 2015. Target 17.11 of the SDGs gives the direction to 'significantly increase the exports of developing countries, in particular with a view to doubling the least-developed countries' share of global exports by 2020.' The share of LDCs' exports, however, stood at 0.93 per cent of the global total in 2020 and remained same in 2021. The full-year update data for 2022 are not available yet.

 So far, Bangladesh is the top merchandise exporter and importer amongst members of the group. The country's exports covered 20 per cent of all LDCs' exports in 2017, which stood at 19 per cent in 2021, according to statistics compiled by the WTO. In 2017, Bangladesh's share in LDCs' total imports of goods was 22 per cent which increased to 26 per cent in 2021. Cambodia (9pc) and Ethiopia (7 pc) were the second-and third-largest importers respectively.

 The Covid-19 pandemic came as a big blow to LDCs' export of goods, which declined by 1.8 per cent in 2019 and dropped further by 7.8 per cent in 2020. The exports, however, rebounded in 2021, recording a growth of 26.90 per cent. A note prepared by the secretariat of the World Trade Organisation last year said that LDCs' goods exports benefitted from rising energy prices in the last year while exports of commercial services lagged behind (posted 9.10-percent growth) due to pandemic-related travel restrictions.

Trade is a critical instrument for the LDCs to move ahead. That's why these countries have been offered duty-free market access to most developed countries and some developing countries, too. For example, Australia, New Zealand, Norway and Switzerland offer cent-percent tariff-free market access to LDCs. The offer from Chile, the European Union, Iceland and the United Kingdom is 99-percent duty-free market access. In addition, Canada, Japan and China offer at least 97-percent duty-free market access. Meanwhile, some other members grant duty-free access. Countries like India and South Korea also offer 90 per cent or more of their tariff lines duty-free for the LDCs.

 Nevertheless, LDCs have yet to tap the full potential of these offers of tariff-free or preferential market access mainly due to various bottlenecks. A series of non-tariff measures (NTMs), adopted by the developed and developing countries, make it more challenging for the LDCs to utilise the advantage of tariff-free marketing. Lack of product diversification coupled with inadequate infrastructure and skilled manpower also makes it difficult for these poorer countries to enhance their productivity and competitiveness.

  The fourth key focus area of the DPoA is 'enhancing international trade of least- developed countries and regional integration.' Under the area, the programme outlines several key action areas. These are (a) duty-free and quota-free market access (b) preferential rules of origin (c) LDCs' services waiver, technical assistance and capacity building, including through Aid for Trade (d) Trade-Related Aspects of Intellectual Property Right or TRIPS (e) agriculture and cotton (f) WTO agreement on trade Facilitation (g) e-commerce (h) special and differential treatment and (i) regional integration.

 One can easily find that all these areas have long-been included in the WTO agenda for negotiation. Some remarkable improvements have already been observed in some areas. Others need more combined efforts to make the things easy for the LDCs. Though there is no lack of commitments from the developed and some developing countries to support the LDCs, the words have yet to be adequately matched with deeds.

 DPoA sets a target to 'significantly increase the exports of least-developed countries, in particular with a view to doubling their share of global exports by 2031.'  It means, LDCs' share in global export needs to reach 1.90 per cent to 2.0 per cent by the end of 2031. If the current trends of 6.6-percent average growth of last six years continue, it is unlikely that the target could be reached within a decade.

 As a number of LDCs will come out from the UN-defined category of poor nations by 2031, the total number of LDCs will also decline. So will the volume and share of LDCs' trade. Thus, the target of doubling the LDCs' trade will not be achieved. Bangladesh, Lao PDR and Nepal are set to  graduate out of the LDC category by 2026. Bhutan, Angola, São Tomé and Príncipe and Solomon Islands were scheduled to be graduated by 2024. They, however, get five years' preparatory period.

 Moreover, nine more are also on the list of graduation provided they fulfil all the required conditions. Thus, the number of LDCs may come down to below 40 by the end of 2031 from the current 46. DoPA has also set a target to 'enable 15 additional least-developed countries to meet the criteria for graduation by 2031.' The roadmap also underscores the specific measures to support LDCs graduate for 'making the graduation sustainable and irreversible.'

 How the latest endeavour will bring a significant advancement of these countries can be observed after a decade. Meantime, the core challenge will be to adjust with global changes in-between to keep the path as smooth as possible. 

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