UN Vienna Conference leads to new action programme for landlocked developing countries

7 November 2014

Government officials, business leaders, and representatives from civil society and international organisations adopted a new action programme last week aimed at advancing economic growth and sustainable development in landlocked developing countries (LLDCs) over the coming decade.

The programme, inked during the Second UN Conference on LLDCs in Vienna, Austria, sketches out a strategic framework for 2014-2024 based on six priority areas: transit, trade, and infrastructure challenges, regional cooperation, structural transformation, and means of implementation.

“The Vienna conference has come out with a holistic, forward looking and action-oriented program and I clearly see that in the document that has been adopted,” said the Secretary-General of the conference, Gyan Chandra Acharya, in his closing remarks. 

At the opening ceremony of the three-day meeting in the Austrian capital, UN Secretary-General Ban Ki-moon underscored the need to strengthen LLDCs’ trade ties with regional partners based on the rationale that “regional integration can transform countries from being landlocked to ‘landlinked’.” 

According to the UN’s classification, there are currently 32 LLDCs ranging from Afghanistan to Zambia with a combined population of 440 million people. Sixteen of these countries are located in Africa, 10 in Asia, 4 in Europe, and 2 in Latin America.

 

1370 kilometers to the nearest seaport 

In Vienna, conference participants first took stock of the progress achieved since the
Almaty Programme of Action was adopted 11 years ago, when the First UN Conference on LLDCs was held in Kazakhstan.

The 2003 Almaty Programme had set out a “new global framework” aimed at improving cooperation in transit transport for landlocked and transit developing countries, given the role played by transaction costs in impeded landlocked developing economies’ integration into world markets.

The programme thus featured a series of recommended actions in the priority areas of transit policy, infrastructure development, international trade, and trade facilitation.

Eleven years later, conference participants in Vienna acknowledged while there has been “some progress” in implementing the Almaty plan, more global support is needed for LLDCs given the significant trade and development challenges these countries still face.

In an op-ed published in The Guardian newspaper prior to the Vienna conference, Gyan Chandra Acharya and Austrian Foreign Minister Sebastian Kurz noted that even though LLDCs’ exports increased almost fivefold between 2003 and 2013, their share of global trade remains limited to a meagre one percent.

With respect to trade costs, a recent World Bank study found that LLDCs pay over twice as much than their coastal neighbors – US$3040 compared to US$1268 – when exporting standard containers of cargo.

Geographic data further illustrates these obstacles. These landlocked developing countries have to overcome an average distance of 1370 kilometers to reach the nearest seaport, eight times more than the average industrialised country.

In this context, experts have said that it is being landlocked – rather than these economies’ development level – which places a high trade cost burden on LLDCs.

The Vienna Programme of Action acknowledges the heavy toll that this cost burden and the resulting low level of trade integration are predicted to have on LLDCs. Specifically, economic development “is on average 20 percent lower than what it would be were they not landlocked.”

Recommendations

Given these challenges, the new Programme of Action calls for advances in the priority areas of transit policy, infrastructure development and maintenance, international trade and trade facilitation, regional integration and cooperation, structural economic transformation, and means of implementation. 

Regarding trade policy, the document notes that there is a need “to significantly increase the value added and manufactured component, as appropriate, of the exports of landlocked developing countries” as well as to boost these countries’ share of intra-regional trade.

Moreover, the Programme contains recommendations for trading partners to grant better market access for goods from LLDCs, and urges against “arbitrary or unjustified” non-tariff barriers that may be in violation of WTO rules.

The Vienna document also highlights the pivotal role of services as “enablers of trade in goods and effective participation in international trade and global value chains,” with tourism being one example. Conference participants also noted the roles that science, technology, and innovation can play in advancing structural transformation.

Regarding means of implementation, the Vienna Programme of Action highlights the continued importance of both official development assistance flows and aid for trade, which are to be complemented with renewed efforts at South-South cooperation.

In order to ensure that governments and private actors follow up on these non-binding provisions, conference participants invited the UN General Assembly to consider holding a “comprehensive high-level midterm review” of this new programme.

They also encouraged the High Representative for the Least Developed Countries, LLDCs, and Small Island Developing States to develop key indicators to track the success in enacting the Vienna plan.

Azevêdo: trade facilitation “crucial”

The potential for trade facilitation to help LLDCs cut transaction costs and boost growth was also raised by WTO Director-General Roberto Azevêdo, who spoke on the first day of the conference.

In this context, Azevêdo noted that the WTO’s recently-inked Trade Facilitation Agreement (TFA) could greatly benefit LLDCs. “Transit measures would likely be put in place as soon as the agreement is implemented. This would be a crucial step for LLDCs,” Azevêdo said.

Analysts have said that the TFA, which was agreed at the WTO’s Ninth Ministerial Conference in Bali, Indonesia last year, contains several crucial provisions for LLDCs. For instance, Article 11 on Freedom of Transit was one area of the negotiations in which the country group was heavily involved. 

The Vienna Programme of Action takes up these considerations by calling upon development partners, and notably transit countries, to ensure that trade facilitation initiatives such as the TFA “are developed and implemented together with landlocked developing countries in all the relevant areas.”

While the TFA was agreed in Bali last year, efforts to implement it stumbled in July, after India refused to back the adoption of a Protocol of Amendment that would integrate the trade pact into the WTO’s legal framework. That step is crucial for allowing WTO members to then ratify the deal domestically, in order to eventually bring it into force.

New Delhi had said at the time that it had not seen enough progress in advancing another Bali decision, that of finding a “permanent solution” to the issue of public food stockholding programmes for food security. 

In the Austrian capital, the WTO Director-General stressed that in order to secure TFA implementation, delegations in Geneva need to find a solution to the political impasse. While the US and India restarted talks last week aimed at breaking the stalemate, a formal deal has yet to be confirmed. (See Bridges Weekly, 6 November 2014)

ICTSD reporting; “UN conference adopts ambitious 10-year plan for world’s landlocked developing countries,” UNITED NATIONS NEWS CENTRE, 5 November 2014; “Private Sector Can Boost Growth in Landlocked Developing Countries,” UNITED NATIONS NEWS CENTRE, 4 November 2014; “At UN conference, top officials urge greater development assistance for landlocked countries,” UNITED NATIONS NEWS CENTRE, 3 November 2014; “We must recognise the special needs of landlocked developing countries,” THE GUARDIAN, 2 November 2014.

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