We are five years into the implementation of the Istanbul Program of Action for the Least Developed Countries, a compact between the most vulnerable countries and their development partners. This week, the international community is meeting in Antalya, Turkey, to assess progress made so far toward sustainable development in LDCs and to chart a way forward for the remaining five years.
LDCs are countries at the bottom of the development ladder. There are 48 LDCs: 34 in Africa, 13 in Asia Pacific and one in Latin America and the Caribbean. The population living in LDCs totals almost 1 billion, with young people accounting for a significant share of this figure.
What progress has been made?
Most of the successes in the implementation of the Istanbul Program of Action that were made in the second half of 2000s have been sustained. There has been visible progress in reducing child and maternal mortality rates. Gender parity and women’s empowerment has made some headway. A growing share of the population of the world’s most vulnerable countries has seen increased access to and use of information and communication technology. Mobile cellular and internet subscriptions, for instance, continue to improve.
Some operators in these countries have pioneered world-class services and applications. One such example in Tanzania is M-PESA, which provides mobile banking services, including international remittance services, to hard-to-reach communities and groups, therefore contributing to improved financial inclusiveness. Another example is the maternal healthcare app developed by an operator in Myanmar, which provides a wealth of useful maternal, child health and wellness information to women during and after pregnancy.
The momentum seen in the ICT sector also reverberates in transport and energy, although huge gaps persists in these sectors. Road and railway transportation and power generation have received greater attention. Commitments in favour of better road and railway connections within the LDCs and with neighboring countries combined with supportive infrastructure finance, from financial institutions and emerging countries, have resulted in unprecedented projects and plans to upgrade and expand existing infrastructure in such LDCs as Ethiopia, Laos, Myanmar, Rwanda, Tanzania and Uganda. These combined efforts have also built major hydroelectric projects in Ethiopia, Bhutan and Guinea.
In many LDCs, improved infrastructure and increased power supply have been part of broader strategies aimed at facilitating industrialization. Ethiopia, Laos and Uganda are taking important steps toward joining Bangladesh and Cambodia in the club of LDCs with a strong manufacturing base. Expanding production and export bases and moving economies toward high-productivity activities and factors can help lift a country out of the LDC category.
Although impressive, success stories in industrialization and structural transformation are only at the infant stage and hard to discern. Moreover, they have yet to be spread across the majority of LDCs.
Low-productivity activities such as subsistence and rain-fed agriculture, as well as extractive industries featuring limited linkages with the rest of the national economy, still dominate in most LDCs. This has resulted in persistent extreme poverty. Of all groups of countries, LDCs continue to post the highest poverty headcount: almost half of the citizens of LDCs live in extreme poverty.
What obstacles remain?
The limited progress made in reducing extreme poverty has gone hand in hand with increased
vulnerability to economic, climate change, natural and health-related shocks. The recent significant decline in commodity prices has negatively affected the export earnings and economic growth of LDCs. Rising sea levels, coastal erosion, salinization and depletion of aquifers, ocean acidification, desertification, land degradation and melting of glaciers have also disproportionately affected the LDCs because of their high exposure and limited adaptation capacity. Although they have 12 percent of the world population, LDCs account for 67 percent of deaths associated with climate-related shocks.
One illustration of the LDCs’ extreme vulnerability is the magnitude of impact from natural shocks. When hit by Cyclone Pam, Vanuatu sustained property damages and losses worth the equivalent of 61 percent of its GDP. In the case of Nepal, estimates of the economic losses triggered by the devastating earthquakes stood at a third of the country’s gross domestic product.
Health pandemics constitute another serious concern. In addition to its human and social costs, the outbreak of Ebola caused severe economic hardship — depressing economic growth by up to 4 percent and seriously pressuring public finances in Guinea, Liberia and Sierra Leone.
LDCs are also not immune from global and regional security threats. Terrorist attacks in Sahelian LDCs and their neighboring regions have caused human casualties, disrupted international trade, and displaced populations. These countries are under pressure to divert scarce public resources away from development activities. Again, this does not bode well for the development outlook of affected LDCs.
Put together, all these shocks and their severe impacts are symptomatic of the LDCs’ acute vulnerabilities and limited abilities to respond effectively. It is also further confirmation of the need for increased attention and comprehensive and sustained support from the international community.
Countries that have made significant headway toward fulfilling the development aspirations set in the Istanbul Program of Action are those that had three ingredients working together: international development cooperation, strong national leadership, and inclusive and accountable institutions. Enhanced official development assistance, supportive trade and investment policies, and crisis mitigation measures play an important role, complementing domestic resources and institutions.
The midterm review of the Istanbul Programme of Action provides an opportunity to emphasize that this is the time for action, and it calls for enhanced partnership. It is worthy of our collective commitment because supporting the most vulnerable countries is also an investment in preventing global instability and insecurity. Let us not miss this opportunity to scale up our support and deliver results on the ground.
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