Nov 25, 2015
Session 1 – Ministerial Debate on progress made by LDCs towards graduation
Thank you Under Secretary General Acharya for your introductory remarks;
Mr. President of the Conference, Minister Abtew
Director General of UNIDO, LI Yong
Executive Director UNODC, Fedotov
Deputy Director Generals Agah and Nishikawa
Excellencies, ladies and gentlemen
It is a pleasure to be here today.
I would like to start by emphasizing that support to the LDCs and the IPoA’s implementation is at the heart of UNDP’s work. 74 per cent of UNDP’s core programme resources every year are allocated to LDCs. In other words, three fourths of our work and of the resources that we mobilise support the acceleration of sustainable development in the LDCs.
Some examples of our work under include the African Facility for Inclusive Markets (AFIM) which supports the strengthening of cross-border value chains. AFIM has worked with Uganda, Tanzania, Mali and Burkina Faso on value chains for several agricultural commodities, including onions and mangoes.
Through work on extractive industries, Liberia, Yemen and Zambia have improved their revenue management and economic diversification strategies.
In partnership with the Enhanced Integrated Framework (EIF) and WTO colleagues, we support LDCs’ efforts towards developing trade capacities and mainstreaming trade in national development strategies. The value chain of key exporting sectors such as cassava in Cambodia, and vanilla and ylang-ylang in Comoros has been developed while promoting the social and environmental sustainability of these sectors.
The renewable energy, energy efficiency, and energy access objectives lead towards ensuring universal access to modern energy for the poor and enhancing quality, security and affordability of modern energy, which is critical for industry and manufacturing. No economy can develop without energy let alone industrialisation.
This includes expanding access to electricity on -and off-grid, decentralized whenever possible and based on clean energy technologies; clean fuel and devices for cooking and heating, and for the use of mechanical power.
UNDP works closely with LDCs on supporting their graduation endeavours including Cape Verde, Maldives and Samoa, which already graduated from LDC status; but also Angola, Bhutan, Equatorial Guinea, Laos PDR, Myanmar, Nepal and Vanuatu, which are preparing for graduation. More concretely, we have:
- Advised on the integration of LDC graduation goals, and mainstreaming and acceleration of the SDG agenda into comprehensive national strategies;
- We support monitoring and statistical capacity to assess progress;
- We support increasing understanding of the implications of LDC graduation and consensus building, within and outside government, on needed policies both prior to and after graduation;
- We facilitate South-South exchange between LDCs;
- We assist in identifying the financing requirements associated with LDC graduation strategies to better support resource mobilization and realistic development planning.
Let me address the strategies towards graduation and the role of industrialization:
Industrialization has a critical role to play in fostering inclusive growth and development. We know that growth alone is not sufficient to promote development. The pace, pattern and length of growth, as well as the composition and structure of growth are important: without structural transformation – anchored in industrial development, economic growth does not lead to rapid reduction in poverty, sustained increase in living standards and appreciable reduction in inequality.
Moving from low productivity to high productivity sectors, such as industry, is key to achieving Agenda 2030. This depends on an economy’s ability to successfully move labour and resources into sectors or activities with high and rising level of productivity including manufacturing, ICT and finance. The ability of countries to engage in higher productivity sectors over time is an important lens for assessing future economic performance in LDCs.
Analytical studies and empirical evidence suggest that the most successful economies have experienced a strong accumulation of physical and human capital in high-productivity sectors. The acceleration of industrialization – and particularly manufacturing – is critical for enhancing productivity and sustaining technological capabilities.
It is also important to diversify the production and export base of LDCs. The most recent primary commodity price busts have further shown the importance of adding value to agricultural and mineral products. Promoting national, regional and global value chains is pivotal to achieving meaningful economic diversification. Therefore, the path towards sustainable development, and thus graduation from LDC status, calls for a set of well-designed and effective industrial policies to promote investments of capital and labour that will in turn foster industrialization in LDCs.
There are two key challenges facing LDCs in the road towards industrialization. The first challenge is how to ensure that industrialization is inclusive by creating enough decent jobs, including for women and youth. The second is how to ensure that industrialization is sustainable through the promotion of a production and technology mix with a low carbon footprint and high clean energy intensity.
To address these challenges, I would like to underline three points:
First, investing in people is critical for structural transformation and development. A healthy and productive work force, able to master and adapt to new technologies is essential for sustained growth, industrialization and international competitiveness. The countries that have made significant progress on human development and are catching up with advanced societies have devoted impressive levels of public investments to building human capabilities, particularly in health, education and nutrition. Policies responsible for expanding access to quality education, health care services and effective social protection contribute to the participation of the poor in the growth process.
In the same vein, empowering women, including by securing employment in the formal sectors and ending wage and other discriminations, will go a long way in promoting inclusiveness, including in the industrial sector.
While governments have the primary responsibility to mobilize resources for these investments, ODA will continue to be essential in the foreseeable future for the LDCs. Thus, the role of international cooperation and solidarity should not be understated. UNDP is committed to advocating the urgent need to increase the ODA-GNI ratio to LDCs from 0.15 percent to 0.2 percent.
Second, the role of the State should be revisited in light of the graduation and sustainable development aspirations of LDCs. A strong, proactive and responsible State is needed to formulate policies for the public and private sectors; provide a vision and leadership; and promote policy coherence and social cohesiveness.
Third, regional integration promises significant opportunities for the industrialization of LDCs. A rich body of research and analysis by international organizations, including UNDP, point to the significant contribution that regional integration can make in fostering industrialization and inclusive growth in LDCs. In Asia, regional trade and investment flows, both across LDCs and with regional partners, are already significant.
In Africa, regional integration has been growing and shows significant potential for scaling-up. Analysis regarding the implications of the Continental Africa Free Trade Area (CFTA) by UNECA indicates that regional trade integration will not only increase intra-Africa trade, but will also contribute to a more diversified trade profile. Whereas Africa’s trade with the rest of the world is concentrated in raw materials and primary commodities with limited linkages to the rest of the economy and muted effects on employment, trade within Africa will become more diversified in the future, including trade in manufacturing goods and services.
LDC governments can support regional integration by undertaking necessary policy reforms and investing in infrastructure for regional connectivity supported by partners, including through Aid for Trade programmes.
Finally, we believe that inclusive and sustainable industrial development (ISID) can better integrate the key priorities, goals and targets of the IPoA and ensure that it reflects LDCs financial needs and graduation endeavour.
Inclusive and sustainable industrialization is part and parcel of the 2030 Agenda for Sustainable Development through SDG 9 -Build resilient infrastructure, promote inclusive and sustainable industrialization and foster innovation. Agenda 2030 is an integrated and indivisible set of policy objectives and targets of universal application.
The IPoA outlines an ambitious framework for development of the LDCs. At UNDP, we see graduation from LDC status as a milestone in the path towards sustainable development. Naturally, there are important overlaps and synergies between the IPoA and Agenda 2030.
In order to build synergies across these agendas and more importantly, promote coherence of purpose and maximise financial and technical resources for implementation, it is critical to integrate the IPoA and Agenda 2030 into national development plans and sectoral strategies, so that the agenda for people and planet become realities, especially where people and the planet need them most.