I thank you, Madam Chair, and the President of the ECOSOC for convening us today.
I thank UNCTAD SG Grynspan and USG Rattray for sharing with us their valuable insights on this important topic.
My delegation aligns itself with the excellent statement made by the Chair of the LDC Group. Allow me to share a few additional thoughts in my national capacity.
[Excellencies, Distinguished Delegates] As we heard, the COVID-19 pandemic hit the LDCs hardest. The various studies undertaken by WTO, UNCTAD, CDP, and OHRLLS showed the disproportionate impact of the pandemic on the LDCs exacerbated by their pre-existing challenges.
And this situation can be largely attributed to their lack of productive capacity. Their economies primarily rely on a small basket of exportable goods and services, tourism, or remittances, and all these sectors faced unprecedented challenges due to disruption in global trade and FDI. The climate vulnerable LDCs are in double jeopardy—both by the pandemic and natural disasters.
Against this backdrop, we all recognize the imperative to enhance the productive capacity of the LDCs in agriculture, manufacturing and services sectors to create new opportunities for them. They need to move on the higher development echelon by shifting resources and production frontiers from low value-added to higher value-added areas.
The challenges of such structural transformation in LDCs, however, are quite daunting. They have limited or no access to modern technologies. They have lack of access to credit. And they face unfavorable legal and regulatory frameworks to market entry. Added to that are also infrastructural, human capacities, and investment gaps.
Recognizing these challenges, the draft Doha Programme of Action has identified productive capacity building and structural transformation as one of the key priority areas. The LDCs need enhanced support to be able to compete at higher production frontiers in regional and global value chains.
Let me share a few specific thoughts in this regard:
First, as global efforts focus on fast and sustainable recovery from the pandemic, the LDCs must be taken along too. And that must start with ensuring access to vaccines to the LDCs, as they are the furthest behind in this respect. The average vaccination coverage in the LDCs is below 2%. One of the most effective solutions to this problem would be to utilize TRIPs’ waiver to transfer technology and know-hows to LDCs.
Second, lack of product diversification and high dependence on commodity prices are the primary reasons that make the export of LDCs extremely vulnerable to external shocks.
To reverse this situation, bold actions would be needed to promote export diversification, as well as, a firm commitment of DFQF market access to OECD markets.
The graduating and graduated countries would need special support measures to prevent any slide back. And that should include at least 12 years extension of LDC-specific support and flexibilities for graduated countries.
Third, LDCs need new and innovative tools to adopt evidence-based measures to foster productive capacities and structural economic transformation.
We appreciate the efforts of the UNCTAD to introduce the Productive Capacities Index (PCI) to help LDCs assess their relative strengths and weaknesses and take appropriate actions to accelerate growth and boost resilience.
Fourth, the pandemic is a reminder that investment in STI is necessary to build resilience against such crises. The LDCs need robust research infrastructure, sufficient funding, and incentives to ensure a conducive environment where STI can flourish. They also need enhanced support to build necessary infrastructure and digital eco-system to reap the maximum benefits from e-commerce.
Fifth, funding gap remains a key challenge in infrastructure development. LDCs need a new funding compact with their donors, MDBs and RDBs, and private sectors to accelerate investment and regain the lost ground in SDGs implementation.
Finally, LDCs need an incentives-based support structure of policies and strategies to boost productive capacities. This will in turn ensure an inclusive process of structural transformation in the LDCs; with the ultimate objective to achieve ‘graduation with momentum’. That is the aspiration of all LDCs; and that should also be the goal of the international community and of the development partners.
The LDC5 Conference provides an opportunity to make some real progress in this respect.
I thank you all.