NGLS Roundup 75

NGLS Roundup 75, June 2001

THIRD UNITED NATIONS CONFERENCE ON LEAST DEVELOPED COUNTRIES

The Third United Nations Conference on Least Developed Countries (LDC-III) took place from 14-20 May 2001 at the European Parliament in Brussels (Belgium). The 159 participating governments adopted a political declaration and programme of action for the next decade, aiming to tackle the enormous problem of poverty in the world’s poorest countries and to improve the quality of lives of the more than 630 million people living in them. The Brussels Declaration states: “The overarching goal of the Programme of Action is to make substantial progress toward halving the proportion of people living in extreme poverty and suffering from hunger by 2015 and promote the sustainable development of the LDCs.”

The Conference, attended by more than 6,500 participants from governments, international organizations and civil society, addressed issues of development assistance, debt cancellation, private investment, trade, health, education, governance, globalization and follow-up arrangements. It combined many tracks and types of meeting; in addition to the Committee of the Whole’s work to conclude the Declaration and Programme of Action (POA), there were interactive thematic sessions, parallel meetings and an NGO Forum.

The Conference was the third UN conference addressing the challenges of LDCs. The first two took place in Paris in 1981 and 1990. Preparations for LDC-III began in 1999 with national and regional meetings, followed by the work of a preparatory committee to prepare for the conference and its final outcomes. LDC-III was the first major UN conference hosted by the European Union (EU). This initiative was complemented by the work of EU-focused NGOs in hosting the NGO Forum.

LDC-III was the first major UN event since the Millennium Summit, which was held in September 2000. LDC-III was billed as a testing ground for commitments in the Millennium Declaration, especially the development targets. The Millennium Declaration pledged to “halve, by the year 2015, the proportion of the world’s people whose income is less than one dollar a day and the proportion of people who suffer from hunger and, by the same date, to halve the proportion of people who are unable to reach or to afford safe drinking water.”

Two initiatives have been cited as marking the success of LDC-III: the European Union’s “Everything But Arms” (EBA) plan announced in February 2001, which grants free access to imports from LDCs; and the Organisation for Economic Co-operation and Development (OECD) decision in the week before the conference to untie most LDC development aid (see below).

In his concluding comments on the contribution of LDC-III, Rubens Ricupero, Secretary-General of the United Nations Conference on Trade and Development (UNCTAD), said LDC-III had made important progress possible in vital areas. However, he asked, in light of the current circumstances, were the results satisfactory? “Unfortunately, the answer is no,” he said. “Many decisions highlighted by NGOs, for example, were still not achievable and it [was not] possible to make major breakthroughs on such issues as debt relief, trade or official development assistance (ODA).”

TRADE

LDC-III took place six months before the fourth World Trade Organization (WTO) Ministerial meeting in Doha (Qatar) in November 2001. LDC-III presented an important forum—both by its agenda and its participants—to discuss trade and development. LDCs account for 10% of the world’s population but less than 0.5% of its trade. According to the World Bank, tariffs and quotas in the industrialized world cost LDCs US$2.5 billion a year in lost export revenues. Non-tariff barriers, such as health and safety regulations, cost more.

Michael Moore, WTO Director-General, was present at LDC-III and emphasized the importance of trade for investment and economic growth of LDCs. He and the EU repeatedly advocated the merits of a new trade round with an emphasis on development.

UN Secretary-General Kofi Annan concurred and urged NGOs to launch a campaign for open markets for LDCs, similar to their work for debt cancellation. At the opening session he said: “I believe the best hope for LDCs, and indeed for the developing world in general, lies in a new round of global, multilateral trade negotiations. And this time it must be a true Development Round.”

He acknowledged the opposition to a new trade round. “After the Uruguay Round,” he said, “developing countries found they had benefited less than developed ones....Many of them, as well as some non-governmental organizations, feel that there should not be a new round, only a reassessment of the old. But even if their grievance is well taken, surely it is not correct to argue against a new round. For a new round is precisely the forum where the necessary reassessment and adjustments can be undertaken. I urge, therefore, that all governments put their weight behind the launch of a new multilateral round of trade negotiations, with all due dispatch.”

The EU, as host of the Conference, sought to include a reference to a new trade round in the conference Declaration. An initial draft of the declaration reads as follows: “We commit ourselves to seizing the opportunity of the fourth WTO Ministerial meeting in Doha in November 2001 to put development at the centre of a new round of multilateral trade negotiations.” Unacceptable to many developing-country UN Member States, this was amended to: “We commit ourselves to seizing the opportunity of the fourth WTO Ministerial meeting in Doha in November 2001 to advance development in multilateral trade negotiations.” However, there was no consensus on referring to “multilateral trade negotiations,” and the Declaration was adopted with a commitment to “seizing the opportunity of the fourth WTO Ministerial meeting in Doha in November 2001, to advance the development dimension of trade, in particular for the development of LDCs.”

MARKET ACCESS

On the eve of LDC-III, ministers of the LDCs adopted a declaration in which they welcomed the Everything But Arms initiative. They “urge[d] other development partners that have not yet done so to take similar measures.” Estimates by UNCTAD suggest the initiative would have relatively little impact on LDC trade because most of their goods already enter the EU duty-and quota-free. Extending the initiative to the US, Japan and Canada, which have much higher barriers to LDC trade, would have a bigger impact and boost LDC exports by 3%. In negotiating the Programme of Action, LDCs sought “provision of secure and predictable market access through bound, duty-free and quota-free access for all of our products within a specified time-frame.” But their development partners demurred; Canada and the US were concerned about textiles, and Japan about rice.

EU Trade Commissioner Pascal Lamy credited the LDC-III timetable and emphasis on “deliverables” with providing the leverage to push through the EBA initiative, which was announced by the EU in the process leading up to the conference. In his comments on a new trade round, Mr. Lamy echoed Mr. Moore’s comments that the status quo was unjust and a new round would provide the framework to correct it. This theme was echoed repeatedly by representatives of the EU. In the concluding plenary, the Conference President and Swedish Minister of Trade Leif Pagrotsky added: “If poor countries shall have a chance to be included in the global economy, it is crucial that they are part of the multilateral trading system, where law and order rule relations between partners, not by strength and power. Or to quote Mike Moore’s words on Wednesday, ‘in the WTO we are all members of the Security Council.’”

Many NGOs were sceptical about the benefits of the initiative. Oxfam-UK called it “Everything But Farms” and released a report criticizing EU protection of its agricultural sector and products and the long transitional period (2006 to 2009) for market access for developing-country sugar, rice and bananas.

DEBT

For many LDCs, the most important results sought were in the area of debt cancellation. Their Ministerial Declaration called for a “resolution of the debt crisis by providing broad, deep and immediate debt relief to all LDCs, including through total debt cancellation.”

In addition to calling for the full financing and speedy and effective implementation of the Enhanced Heavily Indebted Poor Countries (HIPC) Initiative, Member States reaffirmed recent decisions taken at the meetings of the International Monetary Fund (IMF) and the World Bank “to provide debt relief to post-conflict countries within the flexibility provided under the HIPC framework.” They also agreed that “consideration may be given to granting a moratorium on debt service payments in exceptional cases.”

The European Network on Debt and Development, while welcoming a concrete proposal by the EU to forgive all outstanding LDC obligations arising from special loans of 80 million Euros provided under earlier Lomé conventions, was disappointed with the lack of deliverables in this area. The network had called for a commitment to move beyond the HIPC framework and expressed concern that post-conflict countries had to wait much too long before receiving debt relief.

UNTYING AID

Endorsing a decision taken earlier in May by members of the Organisation for Economic Co-operation and Development (OECD), Member States agreed in the Brussels Declaration that “We undertake to improve aid effectiveness and to implement the OECD-DAC recommendation on untying ODA to LDCs.” This could significantly increase the value of public development aid, because it involves about two billion dollars annually of ODA. The beneficiary LDCs will now have the choice of buying equipment and services from the cheapest source—and not have to buy them from countries providing aid.

DEVELOPMENT PARTNERS

A contentious item throughout LDC-III was the definition of “development partners.” The POA contains commitments for action from LDCs, and these are matched by commitments from development partners. The industrialized countries had hoped to include some of the middle-income developing countries in the definition. While recognizing that some developing countries do provide assistance to others and enter into agreements with them, the group of developing countries insisted that this is undertaken in the context of South-South cooperation. The current definition of development partners included not only nations of the OECD, but UN agencies, the World Bank and International Monetary Fund.

LDC-IV?

Placing major emphasis on the implementation and follow-up arrangements to LDC-III, Ambassador Anwarul Karim Chowdhury (Bangladesh), UN Coordinator of LDCs, introduced in the opening session a proposal on mechanisms for implementation and follow-up from the LDC Ministerial meeting. “We call upon the Secretary-General of the United Nations,” he said, “to establish an Office of Least Developed Countries, Land-Locked Developing Countries and Small Island Developing States, with adequate financial and human resources, headed by a High Representative, immediately after the Conference.”

Discussions on follow-up arrangements continued to be one of the major items of conversation in the meeting rooms, corridors and lounges of the conference, with LDCs seeking a “highly visible follow-up mechanism.” The Secretary-General will submit his recommendations to the UN General Assembly at its 56th session, which begins in September 2001.

In the POA, organizations of the UN system are asked to accord high priority to LDCs, including the Resident Coordinator system at the country level. At the inter-governmental level, the Economic and Social Council (ECOSOC) is asked to review implementation of the POA and include it in its high-level segment.

The POA also asked the UN General Assembly to consider holding a fourth UN Conference on LDCs “towards the end of the decade” to review the successes and failures in the implementation of the conference outcomes, and decide upon subsequent action.

The commonly-agreed yardstick to measure the success of LDC-III is the reduction of the number of LDCs. Since 1971, when the category was officially established, the number of LDCs has almost doubled from 25 to 49. The UN Committee for Development Policy, when determining which countries qualify as LDCs, has said that two additional African countries now qualify to join the ranks of LDCs: the Republic of Congo and Ghana.

The LDCs range from Afghanistan and Bangladesh to Yemen and Zambia. Of the 49, there are 34 in Africa, 9 in Asia, 5 in the Pacific, and one in the Caribbean. Only one country, Botswana, has graduated from the ranks of LDCs.

DECLARATION AND PROGRAMME OF ACTION

The Brussels Declaration and the Programme of Action for the LDCs were adopted unanimously by participating governments in the final plenary. Negotiations had continued into the early hours of the morning to achieve agreement on the Declaration and the arrangements for follow-up.

The Programme of Action aims to significantly improve conditions of the 630 million people living in LDCs. Throughout its 60 pages it describes ambitious goals—such as halving the proportion of people living in extreme poverty by 2015—while acknowledging that the objectives and goals set at the last LDC Conference in Paris ten years ago “have not been achieved.”

The POA points out that while LDCs have pursued the economic reforms called for in Paris—including reducing trade barriers and strengthening regulatory frameworks—the results have been “below expectations.” Their growth and development prospects had diminished during the decade through a combination of, among other things, declining financial aid, an increasing debt burden, and complex trade barriers. Reversing their increasing marginalization and promoting their integration into the world economy, according to the POA, is “an ethical imperative.”

The POA’s partnership framework describes implementation of the mutual commitments by LDCs and development partners as a “shared responsibility.” It outlines a broad range of measures to be taken by development partners and the LDCs themselves, which are focused on seven commitments:

--fostering a people-centred framework;

--good governance at national and international levels;

--building human and institutional capacities;

--building productive capacities to make globalization work for the LDCs;

--enhancing the role of trade in development;

--reducing vulnerability and protecting the environment; and

--mobilizing financial resources.

The POA concludes with a chapter on implementation and follow-up.

Under financial resources, development partners—in addition to the commitment to untie aid—agreed to implement a number of commitments previously made in Paris. These are: those donor countries that provide more than 0.2% of their gross national product as official development assistance to LDCs agree to continue; others that are providing 0.15% of gross national product undertake to reach 0.2% expeditiously; and others that have committed themselves to the 0.15% target reaffirm their commitment and undertake to achieve the target within the next five years.

On debt, partners agreed to provide the resources to fully implement the enhanced HIPC Initiative of the World Bank and the IMF and make expeditious progress toward full cancellation of all outstanding official bilateral debt owed by HIPC LDCs. They also agreed to assist LDCs in their efforts to use resources released by debt relief for nationally-owned development and poverty eradication strategies for long-term economic growth. In order to increase foreign investment, LDCs agreed on policies to strengthen regulatory and legal frameworks, as well as reduce risks for foreign investors through bilateral and regional investment treaties. Donors agreed to support LDCs in such areas as technology, training, establishment of foreign investment advisory bodies, and by underwriting—where appropriate—perceived political and commercial risks.

The commitment on trade includes separate sections on: trade, commodities and regional arrangements; services; and reducing the impact of economic shocks. It states that “integration into the world economy is an insufficient but necessary precondition for long-term sustainability of poverty reduction.” Development partners will aim to improve preferential market access for LDCs by “working towards the objective” of duty-free and quota-free market access for all LDC products in the markets of developed countries. They will also aim to implement in full the special and differential measures for LDCs as contained in the final act of the Uruguay Round, while considering new measures for LDCs as part of future multilateral trade negotiations.

The partners also intended to strengthen technical assistance for implementation of multilateral trade negotiations and to consider making such assistance an integral part of commitments undertaken in future trade agreements. They outlined a number of steps aimed at facilitating the accession process to the WTO on terms that take into account their stage of development and the basic principle of special and differential treatment. On commodities, the POA states that “diversification of the export base would...help the LDCs to overcome one of the most important weaknesses of their development.” To address this, partners will, among other things, support diversification programmes including by strengthening activities covered by the Second Account of the Common Fund for Commodities, and development of small- and medium-sized enterprises.

The commitment on building human and institutional capacities addresses such areas as: social infrastructure and social service delivery; population; education and training; health, nutrition and sanitation; and social integration. It describes goals and sets out measures and policies to meet them. For example, by 2015 it calls for: making reproductive health accessible to all individuals; ensuring that all children have access to free primary education and achieving a 50% improvement in levels of adult literacy; and reducing the infant mortality rate below 35 per 1,000 live births and reducing the maternal mortality rate by three-fourths of the current rate.

Among a wide variety of measures, development partners agree to provide strengthened support in implementing population and development policies, and to enhance ODA for health, safe water and sanitation. They also agree to assist in setting up effective health infrastructures and increase access to necessary medicines and vaccines, including urging the pharmaceutical industry to make drugs related to communicable diseases—particularly HIV/AIDS, malaria and tuberculosis—more widely available and affordable.

The commitment on building productive capacities contains measures addressing physical infrastructure, technology, enterprise development, energy, agriculture and agro-industries, manufacturing and mining, and rural development and food security.

In its follow-up section, the Secretary-General is requested to submit recommendations for an efficient and highly visible follow-up mechanism, including the possibility of transforming the current Office of the Special Coordinator for the Least Developed, Land-Locked and Small Island Developing States into an Office of the High Representative for Least Developed, Land-Locked Developing Countries and Small Island Developing States.

DELIVERABLES

In addition to the negotiations of the Declaration and the POA, UNCTAD—acting as conference secretariat on behalf of the UN system—introduced a new approach in planning the conference. This consisted of organizing interactive thematic sessions to discuss concrete issues with a view to finding practical solutions—“deliverables.”

These events addressed:

--Governance, Peace and Social Stability;

--Enhancing Productive Capacities—the Agricultural Sector and Food Security;

--Intellectual Property and Development—an Instrument for Wealth Creation;

--Enhancing Productive Capacities—the Role of Health;

--Education;

--International Trade;

--Commodities and Services/Tourism;

--Energy;

--Enhancing Productive Capacities—the Role of Investment and Enterprise Development;

--Human Resources Development and Employment;

--Infrastructure Development;

--Transport; and

--Financing Growth and Development.

NGO FORUM AT LDC-III

The Forum of NGOs took place from 10-20 May 2001. It was attended by 1,500 participants, approximately one-third of whom were representatives from LDCs. A group of Brussels-based NGOs including Eurostep, Nationaal Centrum voor Ontwikkelingsamenwerking (NCOS or 11.11.11 as it is now known), International Cooperation for Development and Solidarity (CIDSE), and Solidar hosted the Forum. The Forum was organized by an International NGO Steering Committee and a Brussels-based secretariat.

In forum sessions before the official UN conference started, NGOs identified their priority issues, were briefed about arrangements for LDC-III, and completed the NGO Forum Policy Statement. The Statement calls for clear commitments and concrete results including debt cancellation, an agreement to untie aid, the empowerment of women, and market access for all LDC products without jeopardizing existing preferential arrangements with other developing countries. The Statement emphasizes the need for a comprehensive framework for transparent and accountable governance in both North and South and access to affordable medicines and treatment, especially to tackle the HIV/AIDS pandemic. Regarding trade, NGOs emphasized that no new commitments should be negotiated at the WTO until imbalances in the Uruguay Round Agreements had been addressed.

In parallel with the official conference, the NGO Forum sponsored a full programme of meetings on the issues at hand, dialogues with officials of the UN system and the EU, and daily briefings on the official conference. Mr. Annan attended the opening plenary and addressed the NGOs from the LDCs. “I am delighted,” he said, “that so many of you represent NGOs from the LDCs themselves. You are fighting the battle for human dignity against poverty, ignorance and disease every day—and you are fighting it on the ground, where it really counts. You know exactly what it means to live in an underdeveloped country. Your ideas about what needs doing are likely to be the most down-to-earth and practical, and therefore the most valuable. Everyone in this conference should be listening to you.”

He acknowledged the influence of NGO campaigns “especially when those of North and South come together, using the tools of new technology such as e-mail and the Internet, and work to build coalitions with like-minded governments.” Praising the campaign to ban landmines, the coalition for the International Criminal Court, and the Jubilee 2000 campaign for debt relief, he added: “We need a campaign for more open markets, which will muster the same moral force as the campaign to cancel debt.”

As negotiations on the POA got underway in the Committee of the Whole, the NGOs found that, unlike during the PrepComs, they were excluded from observing. They sent an open letter of protest to the President of the Conference and to the Secretary-General of UNCTAD. In a meeting with NGOs, Mr. Ricupero expressed his disappointment and surprise at the complaints and reiterated his and UNCTAD’s commitment to working with civil society.

An NGO Forum representative, Christine Mandela, was included in the concluding plenary of the conference. Her statement echoed the conclusions of the NGO Forum with regard to the results of the conference.

“The NGO Forum concluded that the overall outcome of the Third United Nations Conference on Least Developed Countries is disappointing in terms of the concrete commitments civil society was seeking. It singled out the following weaknesses:

Debt cancellation: The NGO Forum is extremely disappointed that LDC-III retains the framework of the Heavily Indebted Poor Countries Initiative (HIPC), which the NGO Forum consider completely inadequate for resolving the long-term problems of LDCs.

Official Development Assistance: It is deplorable that LDC-III signatories do not renew their commitment to raise ODA levels to 0.7% of GNP by 2005. In fact LDC-III failed to set any target whatever for increasing ODA—even on the ‘commitment’ to reach the lower 0.15% target mentioned in the text, donors have only resolved to ‘accelerate their endeavours to reach.’ The NGO Forum welcomes the decision by donors to implement the OECD-DAC recommendation to untie aid to LDCs, which will significantly increase the value of aid.

Trade: LDC-III gives no commitment to ensure that any reforms to the World Trade Organization system do not further undermine the interests of LDCs. It contains no agreement to address the fact that non-tariff barriers, and particularly protective measures disguised as sanitary standards, remain a severe impediment to LDCs trying to gain access to the markets of industrialized countries. While welcoming the UNCTAD initiative to hold a capacity-building session for LDC governments ahead of WTO negotiations in Qatar, the NGO Forum regrets that this initiative includes no provision for participation by civil society.

Environment: LDC-III did not go far enough in committing to ensure an environmentally sustainable development of LDCs, including providing additional resources to assist LDC countries in mitigating the impacts of climate change and action on the part of developing countries to reduce environmental degradation—notably ending the dumping of hazardous waste in LDCs.

Gender: LDC-III lacks any formal recognition of the need to introduce concrete measures to introduce women in LDCs, particularly poor rural women, to user-friendly legal instruments which empower instead of disempowering them.

Follow-up: NGOs will work to ensure the strategies identified in LDC-III (both in the United Nations Action Plan and by the NGO Forum) are followed up at international, regional, national and sub-national levels.

On the subject of good governance, the NGO Forum reiterates its call on the United Nations to take further steps to help governments around the world realize that governance is the business of all the people of a country, and not just the prerogative of its leaders.”

NGO FOLLOW-UP

At the end of the NGO Forum, NGOs agreed to establish a new structure, Civil Society LDCIII Watch, to monitor the Conference outcomes.

The objectives are to provide support to NGOs in each region monitoring the national plans of action, to play an advocacy role on behalf of LDCs, to represent LDC civil society, to disseminate information, and to monitor the implementation of the international programme of action.

Civil Society LDCIII Watch is composed of representatives from all LDC regions: Africa (4 representatives), Asia (1 representative), Pacific (1 representative) and Haiti (1 representative). Europe and North America are represented as development partners. Each region has also been asked to identify national focal points in all 49 LDCs to carry out work on the ground.

English-speaking Africa will act as the international and central focal point for the Civil Society LDCIII Watch for the first two years and there are plans to establish a secretariat in Tanzania. A first meeting later in 2001 will draw up a work programme, and discuss fundraising and other practical questions.

Contact

Gloria-Veronica Koch

Chief

Civil Society Outreach

UNCTAD

Palais des Nations

CH-1211 Geneva 10

Switzerland

telephone +41-22/907 5690

fax +41-22/907 0122

e-mail <gloria-veronica.koch@unctad.org>

NGO Forum