3 OCTOBER 2002

Mr. Chairman,

       I wish to thank you for providing me this opportunity to introduce sub-agenda item 84(f) on specific actions related to the particular needs and problems of landlocked developing countries and the preparations for the international ministerial meeting on transit transport cooperation. For this agenda item the committee has before it the report of the Secretary-General contained in document A/57/340.

       The basic developmental disadvantages of landlocked developing countries are linked to their geographical handicap. The lack of sovereign access to the sea, remoteness from major international markets and sources of supply, inadequate transport infrastructure and the cumbersome procedures imply that these countries have to bear additional transport costs. Their transit neighbours in most cases are themselves  developing countries which lack financial resources to develop efficient transit transport systems.

      The particular needs and problems of landlocked developing countries are reviewed in section II of the report of the Secretary-General. I see no need to elaborate on them in detail. However, I believe, it is important to say a few words on the impact of high transit transport costs on the trade and development pattern of landlocked developing countries. Landlocked developing countries use a far larger share of their foreign exchange earnings to pay for international transport services than other developing countries do.
This contributes to the slow growth of their exports, increases prices of imported inputs and limits the ability to gain from trade. High transport costs faced by landlocked developing countries often place their exporters at serious competitive disadvantage. According to estimates based on the IMF balance of payment statistics for 1995,
on average landlocked developing countries spent almost two times more of their export earnings for the payment of transport and insurance services than the average for developing countries and three times more than the average of developed economies.

Mr. Chairman,

High transport costs erode the competitive edge of landlocked developing countries and trade volume. The trade reducing effect is strongest for transport intensive activities that are dependent on exports or imported intermediate goods for production.
Most landlocked developing countries, if not all, are commodity exporters.
Therefore, any landlocked country is extremely sensitive to any increase in transport costs. Professor Jeffrey Sachs recently emphasized the developmental effects of high transport costs arguing that 5 percent increase in a country’s c.i.f./f.o.b ratio reduces the share of manufactured exports in GDP by around 0.2 per cent per annum.

 The international community is undertaking measures to address transit transport problems of landlocked and transit developing countries. These efforts include financial assistance in transport infrastructure by the World Bank, regional development banks, and bilateral assistance programmes; multilateral and bilateral technical assistance projects; trade facilitation measures promoted by UNCTAD, regional commissions, WTO and other relevant international, regional and professional organizations. The report described these measures in sections III and IV. Landlocked and transit developing countries have continued to make significant investment in the infrastructure development, subject to availability of financial resources.

Mr. Chairman,

       The transit problems of landlocked developing countries have been generating serious interest at the United Nations and other international fora in recent years. This has coincided with the astounding growth in both international trade and trade facilitation efforts. The Millennium Declaration calls for a global partnership to address the special needs of landlocked developing countries. In addition, addressing specific problems faced by the least developed, landlocked and small island developing countries is recognized as one of the key targets for achieving Millennium Development Goals. The decision by the General Assembly to convene in 2003 an International Ministerial Meeting on Transit Transport Cooperation reflects the priority accorded by the international community to addressing the development challenges of landlocked developing countries.
Also, landlocked and transit developing countries in Africa, Asia and the Latin America have moved the transit issue higher on their priority list. The Ministerial Meeting would provide the international community with a unique opportunity to galvanize international solidarity and partnership to assist landlocked developing countries to effectively participate in the international trading system, through establishing efficient transit systems. Transit system is the area where the international community would achieve tangible progress with modest investment.

Mr. Chairman,

 The progress in the preparatory process for the International Ministerial Meeting is dealt in Section V of the Secretary-General’s report. The Third Annual Ministerial Meeting of Landlocked Developing Countries convened on 17 September this year adopted the Ministerial Communiqué on substantive and organizational aspects of the Ministerial Meeting. In this Communiqué, the Ministers strongly emphasized that the International Ministerial Meeting should adopt a global programme of action with a view to minimizing constraints caused by the lack of territorial access to the sea,
geographical remoteness and isolation from world markets, high economic development cost and by prohibitive transit costs. This should contribute to the speedy attainment by the landlocked developing countries of the United Nations goals and targets on poverty eradication, sustainable development as well as their effective participation in the world economy.

The Ministers also expressed the view that as the first United Nations conference of this kind, the outcome of the Ministerial Meeting would be judged against its success in generating high visibility to the particular needs and problems of landlocked developing countries, building up a global consensus on policies and measures to establish efficient transit systems, and mobilizing strong international support to landlocked developing countries and their transit neighbours in achieving the above objectives. The Ministers also emphasized the importance of mobilizing voluntary contributions to facilitate the preparatory process for the Ministerial Meeting.

In this context, on behalf of the Secretary-General of the United Nations, I have launched a campaign, together with the Secretary-General of UNCTAD, to mobilize voluntary resources to facilitate the preparatory process for the International Ministerial Meeting and the participation of landlocked and transit developing countries at the preparatory meetings and the conference itself.  I wish to take this opportunity to call upon member States, in particular donor countries and relevant international organizations to consider favourably making contributions to the trust fund established for this purpose.

Consultations have been continued with the relevant stakeholders including the regional commissions, the regional development banks and the World Bank. 
Last Monday, for example, I had very useful consultations with the senior officials dealing with transport development and trade issues at the World Bank,
including transport sector managers for Europe and Central Asia, Africa, Latin America and Asia and the Pacific as well as the officials of transport logistics department. I was encouraged by the strong interest and willingness of the World Bank to contribute to the preparatory process and ministerial meeting.

Mr. Chairman,

In conclusion, I wish to say a few words regarding the venue and date of the Ministerial Meeting. The Secretary of State and the Minister for Foreign Affairs of Kazakhstan formally offered, in his statement at the General Assembly session, to host the International Ministerial Meeting in Almaty. I have also continued consultations on specific dates for the preparatory meetings and the Ministerial Meeting.  From these consultations, I understand that late June 2003 for the first preparatory meeting, and late August 2003 for the Ministerial Meeting, are broadly supported by member States and major groups. I hope the General Assembly will take an appropriate decision on the date and venue of the International Ministerial Meeting as well as the relevant aspects of the preparatory process. 

I thank you Mr. Chairman.