Fifty-ninth General Assembly

Second Committee

29^th & 30^th Meetings (AM & PM)

speakers in second committee underscore need for developed world

 

to help countries with special needs overcome challenges

Delegates Highlight Obstacles Facing

Least Developed, Landlocked Developing Countries

The developed world must honour its commitments to help least developed and landlocked developing countries –- “the poorest of the poor” -– overcome such insurmountable obstacles to development as high transport costs, shoddy infrastructure and low foreign investment, speakers said today as the Second Committee (Economic and Financial) considered the plight of countries in special situations.

Anwarul Chowdhury, Under-Secretary-General and High Representative for Least Developed Countries, Landlocked Developing Countries and Small Island Developing States, noted that high transport costs in landlocked developing countries (LLDCs) -– which came to 13 per cent of the value of their exports -- diminished the profits from those exports, inflated the price of imports and discouraged export-oriented private capital.  According to the United Nations Conference on Trade and Development (UNCTAD), the LLDCs had received foreign investment flows of $7.9 billion in 2003, or just 1.4 per cent of the world total, which had gone mainly to oil exploration in a few of those countries.

Future assistance to the LLDCs should focus on improving market access, increasing investment in infrastructure, and making regulatory and institutional systems more efficient, he said.  The LLDCs also desperately needed to tighten cooperation with their transit neighbours and push through reforms to reduce transport costs by commercializing and freeing up transport services.  They should set up national trade facilitation boards to bring together public and private stakeholders in establishing better trade systems and transit support.

Similarly, the representative of the Lao Democratic People’s Republic said that high transport costs had cut into their trading competitiveness, while unreliable transport facilities had often meant higher storage prices and frequent losses of perishable goods.  Speaking on behalf of the Group of Landlocked Developing Countries, he called on donor and development partners to support the LLDC efforts to implement the Millennium Development Goals and contribute generously to the Trust Fund for the LLDC follow-up to the 2003 Almaty Programme of Action, which focused on the LLDC needs.

Addressing the question of least developed countries (LDCs), Mr. Chowdhury observed that they also suffered from a severe lack of access to global trade, garnering only 0.6 per cent of it in 2002.  In the same year, official development assistance (ODA) to the LDCs had increased only slightly to $15.1 billion, while foreign direct investment (FDI) had declined from $5.6 billion to $5.2 billion.  The LDCs had failed to reap the benefits of globalization, trade liberalization, FDI growth, increased cross-border flows of goods, services and people, and the transfer of knowledge, technology and information.

He added that LDCs must increase their respective gross domestic product by 7 per cent and boost investment by 25 per cent annually to break out of the poverty trap.  Expenditure of the ODA on economic infrastructure and productive sectors had plummeted between 2000 and 2002, although infrastructure was vital for growth in trade and productivity.  While the extension of the Heavily Indebted Poor Countries (HIPC) Debt Initiative until 31 December 2006 was laudable, the LDCs desperately needed full debt cancellation.

Benin’s delegate, speaking on behalf of the Group of Least Developed Countries, observed that the 2001 Brussels Programme of Action had only been weakly implemented three years after its adoption.  If that trend continued, the LDCs would be far from achieving agreed development goals by the end of the present decade.  The international community should arrange to designate a point person for each of the Programme’s seven commitments in order to stimulate implementation efforts; call a mid-term implementation review; and review the progress achieved in meeting the LDC goals at the General Assembly’s 2005 high-level event on the Millennium Development Goals.

Several speakers stressed the need to focus on the LDC and LLDC needs in the current Doha round of trade negotiations at the World Trade Organization (WTO).  The LLDCs, they pointed out, would benefit from the the WTO’s recently formed Negotiating Group on Trade Facilitation and the WTO negotiations on market access.  Other speakers noted that the recent launching of negotiations to clarify and improve the WTO rules on transit was a golden opportunity to negotiate new provisions to benefit the LLDCs.

Also today, the Committee heard a keynote address by Jeffrey Sachs, Director of The Earth Institute at ColumbiaUniversity and Special Advisor to the United Nations Secretary-General on the Millennium Development Goals stressed that the future would be bleak if the international community failed to achieve its only shared set of goals.  In all areas of concern –- from the inability to grow enough food, to deaths from malaria and AIDS, and young girls dropping out of school -- research had uncovered practical ways of phenomenally improving people’s lives.  Those efforts would make the difference between failure to achieve the goals or some success in halving extreme poverty by 2015.  But the Millennium targets were not enough in themselves.  The world had the capacity to eliminate poverty completely by 2025.

Emphasizing the existence of practical and inexpensive interventions to end massive suffering and death, which simply required that the international community make good on its already agreed commitments, he recalled that at last July’s Summit of the Group of 8 industrialized nations, the United Kingdom’s Chancellor had promised to put those concerns at the top of the agenda, calling for a doubling of development assistance.  The year 2005 should and would be a breakthrough year in achieving the Millennium Development Goals.

During the ensuing question-and-answer period, he said that France, the United Kingdom, Belgium, Ireland, Spain and Finland had committed to meeting the ODA targets, and that, hopefully, the European Union as a whole would attain the target of earmarking 0.7 per cent of gross domestic product for the ODA in the course of the coming decade.  There was hope that by 2015, all donors would reach that amount, and that big European Union countries that had not yet done so would join what was becoming a Europe-wide effort to meet international targets for development assistance.

As for how developing countries could overcome the trade barriers inhibiting their abilities to export, he said the global trading system was relatively open, but that trade rules governing a few key commodities in commodity-dependent developing countries were abusive and unfair.  While developing countries needed more open markets and the resources to create basic infrastructure, markets were systematically designed to ignore the poorest people.  Non-market approaches were needed to help bring people up to a level where they could participate in the market.

Other speakers today included representatives of Qatar (on behalf of the Group of 77 and China), Netherlands (on behalf of the European Union and associated States), China, Norway, Bangladesh, Azerbaijan, Zambia, Burkina Faso, Mali, Japan, Nepal, Mongolia, United Republic of Tanzania, Afghanistan and the Republic of Korea.

Representatives of Armenia and Azerbaijan spoke in exercise of the right of reply.

An official of the United Nations Conference on Trade and Development (UNCTAD) also made a statement.

The Second Committee will meet again at 9:30 a.m. tomorrow, Wednesday 10 November, to continue its discussion of groups of countries in special situations.  It is also expected to begin its consideration of the permanent sovereignty of Arab populations in the occupied Palestinian territory and the Syrian Golan over their natural resources.

Background

The Second Committee met today to take up its agenda item on groups of countries in special situations, including least developed and landlocked developing countries.  It was also expected to hear a keynote address by Jeffrey Sachs, Special Advisor to the Secretary-General on the Millennium Development Goals and Director of the Earth Institute.

Before the Committee was a report of the Secretary-General on implementation of the Programme of Action for the Least Developed Countries for the Decade 2001-2010 (document A/59/94-E/2004/77), which charts implementation of the Programme by least developed countries (LDCs) and their development partners, noting that the lack of country ownership, institutional and human capacity, domestic and external resources are the main obstacles to effective implementation; also underscoring the importance of South-South cooperation and good national and international governance in eradicating poverty and fostering sustainable development in the poorest regions.

The report recommends that the LDCs focus on strengthening productive capacity, particularly in agriculture and agribusiness, small and medium-sized enterprises, energy, infrastructure and information and communications technology.  Developed countries should open up their markets to their products and protect those goods from the pitfalls of rapid trade liberalization.  Development partners, particularly donor countries, should give the LDCs priority in official development assistance (ODA) and development cooperation.

Urging the international community to expedite the Rome agenda on harmonization, with particular emphasis on giving the LDCs a voice in decision-making processes, the report also urges civil society and the private sector to mobilize their constituencies around the Programme of Action, nationally and internationally.

Also before the Committee was a report of the Secretary-General on implementation of the Almaty Programme of Action:  Addressing the Special Needs of Landlocked Developed Countries within a New Global Framework for Transit Transport Cooperation for Landlocked and Transit Developing Countries (document A/59/208), which highlights initial activities of the United Nations system in that regard.

The report states that regional economic groups and transit agreements, as well as bilateral agreements, are crucial in promoting transit transport cooperation.  Policy reform can improve efficiency and reduce transport costs for transit operations, and landlocked and transit developing countries should review foreign exchange regulation, price controls on quota systems to support local service providers as well as restrictions on certain modes of transport.  Financial and technical assistance are important in creating and managing existing transport infrastructure and the United Nations system should better address that issue.

Introduction of Reports

ANWARUL CHOWDHURY, High Representative of the Secretary-General for the Least Developed Countries, Landlocked Developing Countries and Small Island Developing States, introduced the report on the Third United Nations Conference on the Least Developed Countries (document A/59/94-E/2004/77), saying that the share of the LDCs in world trade was 0.6 per cent in 2002.  The same year, the ODA increased only slightly to $15.1 billion while foreign direct investment (FDI) declined from $5.6 billion to $5.2 billion.  The ODA and FDI remained highly concentrated in a few countries, while the LDCs remained marginalized.  They did not benefit from globalization, trade liberalization, FDI growth, increased cross-border flows of goods, services and people, or knowledge technology and information transfer.

The LDCS must grow faster, with gross domestic product (GDP) expanding by 7 per cent and investment growing by 25 per cent annually to break out of the poverty trap, he continued.  Angola, Bhutan, Chad, Eritrea, Mozambique, Rwanda and the Sudan had reached the gross domestic product (GDP) target, while Angola, Bhutan, Chad, Eritrea, Guinea, Lesotho, Mozambique and Sao Tome and Principe had attained the investment target.  Only 84 per cent of the ODA pledged to the LDCs had been disbursed thus far.  The ODA for economic infrastructure and productive sectors had declined significantly from 2000 to 2002, though infrastructure played an essential role in bridging the gap between service availability and service access, and was critical to growth in the trade and productive sectors.  While the extension of the Heavily Indebted Poor Countries (HIPC) Debt Initiative until 31 December 2006 was laudable, full cancellation of the LDCs’ external debt was needed to break the vicious cycle of poverty.

Introducing the report on implementation of the Almaty Programme of Action (document A/59/208), he noted that geographical difficulties faced by landlocked developing countries (LLDCs) continued to dampen trade and inhibit development. International Monetary Fund (IMF) balance-of-payment statistics showed that transport costs made up 13 per cent of the LLDC export value, compared to about 8 per cent and 4 per cent in coastal developing countries and industrialized countries, respectively.  High transport costs diminished export profits, inflated the prices of imports for manufacturing, and discouraged export-oriented private capital.  According to the United Nations Conference on Trade and Development (UNCTAD), the LLDCs had received foreign investment flows of $7.9 billion in 2003, or just 1.4 per cent of total world flows, most of which had gone to just a few LLDCs for oil exploration.

The LLDCs were among the poorest developing countries today, beset with anaemic growth and deteriorating social conditions and accounting for only 2 per cent of the developing world’s total gross domestic product in 2002, he said.  It was encouraging that development aid to LLDCs had recently increased to $10 billion in 2002, compared to $7.3 billion in 1998, but most of the ODA had been used for emergency situations.  The LLDCs had allocated less than 10 per cent of the ODA in 2002 to economic infrastructure, including transport and communications, which could have a long-term effect on trade expansion and development.  Major macroeconomic indicators indicated that the LLDCs would be left increasingly by the wayside in the near future unless they could be helped to overcome their geographic handicaps.

Noting that just a little over a year had passed since the international community had adopted the Almaty Programme of Action, he said it recognized the vital links between transport, international trade and economic growth, and aimed to tackle the challenges of landlockedness.  In implementing the Programme, regional commissions had played a major role, particularly in Asia, where the Intergovernmental Agreement on the Asian Highway Network covered 140,000 kilometres of highways extending to 32 countries, including 12 LLDCs.  The Economic Commission for Africa (ECA) had been contributing through its sub-Saharan Africa Transport Policy Programme, and the Economic Commission for Europe (ECE) had assisted Central Asian landlocked and transit developing countries through its Special Programme for the Economies of Central Asia.  The World Bank had contributed through its Infrastructure Action Plan, collaboration with the World Customs Organization to streamline customs procedures and projects to improve infrastructure and streamline transit arrangements.

He emphasized that future work to assist the LLDCS must focus on improving market access, strengthening infrastructure, and making regulatory and institutional systems more efficient; closer cooperative arrangements between the LLDCs and their transit neighbours; transit policy reforms to improve efficiency and lower costs through commercialization and liberalization of transport services; increased financial assistance to the LLDCs and transit developing countries, with greater proportions of finance allocated to infrastructure investment; and creating national trade facilitation boards to bring together public and private stakeholders to establish efficient trade facilitation systems and transit transport.  In addition, the United Nations and other relevant organizations should provide technical assistance to the LLDCs and transit developing countries in a more coordinated and coherent manner.

Questions and Answers

Concerning the importance of people-centred development and Poverty Reduction Strategy Papers in eradicating poverty, Mr. CHOWDHURY said that the first of seven commitments in the Brussels Programme focused on such development in the LDCs.  As of September, 30 LDCs had completed Poverty Reduction Strategy Papers and were in line to meet the Millennium Development Goals.  Achievement of the Brussels Programme was crucial to achieving the Millennium targets.

Responding to a question about regional support to landlocked developing countries and transit developing countries, he said regional bodies were very engaged in the implementation of the Almaty Programme of Action.  The Office of the High Representative was sponsoring a conference in Kazakhstan next March that would bring together all regional and subregional organizations to interact and coordinate efforts in support of landlocked developing countries and their transit neighbours.  Several donor organizations would attend and it was hoped that the parties would devise concrete ways to support the Almaty Programme.

Statements

SULTAN AL-MAHMOUD (Qatar), speaking on behalf of the “Group of 77” developing countries and China, said that the overall implementation of the Brussels Programme was weak and that development partners had not met the agreed target of providing 0.15 per cent to 0.2 per cent of gross domestic product (GDP) to LDCs.  Trade preferences for LDCs were underutilized due to obstacles such as non-tariff barriers and export subsidies in developed countries. The LDCs’ crushing debt burden continued to weaken social networks and exacerbate conflicts and the spread of HIV/AIDS.  The Group of 77 called for adequate implementation of the Programme of Action through resource mobilization and the creation of an environment that would foster implementation.

Despite technological improvements in transport, the LLDCs continued to lag behind their maritime neighbours in overall development and external trade due to higher transport costs, he said.  They spent almost twice as much of their export earnings on transport and insurance as other developing countries and three times as much as developed countries.  They were among the developing countries with the lowest growth rates and generally heavily-dependent on a few commodities for exports.  Full and effective implementation of the Almaty Programme of Action was needed to address those challenges. The LLDCs would benefit from the recently formed Negotiating Group on Trade Facilitation and the World Trade Organization (WTO) negotiations on market access should give particular attention to products of special interest to them as called for in the Almaty Programme and the Sao Paulo Consensus.

GERTON VAN DEN AKKER (Netherlands), speaking on behalf of the European Union and Associated States, said that lack of territorial access to the sea and remoteness from world markets were among the main causes of poverty in LLDCs. Efficient transit systems, transit policy reforms, competition between different modes of transport, financial and technical assistance to improve infrastructure and maintain existing facilities were vital in improving their situation.  The LLDCs and transit countries should consider prioritizing those areas in their planning and budget allocations, including in their poverty reduction strategy papers.

Noting that one of the main aims of the Almaty Programme of Action was to increase the participation of the LLDCs in world trade, he said global trade liberalization could play a crucial role in achieving the Millennium Development Goals.  Progress would be made, including on services, as well as agricultural and non-agricultural products, in the current Doha round of negotiations.  The recent launching of negotiations on trade facilitation, including to clarify and improve the WTO rules on transit, was a golden opportunity to negotiate new provisions to benefit the LLDCs.  Regional and subregional organizations were also playing an important role in promoting economic activity, strengthening regional cooperation initiatives and promoting agreements between transit countries and LLDCs.

WENLONG YAO (China) said that although assistance to the LDCs had increased since 2000, real net aid flows per capita were still lower than in the 1990s.  The LDCs had limited domestic resources and had received no significant increases in foreign investment.  Increasingly heavy debt burdens and deteriorating trade compounded their woes and more international support and assistance was urgently needed to help them eradicate poverty, build capacity and develop economically.  China called upon donor countries to make good on their pledge to target 0.2 per cent of gross domestic product (GDP) for aid disbursements to the LDCs and to offer further debt relief, special trade treatment for major LDC exports, particularly agricultural products, and better market access.

He said his country supported poverty eradication and sustainable development in the LDCS and had provided them with various forms of technical assistance and aid-in-kind, helping them to complete more than 800 large projects in the agricultural, textiles, power and transportation sectors as well as helping them build schools and hospitals.  China had written off the debts of 31 African LDCs valued at $1.3 billion and matured those of some Asian LDCs.  Moreover, China had begun negotiations on tariff exemptions for certain African LDC exports.

EDOUARD AHO-GLELE (Benin), speaking on behalf of the Least Developed Countries, said the Brussels Programme of Action showed international commitment to improve conditions for the LDCs.  However, three years after its adoption, it had still only been weakly implemented.  If that trend continued, the LDCs would be far from achieving agreed development goals by the end of the decade.  Urgent measures must immediately be taken to guarantee implementation of the Programme of Action to meet those objectives.

He said the international community should lay down specific measures to fulfil its commitments under the Brussels Programme.  The Secretary-General should designate a point person for each of the Programme’s seven commitments to stimulate developed-country efforts to implement the Programme; a mid-term implementation review should be called to give new impetus to implementation; the 2005 high-level General Assembly event on implementation of the Millennium Development Goals should show the progress achieved in meeting the LDC goals; and the LDC focal point participation in the Economic and Social Council on implementation of the Brussels Programme should be addressed.

WEGGER STRØMMEN (Norway) said LDCs needed more and better aid, improved market access, more FDI and comprehensive debt relief.  Sound policies and good governance were also needed within the LDCs at all levels.  The ODA was an important source of financing for their development programmes and poverty reduction strategies needed further improvement to ensure country ownership, broader participation and broader coverage.  Norway had long exceeded the agreed target of earmarking 0.2 per cent of gross domestic product (GDP) as ODA to LDCs had also granted duty- and quota-free access to its markets since July 2002.  The Generalized System of Trade Preferences (GSTP) was an important means of promoting South-South cooperation and trade.

He said developing countries needed to develop stable and predictable conditions for private-sector development and investment.  Some LDCs had succeeded in increasing the volume of the FDI, but many were lagging behind.  Development partners could provide the ODA for building up infrastructure conducive to private-sector development as well as stimulate the FDI by offering risk sharing, venture funds and investment guarantees.  The LDCs needed to focus on selected sectors for the expansion of productive capacity and integration into the global economy, agriculture and rural development being of major importance.  In May, the Government of Norway had introduced an Action Plan, called “Fighting Poverty through Agriculture”, which addressed the important role of the agricultural sector in poverty reduction on a broad basis.

IFTEKHAR AHMED CHOWDHURY (Bangladesh), aligning himself with the Group of 77 and the LDCs, described progress made since his country had started from scratch in 1971, saying that, according to the World Bank, it was one of the few LDCs that was likely to meet all the Millennium Development Goals by the target date of 2015.  Meeting the target of reducing income poverty remained contingent upon external factors such as aid, trade, debt and remittances and it was of critical importance to the LDCs that partners’ commitment of devoting 0.15 per cent of gross domestic product (GDP) to the vulnerable group.  Such aid could play a crucial role in capacity building.  The current level of disbursement to Bangladesh was one seventh of the requirement of an additional annual $7.5 billion in assistance.

Noting that long-term foreign private capital played a complementary and catalytic role in building domestic supply capacity, he said Bangladesh was trying to create a conducive environment for investment through, for instance, setting up export processing zones offering fiscal incentives and special services.  That required huge government investments, which could be complemented by aid.  Goods could then be exported to developed countries under special and differential treatment.  Bangladesh invited development partners to explore ways to engage skilled and semi-skilled labour from the LDCs on a temporary basis.  Also, the serious debt problems necessitated a comprehensive solution.

HUSNIYYA MAMMADOVA (Azerbaijan) lauded the efforts of the Office of the High Representative to mobilize international awareness on the needs of the LDCs and LLDCs.  High transport and transit transport costs continued to impede LLDCs’ trade competitiveness and economic growth prospects.  Azerbaijan called for the creation of transport facilitation boards and better regional transport cooperation for the LLDCs.

Lauding the work of the United Nations regional commissions in transit transport cooperation, she called for their further efforts in consolidation and capacity building to improve land and sea transport linkages, adding that UNCTAD was offering valuable technical assistance and transit transport cooperation in sub-Saharan Africa and the South Caucusus region.  The international community should support LDC efforts for greater market access and help build their trade negotiating capacity.  Azerbaijan also called for effective follow-up to the Almaty Programme of Action.

BERNARD MPUNDU (Zambia) said his country was doing its best to implement commitments made under the Brussels Programme, but was also struggling with external debt.  Prices for its main exports, such as copper, sugar and coffee, had been dropping in international markets due to unfavourable trading patterns.  Given its remoteness as a landlocked nation, its exports were also less competitive in world markets due to high transport costs.

The LLDCs were among the poorest of developing countries, with limited capacities and a high dependence on a few commodities for export earnings, he said.  Their lack of territorial access to the sea and remoteness from world markets had contributed to poverty and high transport costs for both exports and imports.  There was an urgent need for the international community to address the LLDC problems, as recognized in the Almaty Programme of Action, which aimed to improve transit systems in landlocked and transit countries by reducing costs and improving services to increase their export competitiveness.  Zambia called on the international community to fulfil commitments laid down in the Brussels and Almaty Programmes, while the LLDCs themselves did their part.

ALOUNKEO KITTIKHOUN (Lao People’s Democratic Republic), speaking on behalf of the Group of Landlocked Developing Countries, lauded the UNCTAD’s technical and analytical support in the creation of efficient transit transport and trade facilitation systems in landlocked and transit developing countries, the World Bank’s transport improvement projects in Asia and Africa, and the World Customs Organization’s efforts to improve customs procedures.  The International Agreement on the Asian Highway Network signed in April would significantly boost regional economic cooperation and trade.  Donor and development partners should continue supporting the efforts of the LLDCs to implement the Millennium Development Goals and the Almaty Programme, and contribute generously to the Trust Fund for the LLDC follow-up to the Almaty Programme.

Most of the LLDCs were among the world’s poorest developing countries and had low per capita gross domestic product (GDP).  High transport and transit costs impeded their competitiveness and they paid 14.1 per cent of total export earnings for transportation and insurance services compared to 8.6 per cent spent by other developing countries.  Transport costs had risen due to inadequate legal and institutional frameworks and a shortage of human resources.  Inefficient, unreliable transport facilities often meant higher storage prices and frequent losses of perishable goods, thus compounding the problem.  Most-favoured nation (MFN) tariff reductions that applied to all the WTO members did not benefit LLDCS to the extent that they did other countries with good transport facilities.  The European Union’s proposal to give the LLDCs wide-ranging preferences was reasonable.  The LLDCs called for full and effective implementation of the Almaty Programme.

DER KOGDA (Burkina Faso) noted that the LDCs had succeeded in persuading the Economic and Social Council to recommend that the General Assembly adopt a resolution on transition strategies for countries emerging from conflict.  Despite their own efforts, LDCs and LLDCs faced difficulties in overcoming structural deficiencies in their countries, lacking the necessary infrastructure for development.  Stressing they continued to need support from bilateral multilateral donors and called for increased ODA and the cancellation of external debt.  Burkina Faso was working to strengthen its partnerships for development and several activities had been carried out with the IMF and World Bank over the past few years.  However, shortfalls had remained in cooperation with partners, especially in designing and assessing projects and programmes.

BAKARY DEMBELE (Mali) said the LDCs continued to be characterized more than ever by extreme poverty, poor infrastructure, commodity-price fluctuations, poor market access and heavy external debt burdens.  As part of its efforts to achieve the Millennium targets, Mali had adopted in 2002 a medium-term Strategic Framework to Fight Poverty, and included it in its national report in preparation for the Brussels Conference.  Since 1992, Mali’s vast decentralization process had made a drive for good governance and sustainable development.  The success of the Brussels Programme depended on the shared responsibility of the international community to help developing countries eradicate poverty and achieve sustainable development.

Landlocked developing countries continued to be among the world’s poorest nations, he said, adding that their poor sea access and high transport costs weakened the competitiveness of their goods on world market and their participation in international trade and commerce.  Mali’s long distance from the coast was a serious handicap that made transport costs high and weakened the competitiveness of exports, particularly cotton.  Bilateral and multilateral arrangements between Mali and other African nations had made enormous headway in improving regional cooperation, infrastructure and communications media.

KAZUO SUNAGA (Japan) welcomed the accession of Nepal and Cambodia to the WTO, noting that they were the first LDCs to join the organization since its inception.  Their accession had been eased by the Integrated Framework for Trade-related Technical Assistance to Least Developed Countries, which aimed to help LDCs expand their participation in the global economy as well as to enhance economic growth and poverty reduction strategies.  The world trade system must be more inclusive, taking into account the aspirations of the LDCs and LLDCs.

Noting that substantial progress had been made in achieving the goals of the Almaty Programme of Action, he said his country had remained an active partner in ongoing efforts made by the LLDCs to implement the Programme.  Among other priorities, infrastructure development and rehabilitation was indispensable in eliminating constraints on international trade and investment.  Also, coherent and standardized rules and regulations were needed to ensure smooth and efficient border crossings and customs procedures.  Finally, there was a need to foster regional cooperation so that LLDCs and transit countries could form win-win partnerships in stimulating economic growth.

HABIB OUANE, Director, Special Programme on the Least Developed Countries, Landlocked Developing Countries and Small Island Developing States, United Nations Conference on Trade and Development, said that in recent years only seven LDCs had achieved the 7 per cent minimum annual gross domestic product (GDP) growth required for poverty reduction.  Trade expansion had helped alleviate poverty in only three LDCs:  Bangladesh, Guinea and Uganda.  In most LDCs, poverty had remained stable or had increased and most were not on target to achieve the Millennium Goals.  Only 11 of the 49 LDCs were expected to meet the target of reducing child mortally by two thirds between 1990 and 2015.  Such alarming reminders called for a new approach to development based on three pillars:  a development strategy that mainstreamed trade and development in poverty eradication; improvements in the international trade regime, including a reduction of international development constraints in LDCs; and greater financial and technical support for promoting the LDC supply and trade capacities.

Since the late 1980s, many LDCs had pursued trade liberalization, he said, noting that two thirds of them currently had open trade regimes.  However, that alone would not bring about sustained economic growth.  Economy-wide expansion of income-earning opportunities was also needed to eradicate poverty.  The 2004 LDC’s Report noted modest improvements in aggregate net flows, particularly when compared to the historically low level of 2000.  However, in recent years, aid flows to the LDCs had been spent more on human and social needs, while in the past they had financed supply capacities and physical infrastructure.  In the 1990s, aid for agricultural development was half of what it had been in the 1980s, while aid for trade-related infrastructure had fallen 43 per cent.  Aid should be much more targeted toward building production and trade capacities.

DURGA BAHADUR SUBEDI (Nepal) said that implementing the Brussels Programme had been difficult for many developing countries, particularly in light of their lack of sufficient national capacities, financial resources and technical support. A stronger global partnership and a greater role for regional and subregional organizations in implementing the Brussels and the Almaty Programmes were essential.  Nepal called upon the Secretary-General to provide the Office of the High Representative with sufficient resources to carry out its mandate and noted the benefits of its workshop in January, which had brought together national LDC focal points to strengthen capacity building and national monitoring of development targets.

While the Economic and Social Council had put the LDC concerns in the forefront of the international development agenda, more donations and the FDI were needed to assist the LDCs, which continued to suffer from heavy external debt burdens and payment cycles, he said.  The LDC trade accounted for 1 per cent of world trade, while LLDCs were the weakest, most marginalized countries in the world.  Their problems must be urgently addressed.  Nepal was committed to implementing the Brussels and Almaty Programmes.  Its current development plan focused on poverty reduction goals.  However, the Millennium target of halving poverty by 2015 remained a daunting challenge that Nepal would not be able to meet without international financial and technical support.

CHOISUREN BAATAR (Mongolia) said that the breakthrough Intergovernmental Agreement on the Asian Highway Network was the greatest achievement on transit transport cooperation since the Almaty Conference as it provided access to and through all landlocked countries in the region and could boost regional economic cooperation and trade.  Mongolia called for its prompt entry into force and implementation.  National ownership and leadership were critical for effective implementation of the Almaty Programme, which called for the creation of national trade facilitation boards.  Mongolia had set up a Facilitation Committee on transit transportation comprising representatives of concerned ministries, government agencies, transportation organizations and the private sector.  Its aim was to formulate integrated transportation policy, particularly transit transportation, and train personnel.

Encouraging the strengthening of partnerships with all stakeholders, including with transit neighbours, he said his country attached importance to concluding ongoing negotiations on the tripartite agreement on transit transportation with Russia and China.  That agreement could spur trade and investment, facilitate the shipment of goods and foster economic cooperation in North-east Asia.  However, despite efforts to sustain economic growth, Mongolia’s dependence on agriculture and a few export commodities left its economy small and vulnerable.  Strengthening cooperation with trading partners within the WTO was a top priority in Mongolia’s trade development.

CELESTINE MUSHY (United Republic of Tanzania), aligning himself with the Group of 77 and the LDCs, said that progress in the implementation of the Brussels Programme was very slow due to the lack of financial resources at the domestic and international levels.  Even though the trend of resource mobilization in his country was positive, the magnitude of resources available was still far from the levels required to generate growth commensurate with the challenges of poverty eradications.  Those challenges were compounded by the adverse effects of natural disasters, declining commodity prices, global trade barriers and high external indebtedness.

Describing the Tanzanian Government’s actions regarding economic and political reform, good governance, human rights and combating corruption, he said that despite modest achievements, the country still faced serious challenges of poverty, economic growth, increasing productive capacities for exports and curbing unemployment.  The international community should assist in the second phase of its poverty reduction strategy (2005-2010).  As Tanzania had a range of transport corridors serving landlocked developing countries, it needed more investment in its transport sector in order to minimize transit costs and time.  The problems associated with the transit transport system needed to be addressed in a coordinated manner from the point of entry all the way to the destination point, in the spirit of the Almaty Programme of Action.

MOHAMMAD WALI NAEEMI (Afghanistan) noted that despite several conferences having been held on the LDCs, their number had steadily increased.  If the 2001 Brussels Programme was not implemented, the number of people living in extreme poverty in the LDCs could rise from the current 334 million to 471 million by 2015.  Economic, political and social priorities should be defined, and production and trading capacity reinforced, since the LDC economies depended almost entirely on a few products.

Noting that many LLDCs were not yet members of the WTO, he stressed the need to accelerate their membership.  Accession should consider individual levels of development, especially those needs and problems that were due to geographical disadvantages.  Setting up efficient trade facilities was crucial for external trade, as many LLDCs depended on their neighbours’ transit policies.

Poverty was a major challenge in Afghanistan, although some positive steps had been taken, he said.  Road construction had started with links between major cities as a top priority, most of the country’s larger cities had some access to telephone communication systems, women had been steadily reintegrated into the job world, and more than 5 million children had returned to school.  However, the country still had one of the highest infant and adult mortality rates in the world, very few Afghans had access to safe drinking water and only a small number had reliable electricity.

KANG SEOK-HEE (Republic of Korea) said the LDCs must enhance their production capacities in order to benefit fully from international trade.  The international community must do its part to create a more LDC-friendly multilateral trading system and strengthen its support for the LDC capacity building.  In that regard, the Republic of Korea had provided, since January 2000, duty-free market access for 87 exports from the LDCs.  It had also hosted training courses in trade capacity-building for trainees from 12 LDCs.

Welcoming the modest increase since 2000 in the ODA flows to LDCs, he expressed hope for a continued increase in accordance with already agreed international commitments.  The Republic of Korea had increased the ODA from $19 million in 2001 to $55 million in 2002, and planned to continue that upward trend.  As a testament to its belief that good governance made for more effective use of the ODA, Seoul would host, in close cooperation with the United Nations, the Sixth Global Forum on Reinventing Government in May 2005.

Rights of Reply

The representative of Armenia, speaking in exercise of the right of reply, said his country had been under a blockade imposed by Azerbaijan for more than a decade.  In its statement today, Azerbaijan had voiced its commitment to the Almaty Programme of Action, but had itself violated one of its main principles -– freedom of transit through neighbouring countries.  Azerbaijan’s lasting blockade of Armenia had caused unemployment and negatively affected economic conditions and living standards.  It had used tanks, rockets and missiles against civilians in Nagorno-Karabakh to reject the peaceful exercise of the right to self-determination guaranteed by the United Nations Charter.

The representative of Azerbaijan, also speaking in exercise of the right of reply, said Armenia had tried to camouflage its aggressive policy by citing the right to self-determination, which could not be interpreted as the forcible separation of part of a State and should not violate another State’s territorial integrity.  Azerbaijan had imposed no economic blockade on Armenia.  However, as a result of Armenian aggression and occupation, an entire area of Azerbaijan had been cut off from the main part of the country.  Peace and stability would be a reality by now, but Armenia had decided to misinform the international community.

Keynote Address

JEFFREY SACHS, Director of The Earth Institute at ColumbiaUniversity and Special Advisor to the Secretary-General on the Millennium Development Goals, warned that if the international community turned aside its only shared set of goals, the future would be bleak.  The 2005 comprehensive report on progress in implementing the goals by the target year of 2015 would make very practical recommendations on how the world could proceed.  It would not ask for new promises and commitments, only on following through on already agreed targets.

He said research showed that in all areas of concern -- from farmers’ inability to grow enough food to feed their families, children dying of malaria and their parents dying of AIDS, or young girls dropping out of school -- there were practical, specific, proven things that could phenomenally improve people’s lives.  If done together, such efforts would make the difference between either continued failure in achieving the goals or some success in halving extreme poverty.  The Millennium Development Goals in themselves were not enough; the world had the capacity to completely eliminate extreme poverty by 2025 and 2015 was an important midway point.

Most African farmers were farming in drought-vulnerable environments, he said, adding that when drought led to starvation and hunger, that was a result of bad governance.  For example, Darfur had suffered from declining rainfall in the last several years, creating food shortages.  Lack of water was the root of the conflict.  There was not enough for crops and cattle at the same time.  Addressing the water shortage and low level of crop production was a more viable solution than a military solution.  A military presence would not prevent hungry people from killing each other.

There were practical, direct, proven and monitorable interventions that could end that massive suffering and death, he said.  Such interventions were not costly.  They required that the international community make good on its already agreed commitments.  The high-income world had an obligation to make sure that the opportunity was not missed.  At July’s Group of Eight Summit, the United Kingdom’s Chancellor had promised to put those concerns at the top of agenda, calling for a doubling of development assistance.  The year 2005 should and would be a breakthrough year in achieving the goals.

Questions and Answers

Concerning the European Union’s role in helping the developing world achieve the Millennium Development Goals, Mr. SACHS said that France, the United Kingdom, Belgium, Ireland, Spain and Finland had committed to meeting the ODA targets. Hopefully, the European Union as a whole could say it could reach the target of earmarking 0.7 per cent of gross domestic product (GDP) for the ODA in the course of the coming decade.  There was hope that by 2015 all donors would reach that amount, and that big European Union countries that had not done so would join what was becoming a Europe-wide effort to meet international targets for development assistance.

Regarding the role of good governance in enabling developing countries to achieve the Millennium Development Goals, he expressed the hope that decision-makers moved quickly on aiding countries that had completed the arduous HIPC eligibility process.  It made no sense for countries to go through that process only to be told that they were not governed properly and therefore did not qualify for the ODA.  However, that was the case in 11 HIPCs.  The United States had listed 20 countries as eligible for its Millennium Challenge Account, thus certifying that they practised good governance.  It was no use giving lots of money to countries that were so badly governed that there were no results. However, it was now necessary to make the link of providing the necessary resources to the countries that had passed the test.  The new World Bank report showed that without basic infrastructure, notably electricity, countries would not attract the investment they needed to be competitive.  Those developing nations needed external resources to build that infrastructure.

As for helping developing countries overcome trade barriers that inhibited their ability to export, he said that while the global trading system was relatively open, trade rules governing a few key commodities in commodity-dependent developing countries were abusive and unfair.  Market opening and the resources to create basic infrastructure were needed.  Markets were systematically designed to ignore the poorest people.  It was not the job of business to service markets and poor people and non-market approaches were needed to help bring people up to a level were they could participate in the market.  Trade policy reform alone would not solve the problem.  Market access was needed, but so were road, school, hospital, industrial, energy and other basic infrastructures.

On how to get the United States to contribute more in terms of development assistance, he said that country was spending $450 billion annually on the military and only $15 billion on development assistance.  Every county needed both development policy and defence policy.  Foreign policy in the United States was spinning out of control because it was not stabilized by development.  It was in the United States’ vital interest to increase development assistance.  It had the smallest share of gross domestic product (GDP) earmarked for the ODA of any donor country, and that was not safe for the United States.  The Organization for Economic Cooperation and Development (OECD) had found that if contributions from the private sector and non-governmental organization’s contributions were added to the 0.14 per cent of GDP that the United States was providing now, the total would rise from 0.14 per cent to just 0.17 per cent.  Next year was important for developing countries and the Millennium Development Goals progress review summit should not be a security summit, because there could be no security without development.

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