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Exports of LDCs to drop after 2018

Better integrating LDCs into world markets is a long standing objective of the international community. One of 19 targets associated with SDG 17 " Strengthen the means of implementation and revitalize the global partnership for sustainable development" ( target 17.11) , actually calls for doubling the LDC share of global exports by 2020. But taken at face value, this target is most likely to be missed even before it is going to be adopted in September this year. Source: Own calculations, based on IMF World Economic Outlook. For the composition of the LDC category, see http://esango.un.org/sp/ldc_mem/web/StatPlanet.html . Growth of the share of LDCs in World exports of goods...

US GSP is renewed to 2017

On 25 June 2015, US Congress passed the Trade Preferences Extension Act, and subsequently on 29 June 2015, President Obama signed it into law. Trade Preferences Extension Act includes the extension of the GSP program to 31 December, 2017 ( section 201(a) ). The GSP program, instituted by the Trade Act of 1974, is designed to promote economic growth in the developing world by providing preferential duty-free entry into the US market for nearly 5,000 products from 122 designated beneficiary countries and territories, including 44 LDC beneficiary countries. An additional 1,400 products are GSP-eligible only when imported from LDCs. Congressional authorization for the program...

New EIF launched at Global Aid for Trade Review

The new Enhanced Integrated Framework ( EIF ) launched on 1 July 2015 at the Global Aid for Trade Review at the WTO in Geneva.  The updated EIF, the only global Aid-for-Trade programme which focuses exclusively on LDCs, has been revised to further strengthen efficiency and effectiveness. For the first time the EIF can fund regional, rather than only national projects. A second phase of the EIF has been approved from 2016 to 2022. The launch of the revised EIF follows an extensive review the EIF partnership completed in December 2014. Overall the review found that significant gains have been made and that the EIF remains a valuable tool for supporting trade in LDCs as well as...

LDCs are making progress towards the Istanbul targets

The Istanbul Programme of Action for the Least Developed Countries for the Decade 2011-2020 has as objective to enable half of the number of LDCs to meet the criteria for graduation from the category by 2020. The United Nations Committee for Development Policy (CDP) is the entity that assesses whether an LDC meets the criteria for graduation or not. This assessment takes place every three years at the triennial review of the LDC category conducted by the Committee. The latest triennial review of the LDC category took place during the plenary session of the CDP in March 2015. Ten countries met the criteria for graduation (see table) as follows: - Three countries had already been...

When should concessional loans be reported as ODA?

Members of the Development Assistance Committee of the Organization for Economic Cooperation and Development (DAC-OECD) met in Paris on 15-16 December 2014.  The main objectives of the meeting were to agree on how the measurement of official development assistance (ODA) could be revised to ensure greater transparency and comparability of data as well as to make the concept of ODA better adjusted and fit to today's global context and the needs of the upcoming United Nations sustainable development agenda.  In particular, members agreed to revise how concessional loans should be reported as ODA. Under the current system, concessional loans are reported as ODA only if they meet...

Targeting ODA towards LDCs: larger flows or smaller commitments?

The donor community has been increasingly interested in addressing shortcomings in the access to concessional development finance that LDCs are granted. Accordingly, the Secretariat of OECD/DAC has been asked to explore additional targets and incentives that would direct ODA towards this group of countries. One recent proposal is centered on the idea of having an LDC target determined by  a given share of OECD/DAC members' volume of ODA flows to developing countries. Currently, ODA targets to LDCs are based on a share of the donors' GNI. As specified in the Istanbul Plan of Action adopted at the IV UN Conference on the LDCs in May 2011, donors are to provide 0.15 to 0.20 per cent...

SPOTLIGHT summary: How long should the smooth transition period last?

In response to the lack of guidelines to support the transition of countries from the LDC category, a UN General Assembly resolution established a smooth transition framework in 2004 . The 2004 resolution does not contain any mandatory provisions. Instead, it invites partners to extend smooth transition measures to graduated countries. Since the adoption of the resolution, no phasing out mechanisms were introduced for most ISMs. A few exceptions exist. Notable examples are those from the EU related to LDC specific trade preferences under the Everything but Arms  initiative and continued access for a limited period to funding from the Enhanced Integrated Framework . In...

ODA flows to LDCs in 2012: bilateral ODA declined significantly but how about multilateral development aid?

by Hiroshi Kawamura (*) Many in the donor community have expressed concern over the news from the OECD DAC that bilateral development aid fell by 4 per cent in real terms in 2012 and to LDCs by 12.8 per cent.  With this, OECD noted that there is an apparent shift in aid allocation away from the poorest countries and towards middle-income countries.  What was not widely reported is the fact that bilateral contributions to multilateral institutions declined by 7.1 per cent in real terms in 2012.  A lower bilateral contribution to multilateral institutions could aggravate the negative impact of the declining bilateral ODA on LDCs by further reducing multilateral ODA to...

Many scholarships, few applications

By Namsuk Kim (*) There are a growing number of  financial support measures  available (in many cases, exclusively) to students and researchers from LDCs. Types of support are diverse, including support for getting enrolled in graduate degree programs, for participating in academic conferences, and for conducting research projects. Fields of specialization are also diverse, covering agriculture, business, economics, engineering, and information technology, among others. Notwithstanding the diversity of programs and providers, a common problem confronts them all: too few LDC applicants. As a result, scholarship providers have loosened the eligibility criteria and started...

Assessing the accession: highlights of Lao’s package

  On 2 February 2013, Lao People's Democratic Republic became the latest LDC to join the WTO. Negotiations lasted for 15 years and required Laos to make substantial changes in its legal and regulatory framework as well as to introduce new legislation. The working party on the country's accession involved 66 members of the WTO.  During the negotiations, Laos received technical assistance by the WTO, other multilateral organizations and development partners. The terms of accession package were agreed by late September 2012 and approved by the General Council of the WTO in October 2012. This implies that several of the recommendations adopted in July 2012 to further strengthen,...

LDCs to keep DFQF benefits in Canada

The Canadian Government announced major changes to its General Preferential Tariff, its GSP scheme for all developing countries. Seventy-two countries, including major trading nations such as Brazil, China, India and the Republic of Korea will be excluded from the scheme from 1 January 2015. These are countries that have either achieved upper middle or high income status according to the World Bank classification  for two consecutive years or have a share in world exports of higher than 1 per cent. Among the current LDCs, Equatorial Guinea will be excluded from preferential access in Canada due to its high income status. The country had been recommended by the CDP for graduation...

LDCs and trade in services

LDCs continue to play a marginal role in global trade in services flows, but their market share is increasing. In 2011, the LDC market share in commercial services stood at 1.05 %, only slightly below their share in merchandise trade of 1.14 %. However, whereas the trade balance of LDCs as a group in merchandise trade is approximately zero and even had a small surplus in 2011, LDCs are net importer of services. Services exports stood at 22 billion $ in 2011, whereas imports were 62 billion $. Moreover, imports are growing faster (15.2 per year between 2000 and 2011) than exports (12.9 per cent per year). Hence, services exports play only a small role for LDCs external financing, with only...

Smoothing the Transition

On 7 December 2012, the General Assembly of the United Nations adopted a resolution on smooth transition for countries graduating from the list of LDCs . The resolution endorses several of the recommendations put forward by the ad hoc working group of the General Assembly on strengthening smooth transition provisions. The working group initiative had been mandated by the Fourth UN Conference on the LDCs which took place in Istanbul in May 2011. Graduation has been a source of concern for many LDCs. Despite the introduction of smooth transition provisions by some development  (for example, UN General Assembly travel benefits) and trading partners (the EBA is a case in point),...

Spotlight summary: EIF success stories - lessons learned

In October and November 2012, Spotlight discussions on the Portal focused on how positive experiences can be replicated by LDCs. The discussions highlight some of the successes and lessons learned from EIF activities in LDCs such as the Gambia, Lesotho, Mali, Nepal and Uganda. One message coming out of the discussions is that the implementation of the integrated framework is facilitated by the national units responsible for implementation. However, a number of respondents reported that there is a need to further develop the capacity of Government officials in formulating EIF projects. Several contributors stressed that the capacity to initiate and sustain trade-related...

Untying aid for LDCs: Trends and implication

Between 2000 and 2010, the proportion of untied OECD DAC bilateral aid to LDCs has increased from 57.5 per cent to 84.4 per cent. Despite the progress achieved, at least 30% of the aid disbursed to LDCs and other programme countries is estimated as tied (and reporting is far from complete), when the exempt technical cooperation and food aid are included. Furthermore, donors can in practice tie their programme and project aid informally for various reasons such as lack of capacity of local and regional contractors, which is particularly an important factor in LDCs. Traditionally, many donor countries have seen aid as an opportunity to promote their own commercial interests, by...

UN Budget Scale Assessment Methodology

Under the current scale of assessment, contributions by LDCs to the regular budget of the UN are capped at 0.01 per cent of the total budget, while every Member State is required to pay at least a minimum assessment rate of 0.001 per cent.  At present, the scale of assessment is based on the following considerations: total GNI in national currency; market exchange rates are used, except in cases where that would cause excessive fluctuations and distortions in the income level –when expressed in US dollars-- of  Member States; averages are  applied (periods of 3 or 6 years) to in GNI, GNI per capita and other variables used  to avoid abrupt changes in the...

Bangladesh' exports to Canada: the importance of flexible rules of origin*

The Canadian GSP scheme for the LDCs was revised in 2002 when almost all tradable items were made eligible for duty-free (and quota-free) treatment. Four excluded items were eggs, poultry, dairy and refined sugar, none of which is exported by Bangladesh. Most of Bangladesh's exports to Canada (89.3 per cent in FY2010) are ready made garments (RMG). Average Canadian tariffs on apparels items are about 17 per cent and several apparels items face tariff peaks. However, the average MFN duty in Canada was much lower at about 3.2 per cent. The Canadian GSP rules of origin (RoO) are considered to be the most LDC-friendly of all, requiring only 25 per cent domestic value addition. Bangladesh...

LDCF Background and Experience

The LDCF was proposed at the 7th session of the Conference of the Parties to the UNFCCC in Marrakesh, in 2001. The GEF, as a financial mechanism of the Convention, was requested to operate the fund. In 2002 the GEF reported that arrangements had been made for the establishment of the fund. Objective The fund addresses the needs of the 48 LDCs which are particularly vulnerable to the adverse impacts of climate change. As a priority, the LDCF supports the preparation and the implementation of the National Adaptation Programs of Action (NAPAs), which are country-driven strategies that identify the immediate needs of LDCs in order to adapt to climate change. Preparation of NAPAs ...

EIF and its Tiers

All  LDCs that became beneficiaries of the Integrated Framework (IF), prior to the IF enhancement, automatically became beneficiaries of the Enhanced IF (EIF). New LDC entrants need to be qualified as  EIF beneficiaries. Two main financing mechanisms are envisaged: Tier 1 aims at supporting greater trade capacity and increased policy ownership. It provides financial resources with the following objectives: Building the human resource capacity of and providing operational support for the National Implementation Arrangements (NIAs). The NIAs often comprise the national focal point, the national implementation unit , the national steering committee and the donor...

Standards and Trade Development Facility

The STDF is a global partnership that supports LDCs Least Developed Countr and other developing countries in building their capacity to implement international sanitary and phytosanitary standards (SPS Sanitary & Phytosanitary ) to gain and maintain access to markets. The STDF ds and Trade Development Facility contributes to this by helping countries build up their capacity to implement requirements known as "sanitary and phytosanitary (SPS)" standards through increased awareness and knowledge of good practices and by funding projects that promote compliance with the standards, including grants to help prepare projects. The objective is to assist countries tackle pests,...