Global Policy Forum

By Anwarul Karim Chowdhury

A look at the composition of the conference would tell the entire story. While the forty-nine LDCs had sent high-level representatives to the meeting, in many cases national leaders, such as, Sheikh Hasina, the list of attendees from the developed countries was significantly less impressive. The United States, for example, was represented by the head of the USAID, who has very little policy-making authority. This, by itself, shows the priority that the developed countries are giving to these issues.

A high-profile gathering of international leaders at the United Nations conference in Brussels met last week to find ways to help the world's least developed countries (LDCs) come out from the vicious cycle of misery and poverty. The European Union, which hosted the event, spared no expense in highlighting the condition of these countries. However, like many more before it, the conference turned out to be little more than a "high-cost, low-output talking shop".

This is not the first UN conference on poverty. In fact, it is the third. The first two conferences were held in Paris in 1980 and 1990, respectively. There are now forty-nine countries that fit into the least developed category, almost double the number thirty years ago. The membership of the LDCs now stretch from Haiti in the Western Hemisphere to Bangladesh and Cambodia in Asia; with the bulk of the members coming from sub-Saharan Africa. Almost half of the total population in these countries around 300 million people survive on less than a US dollar a day.

In 1990, at the second UN conference in Paris, the plight of the least developed countries was the subject of an ambitious programme of action. Promises were made on three specific issues: trade, aid, and debt. The developed countries had pledged to help the world's poor. But few countries, if any, have translated their pledge into actions.

On trade, a World Bank publication recently suggested that the least developed countries are losing about 2.5 billion US dollars annually in export revenue due to tariff. Non-tariff barriers including health and safety regulations cost even more. The worst offender is the United States. A recent report by Oxfam has shown that for every dollar in aid that Bangladesh receives from the United States, it loses eight dollars in trade restrictions on textile imports. This translates into lower wages and reduced employment opportunities for the garment factory workers in this country.

While it is true that average tariffs have decreased over the years, they are exceptionally high in labor-intensive sectors, such as, agriculture, textiles, where the LDCs may have a comparative advantage.

When it comes to aid and debt relief, the record has been even less aspiring than on trade. The developed nations themselves had agreed to spend 0.7 per cent of their GDP on development assistance. But today they spend only 0.2 per cent on average. In inflation-adjusted per capita terms, net official development aid to the poorest countries have dropped by about 45 per cent during the last decade. At the conference, the only pledges on aid came mostly from the Scandinavian countries. Interestingly, these are the only countries who have already met their pledged target.

For the LDCs, the burden of foreign debt represents an intolerable hindrance to social and economic development. These countries have to allocate a considerable share of their national income for debt servicing, thereby reducing expenditures on social services, education, and health. Studies have repeatedly shown that such misallocation of resources have led to uncontrolled migration flows and distortions in, among others, agricultural production decisions, with adverse effects on the rural economies in these countries. Added to this, LDCs are more often than not, forced to liberalize their markets at breakneck speed, leading to disastrous consequences.

A look at the composition of the conference would tell the entire story. While the forty-nine LDCs had sent high-level representatives to the meeting, in many cases national leaders, such as, Sheikh Hasina, the list of attendees from the developed countries was significantly less impressive. The United States, for example, was represented by the head of the USAID, who has very little policy-making authority. This, by itself, shows the priority that the developed countries are giving to these issues.

Those who are suggesting that the conference have been successful in highlighting a number of initiatives refer to the European Union's "everything but arms" (EBA) plan announced earlier this year which provides free access to LDC imports and also the OECD decision to untie most development aid to these countries. However, a number of recent studies done by UNCTAD suggest that the EBA will have little impact on the trade sector in the least developed countries as most of their goods already enter the EU duty- and quota-free. The problem that needs to be addressed is how this EBA approach can be extended to the US, Canada, and Japan, which have much higher barriers to LDC trade. This conference has done nothing in addressing this issue.

As was the case with the two previous UN conferences on the least developed countries, the latest UN conference in Brussels started with its stated aim to break the cycle of misery and poverty among the world's poor. But the week-long meeting was filled with rhetoric and ambitious goals rather than concrete action plans from the developed countries. These countries have been pledging for a long time to help the world's poor. But their actions do not match their rhetoric. What is needed now is not more promises but real action; what is at stake is the lives of millions of people and the credibility of the global economic system.

The fact that the conference ended with a final declaration and adopted a draft programme of action for the next decade is nothing new nor encouraging. It is more ritualistic than substantive.

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