Asia's landlocked countries need stable policy framework; UN adopts 10-year Action Plan for 32 landlocked developing economies
By TIOL News Service
NEW YORK, NOV 06, 2014: THE United Nations Economic and Social Commission for Asia and the Pacific (ESCAP) yesterday said that Asia’s landlocked developing countries (LLDCs) need a stable investment-friendly and competitive macro-economic policy framework. It also called for action to promote economic diversification in order to reduce volatility of economic and export growth.
“Policies must maintain a competitive exchange rate, neutralizing tendencies towards appreciation and a stable macroeconomic environment with favourable credit conditions for the promotion of new economic activities,” said Shamshad Akhtar, Executive Secretary of ESCAP, during the launch of the Economic Diversification in Asian LLDCs: Prospects and Challenge report at the Second UN Conference on LLDCs, which wraps up today in Vienna, Austria.
Ms. Akhtar underscored that ESCAP’s research revealed that the more diversified the economy, the higher it’s gross domestic product and the lower the competition it faces in global markets. Results in the new report show that diversification moves in short steps, rather than large jumps, and that diversification is a path-dependent process, so that what a country produces today influences what sectors can emerge or develop in the immediate future.
“Some pathways can lead to new products, further diversification and improvement in a country’s productive capacity, whilst other paths spin off relatively fewer opportunities, providing less potential for economic growth and diversification,” she explained.
ESCAP’s analysis identifies the top export markets for potential new products from Asian LLDCs, along with new sectors to increase chances for success in diversification. Most product diversification opportunities for Asian LLDCs exist in five industries: base metals, chemicals, machinery and electrical equipment, plastic and rubber, and textiles, she noted.
While trade links with Europe and North America remain very important, Dr. Akhtar emphasized that the Asia-Pacific region also offers about a quarter of the export opportunities for potential new products of these sectors.
Meanwhile, a UN Conference concluded in Vienna, Austria yesterday with the adoption of a 10-year action plan aimed at accelerating sustainable development in the world’s 32 landlocked developing countries (LLDCs).
The Programme of Action adopted by the Second UN Conference on LLDCs contains six clearly defined priorities and encapsulates a unified stance by the international community on a broad array of crucial issues – from concrete steps toward the structural transformation of LLDC economies and infrastructure development, to improving international trade and bolstering regional integration and cooperation.
“We are strongly committed to the implementation of the [Programme of Action] to address, in a holistic manner, the special development needs and challenges of landlocked developing countries arising from their…remoteness and geographical constraints,” proclaimed the Declaration that culminated the three-day Conference, attended by more than 1,000 participants in the Austrian capital.
The 23-page outcome document was described by Gyan Chandra Acharya, Secretary-General of the Conference, as an important milestone in promoting the development agenda of LLDCs.
The document, for example, expresses an unambiguous commitment by all governments to ensure greater emphasis on reducing transit time, promoting infrastructure development and maintenance, ensuring trade facilitation measures in an accelerated manner, besides linking them with the promotion of economic diversification, structural transformation, connectivity to global value chains and regional integration.
This holistic approach together with a clear call to ensure coherence with the global processes is expected to enable the LLDCs to achieve sustained and sustainable economic growth and ensure their meaningful integration into the global economy.
“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 Mr. Acharya in his closing remarks.
He added that the text was “holistic” in that it takes up transit, trade, and infrastructure issues together with the regional cooperation, structural transformation and coherence with the global processes in a pronounced manner as priorities.
Mr. Acharya further stressed that while recognizing the special challenges and vulnerabilities of LLDCs, Member States, through the outcome document, underscored that the landlocked countries have to transform themselves into land linked countries in order to reap full benefits from regional cooperation and globalization.
The outcome document is action-oriented, as governments clearly spelled out tangible actions to be taken by LLDCs, transit countries and development partners in each of the six priority areas identified together with clear national, regional and global level implementation, monitoring and review, explained Mr. Acharya, who is also the UN High Representative for the Least Developed Countries, Landlocked Developing Countries and Small Island Developing States.
