Transcript International support measures and financial resources for LLDCs Gladys Mutangadura UN-OHRLLS UN-OHRLLS Special needs of LLDCs • Investment in development and maintenance of hard infrastructure • Investments soft.

International support
measures and financial
resources for LLDCs
Gladys Mutangadura
UN-OHRLLS
UN-OHRLLS
Special needs of LLDCs
• Investment in development and maintenance of
hard infrastructure
• Investments soft infrastructure
• Enhance trade - productive capacities, value
addition, diversification, global value chains,
• Enhance trade in services
• Enhance Human and institutional capacity building
• Enhance regional integration
• Mitigate and build resilience to climate change,
desertification, and economic shocks.
UN-OHRLLS
Support Measures to LLDCs
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ODA
Aid for Trade
FDI
Market Access
Debt relief
South-South Corporation
Technical assistance/advisory services,
capacity building support
• Technology transfer
• Innovative sources of funding
• Remittances
UN-OHRLLS
Official Development Assistance (ODA)
30000
25000
20000
15000
10000
5000
0
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
All LLDCs
African LLDCs
UN-OHRLLS
Aid for Trade ($ millions)
7000
6000
5000
4000
3000
2000
1000
0
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
All LLDCs
African LLDCs
UN-OHRLLS
ODA
• ODA to LLDCs and African LLDCs more than
doubled between 2000-2010, from $11 to $25.1
billion (in real terms)
• But fell by 3.2% in 2011
Challenges
• Further tightening of donor budgets
• Unequal concentration within LLDC group
• High aid-dependency: 6 of the African LLDCs
relied on ODA for at least 20% of the central
government expenditure between 2003 and 2010
UN-OHRLLS
Need to enhance the quantity, quality and
impact of ODA for LLDCs
• Need for increased ODA and aid for
trade to LLDCs –particularly for
infrastructure development
• Integrate and align ODA with the
national plans and priorities of LLDCs
• Donors should strive to improve the
distribution of ODA across LLDCs,
based on country-specific priorities and
needs of the recipient countries.
UN-OHRLLS
FDI ($ millions)
40000
35000
30000
25000
20000
15000
10000
5000
0
2000
2001
2002
2003
2004
2005
All LLDCs
2006
2007
2008
2009
2010
2011
2012
African LLDCs
UN-OHRLLS
FDI inflows to African LLDCs
• African LLDCs are poor destination of FDI
• Only 2 resource-rich African LLDCs received more than $1billion in
2012; in 6 African LLDCs FDI declined (2011-2012)
• Majority of FDI to LLDCs is in extractive industries
ACTIONS
• LLDCs should create a conducive business environment to attract FDI –
Macro-economy; regulatory framework; governance; infrastructure
• Promote use of FDI to support local processing; value addition,
infrastructure development, trade facilitation and technology transfer.
• International community should support LLDCs to improve their abilities
to enter into investment agreements including with PPPs.
• International and regional financial institutions, should continue to
strengthen their efforts to help LLDCs put in place the appropriate
incentives for enhancing private flows
• International community should facilitate additional private flows to
LLDCs
UN-OHRLLS
Debt Relief
• Debt burden of African LLDCs has declined
substantially in the last decade, mainly as a result
of the HIPC Initiative and the MDRI.
• Debt servicing ratios have also declined in a
majority of LLDCs.
• It is important to be on the lookout and to extend
some form of debt relief assistance to LLDCs that
are experiencing high debt burdens in order to
prevent them from entering into unsustainable
debt situations.
UN-OHRLLS
External debt stock (% of GNI)
Burundi
Zambia
Malawi
Central Afr.
Ethiopia
Rwanda
Zimbabwe
Niger
Uganda
Mali
Chad
Lesotho
Burkina Faso
Swaziland
Botswana
2011
2003
0.0
50.0
100.0
150.0
200.0
UN-OHRLLS
Preferential Market Access
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No preferential market access scheme specifically for LLDCs
Developed and some more developing countries extend preferential
market tariff treatment to LLDCs’ exports under the Generalized
System of Preferences (GSP) and special schemes such as African
Growth and Opportunity Act (AGOA) – not necessarily targetted to
LLDCs
ACTIONS
•
Consider establishing a preferential market access scheme for
LLDCs exports to mitigate high trade transaction costs
stemming from their geographical disadvantages.
• Apply transparent and development-friendly preferential rules
of origin to increase the utilization rate of current schemes and
serve as an additional incentive for FDI in LLDCs.
• Negotiations under Doha Development Agenda - should aim
for improved market access for agricultural and non
agricultural export products of LLDCs.
UN-OHRLLS
South-South Corporation
• South-South and triangular cooperation important for
overcoming the infrastructural, institutional, technological
and other challenges
• For example, corporations from the global South, in
particular from China and India, accounted for 41 per cent
of FDI to LLDCs in 2011.
• Southern providers accounted for 47 per cent of official
infrastructure financing in sub-Saharan Africa between
2001 and 2008.
• South-South trade has expanded rapidly and developing
countries now export more to the South than to the North.
ACTION
• Foster South-South cooperation through sharing of best
practices and experiences and knowledge, increased
investment, transferring of appropriate technologies etc
• Accession and implementation of supportive agreements
UN-OHRLLS
Technical assistance/advisory services,
capacity building support
• UN, regional commissions, multilateral institutions including
WTO, World Bank, donors, regional development banks, and
some sub-regional organizations have provided support:
• Advocacy
• Resource mobilization
• Technical assistance/Capacity building (human
and institutional)
• Infrastructure development
• Specific studies
Trade negotiation, WTO accession, industrialization, trade facilitation,
infrastructure development, development and implementation of legal
instruments etc.
ACTION
• Need to continue and enhance the support.
UN-OHRLLS
Enhanced Regional integration
• Increased economies of scale
• Improve regional infrastructure networks; and connectivity
of LLDCs
• Improved trade facilitation through adoption of common
regulatory policies, harmonizing of policies, programmes
and customs procedures
• Promote development of regional technology centers and
regional networks of excellence;
ACTIONS
Provide support to regional integration processes.
UN-OHRLLS
Innovative sources of funding
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Explore innovative funding
Regional infrastructure funds
Infrastructure PPPs
Diaspora bonds
 Remittances have increased from $1 Billion in 2003 to
$3.2 Billion in 2012 for African LLDCs equivalent to 23%
of ODA.
 Enhance remittances - Home and host countries need to
lower transfer costs
 Channel remittances into productive use – eg.
Infrastructure and co-development schemes,
entrepreneurship and develop incentive schemes for
development projects (e.g., matching grants)
UN-OHRLLS
Way Forward
• Increase financial support to LLDCs, including through
ODA, Aid for Trade, and South South Co-operation
• Support and encourage FDI flows to LLDCs.
• Ensure enhanced and predictable market access for
LLDCs products.
• Consider establishing a preferential market access
scheme for LLDCs exports.
• Technical and capacity building assistance need to be
increased.
UN-OHRLLS
Thank you
UN-OHRLLS