Statement of the UN Special Adviser on African and High Representative for the Least Developed Countries, Landlocked Developing Countries and Small Island Developing States, Mr Cheick Sidi Diarra, at the High-level Workshop on “Trade and Development for Africa’s Prosperity: Action and Direction”.
Ladies and gentlemen.
The theme of this high-level workshop is “Trade and Development for Africa’s Prosperity: Action and Direction.” As you are aware, the majority of LDCs – 33 out of 49 – are in Africa. At the same time, the African LDCs represent more than half the continent. Consequently, what happens in the African LDCs has wide-ranging implications for the LDCs as a group and for Africa as a continent. Any discussions of the “action and direction” needed to promote trade and development for Africa’s prosperity should, therefore, pay sufficient attention to the situation of the African LDCs.
African LDCs are experiencing a major social transformation, with high rates of urbanization, which, regrettably, are not matched by a commensurate increase in job creation. The underlying problem, as many experts have observed, is that economic growth is taking place without development in terms of structural transformation and broad-based change in the human condition. Though annual rates of economic growth in African LDCs have averaged 5 percent in the last five years, they are still below what is needed to reach the Millennium Development Goals. Questions also remain about the sustainability of rates of economic growth seen in recent years, given that they have been largely driven by higher commodity prices.
Economic growth has not been particularly inclusive. It has not had a significant impact on job-creation and poverty reduction. While African LDCs have, in recent years, attracted higher and higher amounts of Foreign Direct Investment (FDI), this has not usually translated into concrete employment generation. Much of the Foreign Direct Investment has gone into the extractive industry, particularly oil, which is capital-intensive and whose capacity to create employment is therefore limited. The biggest employment sector in the majority of LDCs – agriculture – continues to attract little foreign, and in many cases, domestic investment. Moreover, compared with other developing regions, the amount of Foreign Direct Investment attracted by African LDCs, especially the non-oil producing LDCs, remains minuscule. The result is that the prospects of reaching the targets of the Millennium Development Goals by 2015 in the LDCs are quite dim. Not only that, but the presence of a large, young population without jobs could, in many of the LDCs, become a major source of political instability and conflict, further exacerbating an already difficult situation.
As we noted at the Istanbul Conference, the LDCs continue to face daunting structural constrains. Insufficient financial resources, inadequate physical and social infrastructure, lack of skilled human resources and weak institutional capacities, not to mention the challenge of HIV/AIDS, malaria and tuberculosis, inhibit their growth and jeopardise their sustainable development. New challenges, including rising food prices, the effects of climate change and increasing brain drain compound the situation even further. Given the magnitude of these constraints, trade preferences and other forms of preferential treatment become very critical in jumpstarting LDCs’ participation in the global economic system. While this need is appreciated by the international community, the political commitment to carry it through remains insufficient. For example, the tentative Doha Round agreement on preferential market access for LDCs and similar arrangements notwithstanding, a number of products that are of great interest to the LDCs remain locked out of important markets. Moreover, important as they are, preferences must be matched with measures to help the LDCs to take full advantage of those preferences. In this connection, measures like the Enhanced Integrated Framework for Trade-related Technical Assistance must be effectively implemented. It is commendable that the Government of Turkey is actively supporting the Enhanced Integrated Framework.
In the case of the African LDCs, support of the international community to the New Partnership for Africa’s Development is important in enabling those countries to take their rightful place in the global economy. Investing in NEPAD’s priorities – particularly infrastructure, agriculture, human development and the environment – would go a long way in eliminating the major constraints to trade, development and poverty reduction in Africa. Through the Brussels Programme of Action for the Least Developed Countries, the international community has committed itself to specific targets in assisting the LDCs carry out the necessary reforms and investments in those same areas. But annual reviews by the United Nations have shown major implementation gaps which must be filled if the LDCs are to get out of the current development quandary.
Regional integration is vital for promoting trade and development in the African LDCs. Although there are about 30 regional groups in Africa, intra-African trade remains quite low at less than 10 percent, partly due to infrastructural and regulatory constraints. There cannot be global integration without regional integration. The expansion of regional trade does not only bring immediate economic benefits to the countries involved, but it also helps them improve the competitiveness of their goods and services at the global level. More international assistance should therefore be directed at facilitating regional trade among LDCs and their neighbours.
Mr. Chairman, distinguished participants,
Though the general picture of African LDCs remains less bright than we would all want it to be, these countries have shown a resilience and dynamism that should be a good reason for hope. Coupled with the growing support of the international community, both from the countries of the North and the emerging partners from the South such as Turkey, I have every confidence and expectation that with more determined efforts, the African LDCs will take their place in the global economy.
I thank you for your attention.