NGLS Roundup, no. 60, September 2000 PREPARATORY COMMITTEE FOR THE THIRD UN CONFERENCE ON LDCS INTRODUCTION The Third United Nations Conference on the Least Developed Countries (LDC-III) will take place in Brussels (Belgium) from 14-20 May 2001. There are many stages to its preparation including national preparations, regional meetings, and at the global level the work of the intergovernmental preparatory committee (PrepCom). Also at the international level the preparatory process includes several inter-agency meetings of UN institutions and bodies to discuss coordination and the agencies' respective contributions. A Consultative Forum comprising representatives of UN Member States, intergovernmental organizations, UN agencies and NGOs has also been established to consider organizational and substantive issues, resource mobilization and other preparatory matters. In each LDC, a national preparatory committee has been set up to draft a National Plan of Action based on each country's needs and priorities and comprising a National Development Strategy for the coming decade. The conference will undertake an assessment of the implementation of the 1990 Programme of Action (POA), which emerged from the Second UN Conference on LDCs, and the elaboration of a new global POA. INTERGOVERNMENTAL PREPARATORY COMMITTEE The first meeting of the PrepCom took place at UN headquarters in New York from 24-28 July 2000. It decided on the overarching theme of poverty eradication for the LDC-III; heard inputs from national, regional and global levels and from NGOs; and began a substantive assessment of the 1990 POA. It also addressed organizational matters of the conference and its preparatory process, and developed a programme of work for the next ten months. The main task of the PrepCom is to lay the groundwork, and advance the final outcome of the Conference. Its next meeting will take place at UN headquarters in April 2001. The UN General Assembly has designated the Secretary-General of the UN Conference on Trade and Development (UNCTAD), Rubens Ricupero, as Secretary-General of the Conference and UNCTAD as the Conference Secretariat. In his opening statement to the PrepCom, he emphasized that "the central question that we must address is the 20-year old credibility problem over commitments to reverse the increasing marginalization of these countries and to put them on a sustainable development path. After two previous conferences, their respective Programmes of Action and the sad knowledge that neither of them has been implemented, the least developed countries are legitimately asking themselves why they should put their faith in a third conference and yet another Global Programme of Action. They may be tempted to say, deja vu." He added that "if the global economic system, for example, had allowed LDCs to integrate more fully, perhaps they would not have had to depend so much on external support. Systemic imbalances have contributed to restricting their growth and depressing their standards of living." Ambassador Anwarul Karim Chowdhury (Bangladesh), Coordinator of the Least Developed Countries, also addressed the imbalance in the global economy. "We are meeting at a time when the world has been experiencing unprecedented growth and affluence," he said. "In the last ten years, since the adoption of the Paris Programme of Action, there have been major changes in political paradigms and significant breakthroughs in innovation and technology. A revolution in information and communication technology has brought sweeping change in the way business is done and international relations are influenced. Globalization, though bringing mixed results, has stimulated trade between nations at a scale never seen before....All summed up in accumulation of unprecedented global wealth. A group of countries, the LDCs, have unfortunately remained untouched by this wide-ranging change....Indeed their opportunities have diminished, their risks increased and their challenges made more complex. They have been bypassed in trade, investment and capital flows; advancement in technology benefited them little; their competitiveness has further eroded; poverty became widespread; and living standards in many of them declined." The LDC Coordinator identified the following priority areas for action: reorientation of aid programmes, decisive reduction of debt burden, encouragement of foreign direct investment (FDI) in LDCs, market access, emphasis on capacity building, and the eradication of poverty. *************************************************************************** LDCs on the UN Agenda Since 1971 The number of least developed countries has almost doubled--from 25 to 48--since the creation of the LDC category by the United Nations in 1971. The category is based on a set of criteria linked to the following indicators: per capita gross domestic product (GDP, under US$800 in 1997); physical quality of life (health, nutrition and education); and economic diversification (share of manufacturing in GDP, share of industry in the labour force, energy consumption and merchandise export concentration). The criteria defining LDCs are currently being revised by the Economic and Social Council (ECOSOC), and a new set of criteria is being proposed for adoption this year by the UN General Assembly. This revision, the third in 30 years, would likely result in the adoption of a new criterion of economic vulnerability. At present, the 48 least developed countries--33 in Africa, nine in Asia, one in the Caribbean and five in the Pacific region--are: Afghanistan, Angola, Bangladesh, Benin, Bhutan, Burkina Faso, Burundi, Cambodia, Cape Verde, Central African Republic, Chad, Comoros, Democratic Republic of the Congo, Djibouti, Equatorial Guinea, Eritrea, Ethiopia, Gambia, Guinea, Guinea-Bissau, Haiti, Kiribati, Lao People's Democratic Republic, Lesotho, Liberia, Madagascar, Malawi, Maldives, Mali, Mauritania, Mozambique, Myanmar, Nepal, Niger, Rwanda, Samoa, Sao Tome and Principe, Sierra Leone, Solomon Islands, Somalia, Sudan, Togo, Tuvalu, Uganda, United Republic of Tanzania, Vanuatu, Yemen and Zambia. The United Nations has convened two major conferences on the LDCs in 1981 and 1990, both held in Paris. *************************************************************************** Regional Meetings The meeting of the PrepCom was preceded by three expert meetings: in Addis Ababa (Ethiopia) for English-speaking African LDCs from 27-29 March 2000; in Kathmandu (Nepal) for Asian and Pacific LDCs from 3-5 April 2000; and in Niamey (Niger) for French-speaking LDCs from 18-20 April 2000. The expert-level meeting for Anglophone African LDCs noted that real per capita income for a median LDC was lower in 1999 than in 1979; poverty has remained pervasive and severe despite structural reforms; external aid to African LDCs has fallen by 24% in 1990s; and Africa continues to be caught up in a "structuralist trap with a dualistic product market." African LDCs, participants observed, "to a large measure produce what they do not consume and consume what they do not produce." The meeting addressed the issues of financing for development and of trade, market access and the supply capacity of LDCs. Participants said some policies of the international community were inconsistent with its declared commitment to integrating the LDCs into the global economy, and reflected policy incoherence among its various constituents including the donors and intergovernmental agencies. In its recommendations the meeting highlighted, among other things, the importance of: -- guaranteed, secure and predictable market access by means of bound, duty-free and quota-free entry to all products originating in LDCs; -- policy coherence on the part of development partners; -- conducive macro-economic conditions to overcome supply-side constraints; -- regional cooperation among LDCs; and -- transfer of technology, protection of traditional knowledge and folklore and other cultural goods and services. *************************************************************************** OAU Heads of State and Government Adopt Declaration on LDC Conference At their recent summit in Lome (Togo), Heads of State and Government of the Organization of African Unity (OAU) adopted a declaration on LDC-III. They noted with concern that the socio-economic situation of the 33 African LDCs had continued to deteriorate and that their situation had been exacerbated by external debt and inadequate infrastructure, as well as by conflicts in some regions and natural disasters leading to a rising level of poverty. The statement said that despite the drastic structural adjustment and policy reforms carried out by their countries, the number of African LDCs had not decreased. The international community, including the institutions within the United Nations system, had demonstrated its support to the LDCs through special initiatives targeted at LDCs, the Declaration said. In this regard, it welcomed the opportunity provided by LDC-III to go beyond general declarations of intent and commitment and embark on concrete implementable actions directed at ameliorating the socio-economic situation in the LDCs, with a view to attaining the internationally agreed target of reducing the level of poverty by half by 2015. On the debt problem of the LDCs, the statement said the African Heads of State and Government welcomed the announcement concerning the enhancement of the Heavily Indebted Poor Countries (HIPC) Debt Initiative and called on the international community to provide adequate resources for the effective operation of the programme. They also called on their creditor countries and multilateral financial institutions to provide real debt relief including debt cancellation in favour of all LDCs, complemented by increased capital flows--particularly ODA--to meet the internationally agreed target, and FDI. They undertook to commit the sums released for eradication of poverty and pledged to support African LDCs in preparing for the Conference and to ensure their effective participation. *************************************************************************** High-Level Panel for Review of Implementation of the Programme of Action for the 1990s To assist with the substantive preparations for the conference, Mr. Ricupero has appointed a seven-member High-Level Panel for the Review of the Implementation of the Programme of Action for the 1990s. Its mandate is to assess the results of the Programme of Action during the 1990s at the country level; review the implementation of international support measures, particularly in the area of official development assistance (ODA), investment and trade; and suggest appropriate policy measures as a contribution towards the preparation of the next POA. The Chair of the Panel, Mary Chinery-Hesse, reported to the PrepCom that the Panel found a general lack of awareness of the content of the POA, its implications for policy making and in particular the responsibilities and commitments undertaken by LDCs in the POA. Nevertheless, she reported, LDC governments have initiated and implemented policies in the last ten years that are in accordance with the provisions of the POA and, in a few cases, it has actually served as an input for the design of national development plans. A central concern in the countries visited by the Panel was that, despite serious efforts on their part, there had been major shortfalls in the support envisaged under the POA for the 1990s from their development partners in terms of aid, debt relief, market access and foreign investment. Therefore the potential benefits expected from domestic efforts and policy reforms had been limited. Other shortcomings of the 1990 POA found by the Panel included a lack of focus; absence of benchmarks and indicators to measure implementation; a narrow definition of stakeholders by identifying only the LDC governments and their development partners; and a lack of recognition of regional integration issues. Interactive Debates and Assessment Some of the findings of the Panel were echoed in the interactive debates organized during the PrepCom to address domestic policy frameworks and international support measures; development and strengthening of productive capacity; social development; and implementation and follow-up mechanisms for the outcome of LDC-III. In the debate on implementation and follow-up mechanisms for the outcome of LDC-III, participants raised concerns about the lack of awareness of the POA for the 1990s, that the Programme lacked clearly-defined benchmarks and targets, and it was not linked to national planning. They also concluded that country-level coordination mechanisms were inadequately formulated, with a proliferation of initiatives and the role of civil society not clearly defined. During the debate both the World Bank's Operations Evaluation Department (OED) and the United Nations Development Programme (UNDP) cited the results of evaluations they had conducted that addressed the impact of aid coordination on development effectiveness. The World Bank representative reported on the 1999 Annual Review of Development Effectiveness, which found that "lack of ownership has compromised the development effectiveness of many Bank-supported operations. Projects have tended to perform poorly when they were prepared by outsiders, did not engage stakeholders and beneficiaries, exceeded local implementation capacity, and did not engender borrower commitment." UNDP has undertaken a comprehensive evaluation of the Round-Table Mechanism (RTM), which encompasses all major aid coordination issues and actors. Nikhil Chandavarkar, Director of the Division for United Nations Affairs in the Bureau for Resources and Strategic Partnerships, presented UNDP's findings to the PrepCom. "This evaluation was conducted simultaneously with the World Bank's review of its own role in aid coordination--particularly the consultative group mechanism--and there was great opportunity for both evaluation teams to cross-fertilize ideas and methodologies," he said. "As a result, some of the findings of the two evaluations are very similar. For example, the World Bank also found that donor support to aid coordination tends to be supply-driven and ultimately ineffective at the country level; aid coordination activities are seen as having little or no positive effect on country capacity; developing countries lack both the capacity and commitment to assume a leadership role in the aid coordination process; and institutional capacities at the country level need to be bolstered." In his summary Ambassador Jacques Scavee (Belgium), Chair of the PrepCom, concluded that existing coordination mechanisms for monitoring and follow-up should be kept in place but improved. He emphasized that public education should be promoted to reverse the decline of ODA and other external support measures, and that aid should be coordinated and country-led. He said clear benchmarks and targets should be established in the new POA, and UNCTAD should play its role in monitoring, follow-up and implementation of that new Programme. PrepCom Sets Timetable In addition to the substantive assessments, the PrepCom heard presentations from Member States and the Secretariat concerning the development of a new POA and the tentative schedule leading up to the conference. Regarding a new POA, it was decided that the Conference Secretariat would prepare a draft annotated outline by 1 October 2000 for eventual review by the PrepCom at its second session in the first week of April 2001. Prior to this the draft document would be brought to the attention of all relevant intergovernmental bodies; and the PrepCom Chair emphasized the importance of consulting the UNCTAD Trade and Development Board and the United Nations Development Group. In the preparation of the first and subsequent drafts, inputs would include: -- further submissions of the country-level programmes of action; -- the outcomes of high-level regional events organized jointly by the Conference Secretariat and the Economic and Social Commission for Asia and the Pacific (ESCAP) in Dhaka (Bangladesh), and a meeting of African Ministers of Finance and Planning to be organized by the Economic Commission for Africa (ECA) in Addis Ababa (Ethiopia), both in November 2000; -- the outcome of the consideration of the Report of the Secretary-General to the General Assembly on the status of the preparatory process for the Conference; -- final versions of the country-level programmes of action; -- the outcome of the private sector meeting to be held from 29-31 January 2001 in Oslo (Norway); -- a meeting on women to be organized during the third week of February 2001; and -- NGO preparatory events. The Preparatory Committee elected the ten members of its bureau, chaired by Jacques Scavee (Belgium). The following eight Vice-Chairs were also elected: Oussou Edouard Aho-Glele (Benin), Bjorn Skogmo (Norway), Pierre Lelong (Haiti), Sandor Mozes (Hungary), Yuji Kumamaru (Japan), Alounkeo Kittikhoun (Lao People's Democratic Republic), Subhas Chandra Mungra (Suriname), and Richard T. Dogani (United Republic of Tanzania), who also acted as Rapporteur. NGO PARTICIPATION Some 50 NGO delegates from South and North, including 15 representatives from LDCs, met at UN headquarters in New York from 24 26 July 2000 to prepare for LDC-III and to follow the work of the first PrepCom. The NGO meeting, which considered the process for civil society organizations' involvement in the conference, prepared a statement for the PrepCom (see back page). Regarding participation in the Conference and its preparations, the NGOs favoured an integrative approach rather than a separate two-track parallel process of debate and discussion. They requested that the PrepCom adopt rules of procedure to allow their participation. "We want NGOs to be fully and actively involved in the preparation of the Country Reports, National Action Plans and the Global Action Plan; in any planned intersessional meetings, the second PrepCom and the Conference itself," they said, "and we call on all governments to ensure that this involvement becomes a reality at a national as well as a global level." The Liaison Committee of Development NGOs to the European Union is hosting and coordinating the preparations for an NGO Forum to be held in Brussels at the time of the conference. Excerpts from the NGO Statement, Delivered to the PrepCom on 24 July 2000 by James Mackie, Secretary General, Liaison Committee of Development NGOs to the European Union "We attach great importance to the opportunity for advancing the cause of the Least Developed Countries that this third Conference represents. The Conference needs to reinforce a coherent global framework for the eradication of poverty. There is an urgent need to tackle increasing global inequalities. Critical to this is the adoption of a rights-based approach to development. We are deeply concerned by the prospect that this Conference could achieve very little. A quick review of the agreements of the previous two Paris Conferences for the LDCs in 1981 and 1991 indicates how little has been achieved in the past 20 years. There is a serious danger that LDC-III will do nothing but reiterate a hollow set of promises that the world no longer believes donor countries and developing countries are really committed to achieving. Since LDC-II, global ODA has never reached the level of the Paris commitments of 0.7% of gross national product (GNP) and 0.15%, apart from a tiny minority of donor countries. Initiatives to cancel debt have advanced at a snail's pace and so far show extremely meagre results. In addition, the world context in which LDCs have to operate has become increasingly unfavourable to their needs, the establishment of the WTO paid scant regard to their interests, and the increasing globalization of the world economy means more than ever before that the rich are becoming richer while the poor are becoming poorer. LDC-III therefore comes at an opportune time; the challenge facing us has never been greater, but equally this means that the danger of failure and ridicule for the process is that much higher. It will require great political will to achieve a breakthrough and every effort must be made to assure that this is achieved. It has been particularly disturbing that this First Preparatory Committee should be held in the week following the Okinawa G-8 Summit when the leaders of the richest countries in the world had nothing to say for LDCs. A year after the Cologne Summit, which concluded with high expectations for debt cancellation, world leaders at the Okinawa Summit made no effort to renew this commitment or even seek to unblock the slow pace at which debt cancellation has moved forward since then. The cost of the summit, at US$800 million, contrasts sharply with the planned US$20 million it is proposed to raise for the LDC Trust Fund. In the context of such excesses, the low levels of commitments of donors to the LDCs are simply not credible. Such events have also served to highlight for us the inadequacy of the analysis being put forward for the LDC Conference at this stage. Simply seeking to include the LDCs in a liberalized world economy without seriously addressing their problems will achieve nothing and only ensure that the richer countries become even richer, with poorer countries getting poorer even faster. If we really mean what we say about A Global New Deal' then we need to be far more innovative in our thinking and reframe the whole debate....We need to really examine the causes of poverty seriously and then be honest with ourselves about what needs to be done to break the cycle. We must be fully aware of the historical causes of poverty. We also need to examine closely the structural causes of poverty. Here there is perhaps less consensus, but if we are honest we know that it is absurd to claim that there is a lack of funds for investment in LDCs or say that there is no capacity to save in Africa; when we all know full well that many LDCs spend 40% of their GNP on debt servicing and other outflows of funds from LDCs are reaching record levels. Equally, development in many LDC countries is held back by a range of issues including HIV/AIDS, poor infrastructure, high unemployment and conflict. Countries such as Angola, Congo or Sierra Leone are rich in natural resources and without continuing war could achieve rapid development. Restricting trade in diamonds may be part of the solution, but the conflicts are also fuelled by the international trade in arms produced in the North. Development in these countries will never be possible if this question is not tackled head on. There are also major institutional causes of poverty: the formulation of international agreements is frequently unfavourable to the interests of LDCs, the WTO being perhaps the single most important case in point at the present time. Again, if LDC-III is going to achieve anything, it needs to confront such institutional constraints and ensure that a more favourable international environment for development is really created. Some form of breakthrough is essential if the world is going to take this Conference seriously. Broadly we all know the solutions. We need to provide for the five basic needs of food security, education, housing, health and a living wage. But to achieve this, we need to muster the political will to make the fundamental changes required. Amongst the donor community: -- The current model of free market economics has not worked in the LDCs; there needs to be a fundamental rethinking of the strategy. -- Debt simply must be cancelled. [The Summit in] Okinawa produced no new push on this key issue and yet if there was one thing the G-8 could have done to counter criticism on the cost of the event, pledging to radically speed up and improve access to HIPC would have been it. -- The concerns of the LDCs with regard to inequities within the WTO trade arrangements should also be met: increasing exports is vital and for this free access to Northern markets for all, and not just essentially all' LDC products is needed. -- ODA levels have to go up quickly, otherwise there is absolutely no chance that we will meet the international development targets of the OECD Development Assistance Committee (DAC) Strategy for the 21st Century by 2015. -- Our attitudes to aid coordination must also be radically revised. Bilateral donors, UN agencies and the international financial institutions must all be willing to genuinely work together and not duplicate and compete amongst themselves. Aid should be united. -- There should be a total ban on arms sales. The challenge to the LDCs includes: -- Governments need to recover the moral authority through good governance in order to strengthen their hand in global negotiations; and -- Creating a spirit of solidarity between themselves, developing a common agenda and building a common front on vital issues." CONTACTS For further information on LDC-III and NGO participation, 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 website (www.unctad.org) For further information on the NGO Forum, contact: Daphne Davis Coordinator, NGO Forum Liaison Committee of Development NGOs to the European Union 10, Square Ambiorix B-1000 Brussels, Belgium telephone +32-2/743 8763 fax +32-2/732 1934 e-mail website (www.oneworld.org/liaison) This edition of NGLS Roundup was prepared by the United Nations Non-Governmental Liaison Service (NGLS). The NGLS Roundup is produced for NGOs and others interested in the institutions, policies and activities of the UN system and is not an official record.