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1. The Third United Nations Conference on the LDCs, coordinated by the United Nations Conference on Trade and Development (UNCTAD), was held at the European Parliament in Brussels from 14 to 20 May 2001. The European Union hosted the event at which representatives from 193 governments, UN agencies and civil society were present.
2. Despite the two conferences organised in 1981 and 1990, the position of the LDCs has worsened and they have become increasingly marginalised. Over the last decade, their number has grown from 42 to 49, with Senegal the latest country to join the "group" early this year. The United Nations General Assembly decided, therefore, to convene a third Conference in resolution 52/187 of 18 December 1997, and set the following mandate for it:
3. During this Third Conference, the problems facing the LDCs were considered in relation to the following themes:
This Conference also witnessed the signature by some LDCs of several bilateral investment agreements, precursors of a variety of initiatives emanating from UN and other international organisations, including the private sector. Above all, however, the Conference closed with the adoption of a Political Declaration (A/CONF.191/L.20) and a Programme of Action for the Least-Developed Countries for the Decade 2001-2010 (A/CONF.191/11) listing seven commitments relating to the above-mentioned issues.
4. This Background Note aims to provide an overview of the various developments and initiatives which emerged from the Third Conference. It will concentrate, among the different issues, on those related to international trade mentioned in the two texts adopted during the Conference. However, since the Conference chose to adopt a new approach, inviting organised civil society and the private sector to debates, these will also be considered.
5. UNCTAD, the main Conference organiser, wanted to introduce new working methods for the meeting, and therefore decided to create an original format for the Conference by encouraging the participation of other international organisations and involving civil society and the private sector, whilst retaining a central role for the intergovernmental process.
6. Non-governmental and other organisations from civil society met several days before the Conference at an NGO Forum which enabled them to adopt and defend a shared position regarding the themes dealt with during the Conference. Participation from NGOs and other civil society organisations was strong, and their representatives were allowed access to the interactive thematic sessions, the general declarations and all the working groups, with the exception of the negotiation clusters [Note 1].
7. Meetings held in parallel, involving all the development partners and representatives from the private sector etc., enabled a number of concrete initiatives to be launched and programmes of concerted action to be announced. Thus, the 8th World Summit of Young Entrepreneurs, which took place at this time, launched the World Trade University, to be based in Toronto with campuses in Asia and Africa. It will provide teaching which is accessible geographically and financially to entrepreneurs and decision-makers in LDCs, developing countries and countries whose economies are in transition. The Meeting of Mayors on City-to-City Cooperation - organised by UNCTAD, UN-Habitat and the United Nations Development Programme (UNDP) - led to a Declaration on City-to-City Cooperation which created a mechanism for cooperation whose aim is to eradicate urban poverty.
8. Agencies from the United Nations and other international organisations announced several initiatives, some of which are joint:
9. This extension of participation, in particular to representatives from civil society, is proof of the need to bring together all the parties involved in development in order to fuel the debate, to hold discussions on concrete topics and arrive at practical solutions. Whilst the Non-governmental organisations were very pleased to have taken part, they regretted not having been able to join the cluster negotiations and were naturally disappointed that many of their proposals had not been taken up by government delegates, particularly those relating to LDC external debt.
10. Both a Political Declaration and a Programme of Action for the Least-Developed Countries for the Decade 2001-2010, inspired from the principles set out in the Millennium Declaration [Note 2], were enthusiastically adopted by the Conference. The failure of the previous Conference was recognised: its objectives have been far from met. The commitments and goals contained within these two documents naturally refer to the eradication of poverty and the improvement in the quality of peoples' lives in LDCs to be achieved through "sustained economic growth" and "sustainable development". These texts stress that primary responsibility for development in LDCs rests with LDCs themselves as well as the importance of action on a national level, without however overlooking the need for support at an international level. They also approach development thematically, as mentioned above, in terms of good governance and the strengthening of production and institutional capacities, etc.
11. Known as the Brussels Declaration, this again picks up the earlier themes, but also centres on the fight against poverty and the improvement of the quality of human lives upon individuals, stressing the importance of human rights, gender equality, investment in social infrastructures, health and education. This explains the concern expressed by the countries present at the Conference for the fight against HIV/AIDS, as well as malaria and tuberculosis. The attachment of governments to the achievement of objectives set out in the Rio Declaration [Note 3], in particular with regard to combating desertification, the preservation of biological diversity, the supply of safe drinking water and climate change also reflects their interest in the welfare of people. These last points are no doubt in response to the wishes of LDCs for a more human approach to development programmes, and clearly seek to optimise the value placed on the human resources of these countries.
12. Governments once again underlined the importance of taking account of trade and economic growth in strategies to reduce poverty and committed themselves to seizing the opportunity of the Fourth WTO Ministerial Meeting in Doha (Qatar) to advance the development dimension of the multilateral trading system. The transparent, non-discriminatory nature of this system is deemed to be essential, and facilitating the accession of LDCs to the WTO desirable, echoing the demands of the LDCs themselves. Along the lines of the European "Everything but Arms [Note 4]" initiative, the governments declare their aim to improve preferential market access for LDCs to markets in developed countries, by working towards duty-free and quota-free access for their products. This is another matter which ought to be examined in more detail at Doha. Foreign direct investment is still considered to be an important source of finance, but the emphasis is more on domestic resources, and the governments therefore decided to seize 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".
13. In response to the matter of LDC external debt, participating countries centred their proposals around providing the financing of the Enhanced Highly Indebted Poor Countries (HIPC) Initiative. Some degree of flexibility will be possible with regard to the much-criticised application criteria, particularly for post-conflict countries and on the question of LDC debt sustainability. As for Official Development Assistance (ODA), the governments merely undertook not to spare any effort to reverse the current declining trends of ODA and to expeditiously meet the targets agreed at the previous Conference. They did, however, also undertake to implement the OECD recommendation on untying assistance to LDCs, an initiative which was generally well-received.
14. The Declaration in fact contains very few concrete commitments from governments on the issues that LDCs view as the most sensitive, and what commitments there are, have yet to be worked out in detail at future meetings or conferences [Note 5]. Above all, LDCs are encouraged to continue their efforts towards good governance, establishing the rule of law and democracy, fostering environments which are favourable to investment and savings, etc. Follow-up action will be discussed further on, but the UN Secretary-General has been requested to ensure that the Conference be followed up in an efficient and highly visible manner.
15. The Programme of Action for the Least-Developed Countries for the Decade 2001-2010, a document of 60 pages, is based on an "enhanced global partnership". It contains seven commitments, relating to action centred on people, good governance, strengthening human and institutional capacities, setting up production capacities, trade, reducing vulnerability, protecting the environment, and mobilising financial resources, which were accepted both by LDCs and their development partners, i.e. the more industrialised countries.
16. The objective of this partnership is to obtain "substantial progress towards halving the proportion of people living in extreme poverty and suffering from hunger by 2015" and to promote sustainable development in LDCs. These goals correspond to the "international development targets or goals [Note 6]" on combating poverty, education, gender equality, health, infant mortality, maternal mortality, and protecting the environment, recently laid down by the DAC-OECD. The programme is very ambitiously based on a GDP growth rate in LDCs of at least 7% per annum and a ratio of investment to GDP of 25% per annum. Every LDC will be required to implement the measures detailed in the Programme of Action within the framework of its own national policies, and will receive support from its development partners through cooperation, highlighting the principle of mutual responsibility shared by the community as a whole.
17. Trade is dealt with under commitment 5 entitled "Enhancing the role of trade in development". The commitments made by the LDCs and their development partners are described in paragraphs 65 to 72 of the Programme and are divided into three parts: the first concerns trade, primary commodities and regional agreements, the second refers to services and the last considers how to reduce the impact of external economic shocks. This part once again stresses the responsibility of LDCs (and their development partners) in making external trade a means of stimulating growth and combating poverty, enabling them "to really benefit from globalisation". The accent is once more on an integrated approach, including factors such as "trade policy and macroeconomic policy, developing the private sector, improving financing, the infrastructure and education, as well as other supply-side measures". In addition, emphasis is placed on the adoption of coherent action by the UN, the Bretton Woods institutions and the WTO, in parallel with the actions of national governments. Closer cooperation is seen as an essential precondition to reforming the whole of the multilateral trading system.
18. Regarding the measures relating to trade, primary commodities and regional agreements (par. 66-68), LDCs are also required to strengthen their human and institutional capacities and those relating to trade policy, to improve their economic openness and to remove procedural and institutional bottlenecks that hamper transactions, etc. [Note 7]. These commitments bring little that is new to the economic development arena and are couched in very general terms. The emphasis on promoting regional and sub-regional cooperation, which constitutes an important stepping stone towards integrating LDCs into the global economy, should also be noted. Likewise, the Programme insists on diversifying production, including the transformation of primary commodities, which obviously poses the problem of tariff peaks and tariff escalation, not to mention non-tariff barriers to export.
19. As for development partners [Note 8], their role is to support LDCs in the above-mentioned areas. Regarding access to markets, development partners should take steps to improve preferential access for LDCs, the objective being to achieve duty-free and quota-free access. Whilst the European Union is already committed to such measures within the framework of its "Everything but Arms" initiative, the other Big Four members (i.e. Canada, the United States and Japan) have not yet decided to follow suit, although other countries have made similar undertakings. This preferential access should also be accompanied by simplified rules of origin. Section i) and those following of paragraph 68 deal with special and differential treatment and provide for the full implementation of the related measures contained in the Final Act of the Uruguay Round as a matter of priority, together with increased support to enhance agricultural production and technical assistance for the implementation of WTO Agreements or future trade agreements. Section o) of the same paragraph refers to the important issue of accession to the WTO, and allows for facilitating the accession process for LDCs, taking into account the level of development of the country seeking to join. Upon joining, LDCs would automatically benefit from all the measures allowing special and differential treatment, and the commitments required of them should correspond to their level of development. These measures have long formed part of LDC demands.
20. Sections p) to s) deal with standardisation and quality control of products originating from LDCs, which are often seen as impeding access to markets in industrialised countries. Although they contain no firm commitment corresponding directly to LDC concerns, provisions have been made for supporting the participation of LDCs in international bodies where these standards are negotiated, and to help in the setting up of the necessary infrastructures.
21. Commodities are dealt with under sections t) to bb). Naturally, the main problem concerning these products is the downward swing in the prices of primary commodities, aggravated by the fluctuating price of oil products. Unfortunately no measure actually provides a mechanism enabling LDCs to handle the drop in price of primary commodities except perhaps section aa) which encourages development partners to provide compensatory financing to mitigate adverse consequences of price volatility. The remaining measures provide support and technical assistance to diversify production, reinforce production capacity, and for research, including developing the transformation of primary commodities.
22. The Integrated Framework and other trade-related technical cooperation is tackled in section ee) and following. It mostly revolves around implementing the Integrated Framework and encouraging additional contributions. As stated in our previous Background Note [Note 9], this is more in response to the concerns expressed by the agencies involved. Parties are encouraged to continue to implement other technical assistance programmes, and integrate this assistance into national government strategies.
23. The services sector, and particularly tourism, is becoming more and more important, and LDCs are therefore encouraged to develop their capacities, their infrastructure and their institutional framework in this area, and to foster the creation of new services using Information Technology. Their development partners should support the efforts of LDCs and above all respect the relevant WTO Agreements concerning removing restrictions and enhancing access opportunities to their markets.
24. Part C of commitment 5 deals with reducing the impact of external economic shocks. There are plans for a certain number of general measures to be adopted by LDCs, such as diversifying into economic activities that are less prone to external disturbance or developing safety nets to protect the more vulnerable segments of the population from these disturbances, whereas development partners are called upon to continue providing emergency financial assistance to deal with the consequences of these disturbances. There is, however, no mention of the NGO Forum project calling for the establishment of a fund to compensate for crises affecting goods in international markets.
25. The financing of measures foreseen in the Programme of Action is covered in paragraphs 78 to 91 which constitute the 7th commitment of the Programme entitled "Mobilising financial resources". This part deals with the measures for mobilising internal resources, but in addition considers the issue of aid and how efficient it is. LDCs are mainly required to institute systems to verify and coordinate ODA. As stated earlier, donor countries have merely repeated their commitment to apply the measures they had already agreed to during the second United Nations Conference on the Least-Developed Countries, i.e. for donor countries already devoting 0.20% of their GNP as ODA to continue doing so; for countries having met the 0.15% target to reach 0.20% expeditiously; for those committed to reach 0.15% to do so within 5 years or accelerate their efforts to meet this objective. One should, however, mention that donor countries have actually agreed to implement the OECD-DAC recommendation to untie aid to LDCs (par. 84, section a), as this is considered to be a significant advance. With regard to the LDC external debt (par. 85 and following), the talk is mostly of lightening the burden, mainly by implementing and financing the enhanced HIPC initiative, a long way still from straightforward debt cancellation.
26. Other Programme commitments contain measures concerning the transfer of technology towards LDCs, such as section c) of paragraph 50 (Commitment 4: Building productive capacities to make globalisation work for LDCs) which envisages special treatment for LDCs to facilitate the transfer of technology, or section f) which advocates full compliance with multilateral agreements in the area of technology transfer, including art. 66.2 of the WTO TRIPS Agreement [Note 10].
27. These commitments are praiseworthy and some, though far from all, take up the demands of LDCs. They are, however, only programming measures based on loose frameworks and the arrangements for implementing and following up the commitments made in Brussels will therefore play a crucial role in avoiding a repetition of past failures.
28. The arrangements for "implementation, follow-up, monitoring and review" are placed at three levels: national, regional and sub-regional, and global. At the national level, the suggestion is to create national consultation mechanisms which would guarantee consensus and cooperation between all the agents involved in development, whilst the examination procedure for each country would be carried out by the existing World Bank and UNDP bodies. At the regional and sub-regional level, the UN regional economic commissions would be responsible for the actual monitoring, with banks and other regional organisations contributing together to the objectives of the programme, taking into account the difficulties and particular needs of individual LDCs.
29. At a global level, the relevant bodies of the United Nations system and those of other intergovernmental organisations are encouraged to take on the additional task of implementing the Programme of Action. The Economic and Social Council (ECOSOC) should prepare for and place on the agenda of its annual meetings the review of the implementation of the Programme of Action, as well as undertake a regular review of the Programme during its high-level debate. The subject of the Council's high-level debate which took place from 16 to 18 July 2001, was the "Role of the United Nations system in supporting the efforts of African countries to achieve sustainable development"; LDCs as such were not really discussed, except during the African Forum to promote investment on 16 July - when only African LDCs were concerned by the debate.
30. The General Assembly should also place the implementation review on its agenda, carry out a global review of the Programme of Action at a date yet to be determined, and lastly consider convening a fourth conference by the end of the decade to carry out an overall evaluation. It will be the responsibility of the Secretary-General to submit recommendations concerning the implementation of an efficient and highly-visible follow-up mechanism to the General Assembly during its 56th session in September 2001. He has also been asked to consider transforming the current Office of the Special Coordinator for the Least-Developed, Land-locked and Small Island Developing States into an Office of High Representative for Least-Developed, Land-locked Developing Countries and Small Island Developing States. This last proposal does not, however, seem to meet with universal approval.
31. At the close of the Third United Nations Conference for the Least-Developed Countries, opinions regarding its outcome ranged from optimism to dissatisfaction. A number of initiatives were announced or taken, particularly during the course of the year preceding the Conference, such as the European "Everything but Arms" initiative, the OECD recommendation concerning the untying of official development aid or the announcement of the cancellation of some debts. However, many of the commitments made during this Conference are not very innovative, merely restating oft-repeated LDC demands or reiterating earlier commitments which have not been adhered to. Couched in very general terms, they also refer matters to forthcoming conferences. Thus, the LDCs and all other countries are invited to the next WTO Ministerial Meeting in Doha, from 9 to 13 November 2001. The LDCs' reservations concerning fresh negotiations, which they restated during the meeting of trade ministers in Zanzibar at the end of July 2001, and their constant demands for the respect and implementation of the measures which came out of the Uruguay Round, cast serious doubt on the outcome of this kind of undertaking.
32. The Conference is seen more as a first step, "one tool amongst many", part of a new way of approaching the issue of development. Gathering together all the agents involved in development, and broadening the remit to include civil society and the private sector has generated useful debate and discussions on concrete issues. However, only effective implementation, not commitments made in Brussels, will enable the real effectiveness of the Conference to be judged, which means waiting for the ECOSOC meetings and the recommendations of the UN Secretary-General.
Note 1 : Regarding the NGO Forum, see their Internet site: http://www.oneworld.org/liaison/forum/. (return to text)
Note 2 : A/RES/55/2, adopted on 8 September 2000 during the Millennium summit. (return to text)
Note 3 : A/CONF.151/26 (Vol. I), Rio Declaration on Environment and Development, United Nations Conference on Environment and Development, held in Rio de Janeiro from 3 to 14 June 1992. (return to text)
Note 4 : Other countries have committed themselves to taking similar measures, including Norway, New Zealand, Morocco and Hungary. (return to text)
Note 5 : Indeed, with regard to development and international trade, the LDC Conference refers matters to the Fourth WTO Ministerial Conference to be held in November 2001. In a similar fashion, as mentioned earlier, the question of how to finance development will be broached at Monterrey in 2002. The proliferation of conferences, as well as the coming Fourth WTO Ministerial Conference, may go some way towards explaining the lack of firm commitments made during the LDC Conference. (return to text)
Note 6 : The expression "international development targets" was first used by the Development Assistance Committee of the Organisation for Economic Co-operation and Development (DAC-OECD) in a 1996 report entitled "Shaping the 21st Century: The Contribution of Development Co-operation". They refer to seven goals, to be reached between 2005 and 2015, picked out from United Nations conferences held during the early 1990s. (return to text)
Note 7 : see paragraph 67 sections a to k. (return to text)
Note 8 : see paragraph 68 sections a) to ii). (return to text)
Note 9 : "Preliminary assessment of the first draft of the Programme of Action for the LDCs for the Decade 2001-2010", 22 January 2001(return to text)
Note 10 : The WTO Agreement on Trade-Related Aspects of Intellectual Property Rights. See also part F of the same commitment, par.60 ii) section b which foresees that development partners will help LDCs to increase the transfer of environmental technologies under favourable conditions. (return to text)