It is a great honour to address today the Trade and Development Board of the United Nations Conference for Trade and Development (UNCTAD). As you know, the Office of the High Representative for the Least Developed Countries, Landlocked Developing Countries and Small Island Developing States was established in 2002 but it is the first time that the High Representative is given a privilege to address this body. I see this as a historic event and a new stage in our cooperation.
The Programme of Action of the Least Developed Countries for the Decade 2001-2010 aims at making substantial progress toward halving the proportion of people living in extreme poverty and suffering from hunger by 2015 through accelerated, sustained and inclusive growth. Last year, halfway through its implementation the General Assembly undertook is comprehensive review. This midterm review concluded that despite some progress, “the overall socio-economic situation in the least developed countries continues to be precarious… and many least developed countries are unlikely to achieve the goals and objectives set out in the Programme of Action”. It further recognized that “the situation in the least developed countries requires continued attention”.
This year’s annual progress report of the United Nations Secretary-General on the implementation of the Programme shows that strong economic performance of LDCs which began at the end of 90s continues and social indicators are also improving due to international support, but overall socio-economic progress has been compromised by high population growth and malnutrition appears to be worsening, particularly in African LDCs, where rain-fed agriculture can hardly keep up with rapid population growth, environmental degradation and climate change.
The high-level meeting on climate change convened by the Secretary-General on 24 September 2007 has shown that climate change has emerged as a new challenge to socio-economic development of LDCs, in particular those in Africa and small island LDCs who are less responsible for climate change but are hit the hardest by its adverse impacts due their limited ability to predict, mitigate and adapt to the climate change. In recent floods alone a 1 million people have been hit in Africa displacing hundreds of thousands of people in countries like Uganda, Sudan and Ethiopia. Heavy terrestrial rains hit even Mali, Mauritania and Niger, usually prone to droughts, creating high risk of cholera and malaria outbreaks, raising fears of locusts and crop losses. Annual floods in Bangladesh result in millions of dollars of economic loss and claim thousands of lives. In the worst in six years, the flood in Bangladesh this year killed over 600 people and left nearly 30 million people homeless.
Lethal combination of drought, high oil prices and climate change has caused disruption of food supplies and food shortages in a number of LDCs, making millions of people dependent on food aid. Breaking the vicious cycle of poverty-hunger calls for the adaptation of agriculture to climate change and broad based agricultural grown underpinned by increased agricultural productivity. This requires conducive macroeconomic and trade policies, improved infrastructure and access to credit, land and markets. They, in turn, will create incentives for the adoption of new and sustainable technologies and diversification of production into higher-value crops, raise household incomes and reduce poverty. They will also increase competition among input (seeds and fertilizers) suppliers, encourage private entrepreneurship and create employment opportunities in both farm and non-farm sectors. Elimination of trade barriers and export subsidies and the reform of food aid programmes is also an integral part of the reform of the agricultural sector in LDCs.
Improving food security in LDCs also needs addressing demographic challenges. It is expected that at the current fertility rate, the population of LDCs could surpass 2.7 billion by 2050 and could still reach 1.7 billion, at the reduced fertility rate. This dramatic increase will be accompanied by the change of the population structure when the share of adult population of working age due to increase of longevity of life of adults and decline of child mortality will increase from 53 per cent in 2007 to 61 per cent in 2050. The bulge of adult population can deepen malnutrition and poverty in LDCs but can also provide them with a window of opportunity for increasing productivity, generating wealth and improving living conditions of the poor. .However, reaping this “demographic dividend” requires creating productive employment for new entrants of the labour market.
The new South trade provides another window of opportunity for commodity dependent LDCs. Commodity trade can stimulate sustained growth and contribute to poverty reduction, provided that trading policies at the national, regional and international levels take into account the special needs of LDCs and technical assistance to commodity producers in LDCs is aimed at strengthening their trading capacity and competitiveness.
Income differences, proximity and community ties (ethnic, linguistic, religious, family) are major drivers of South migration. South remittances to LDCs exceed North-South remittances despite high transaction costs due to lack of competition in the remittances market and high foreign exchange commissions at both ends of transaction. Enhancing impact of remittances on poverty reduction is one of the greatest challenges faced by the LDCs in their development.
In short, LDCs face many challenges in their development but they have also many opportunities. Whether LDCs will be able to seize these opportunities will depend on many factors. The upcoming twelfth session of UNCTAD (UNCTAD XII) “Globalization for development: opportunities and challenges” will enable us to explore all possible options for addressing new and emerging challenges, identifying opportunities and defining the ways of reaping the benefits offered by globalization and improving the livelihoods of millions of poor people around the world, particularly in the LDCs.
I am looking forward to work closely with the UNCATD Secretariat on the preparation of this event, to ensure its smooth organization and successful outcome.