World's poorest nations' share in global trade remains dismal

New Delhi, Sept 26 (UNI) Stating that the share of global exports of the world's least developed countries (LDCs) has increased only marginally from 0.5 per cent to 0.6 to 0.8 per cent in the last ten years, World Trade Organisation Chief Pascal Lamy has called for more aid to raise trade capacity of these nations.

In his address at a pledging conference for 'A New Enhanced Integrated Framework for Least Developed Countries' in Stockholm yesterday, he said new opportunities that he hoped will result from the Doha Development Agenda translation into trade realities for the LDCs.

In 1997, the world's then 49 poorest nations share of global exports was just half a per cent, according to WTO. Seventy per cent of this comprised of primary commodities, mainly minerals and tropical agricultural products.

Despite a decade of substantial economic growth in most developing and developed countries, the LDCs' export share has increased only marginally to 0.6 per cent, while their share in the world's imports is today estimated at 0.8 per cent, Lamy said.

Reviewing the progress of integrated framework launched by the international community in 1997 to help the world's poorest nations increase their trade share, Lamy said ten years later LDCs' limited capacity to broaden their export product base is due to still limited institutional capacity and poor infrastructure that continue to undermine their capacity to benefit fully from the project.

An earlier evaluation of the initiative done in 2003-04, according to Lamy, revealed three weaknesses that severely limited the effectiveness of this project.

He said it was found that trade-related reforms were not being adequately mainstreamed into the countries' development strategies.

Secondly, lack of coordination among donors sometimes resulted in conflicting and overlapping objectives. And finally, only limited funding was available for projects once a country's priorities had been identified.

After this review, WTO set up a task force in 2005 to address the weaknesses and enhance the effectiveness of the Integrated Framework.

Its recommendations, adopted in July 2006, form the core of what it now called Enhanced Integrated Framework.

The task force recommended increase, predictable and additional funding on a multi-year basis, strengthening institutional capacity, including mainstreaming trade into national development plans, by recipient countries and improving the project's decision-making and management structure.

But Lamy said predictable and additional funding over a multi-year basis on its own will not enhance its effectiveness unless governments in recepient countries are fully on board in identifying and formulating their priorities.

Such LDCs, he said, should also be committed to integrating trade into their development strategies, he added.

The WTO chief , at the same time, also called for involvement of the private sector in the process.

He said WTO is now setting up a small secretariat in Geneva which will be reporting to the Enhanced Integrated Framework Board on policy matters. It is also scouting for a manager to handle the trust fund set up under the Framework to help LDCs, he added.

UNI