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Margin of preferences and LDC export performance

by Matthias Bruckner * Preferential market access is a major support measure available to LDCs. By lowering or eliminating tariffs on LDC imports, preferential market access contributes to offset higher production costs LDCs have due to structural handicaps such as remoteness from major markets, landlockedness, unskilled labour force, etc. However, the value of preferential market access schemes is often questioned due to on-going liberalization and the proliferation of regional trade agreements that imply in de facto low preferential margins. However, such general conclusion does not take into account the wide range of tariff levels applied to products of export interest of LDCs....

Using the LDC criteria to allocate ODA: is it possible?

by Matthias Bruckner* Frequently, LDCs express concerns that graduation from the LDC category would lead to a sudden decline in ODA. While currently graduated countries have not experienced an ODA decline, the concerns are still real. If LDC status confers benefits, graduation implies a loss. Development progress is gradual, whereas change in status is abrupt. However, revising ODA allocation mechanisms could alleviate such concerns. The United Nations General Assembly agreed already to "invite development partners to consider [LDC indicators and criteria] as part of their criteria for allocation [ODA]".  This proposal is based on a suggestion made by the CDP, which noted that...

Exports of LDCs to drop after 2018

by Matthias Bruckner* 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...

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...

Ginger Competitiveness Project

Project Name: Ginger Competitiveness Project: Enhancing Sanitary and Phytosanitary Capacity of Nepalese Ginger Exports through Public Private Partnerships Implementing Institutions: Food and Agriculture Organization Main Donors: STDF and EIF Trust Fund Duration:  07 June 2012 – 06 June 2015 Objectives: The project envisions ‘increased income level of ginger farmers through improvements in SPS arrangements and value addition for export to India and other countries' as its general objective, and specifically ‘increased market opportunities for Nepalese ginger through a series of SPS related and value-addition interventions' as the project outcome ...

Second Private Sector Competitiveness and Economic Diversification Project

Project Name: Second Private Sector Competitiveness and Economic Diversification Project Implementing Institutions: Ministry of Trade and Industry Main Donors: World Bank Duration: October 2013 – April 2019 Objectives: The development objective of the Second Private Sector Competitiveness and Economic Diversification Project for Lesotho is to contribute to the development of selected non-textile sectors resulting in increased private sector investment, firm growth and job creation. The project will comprise two mutually-reinforcing components. The first component of the project is improving the business environment. The objective of this component is to...

Smallholder Agriculture Development Project

Project Name: Smallholder Agriculture Development Project Implementing Institutions: Ministry of Agriculture and Food Security, IFAD Main Donors: World Bank Objectives:  The objective of the Smallholder Agriculture Development Project is to increase marketed output among project beneficiaries in Lesotho's smallholder agriculture sector. There are three components to the project. The first component is increasing agricultural market opportunities. This component support Lesotho's emerging agricultural businesses to contribute to increased commercialization of the agriculture sector. The second component is increasing market oriented smallholder production. This...

Horticulture Productivity and Trade Development

            Project Name:  Horticulture Productivity and Trade Development Implementing Institutions: International Trade Center, Ministry of Trade, Ministry of Agriculture and Food Security Main Donors: EIF Trust Fund Partners:    Duration: February 2013 – December 2015 Objectives: The objective of the project is to build capacity of Lesotho cooperatives and their members to deliver the markets high value Fresh Fruit and Vegetables (FFVs), through improved commercial and competitive value/supply chains. Link: ...

One Village One Product Programme Uganda

Donors: Japan International Cooperation Agency Partner: Ministry of Trade, Industry and Cooperatives (with the Ministry of Tourism, Wildlife and Heritage) Duration:  July 2009 – June 2014 Objectives:  Promote establishment of production networks/clusters within the country. Promote value addition to local materials and products of comparative advantage at community level for social economic transformation Develop human capital and entrepreneurial capacities amongst the participating communities. Strengthen partnerships and linkages between Government, private sector and the donor community Create and strengthen market clusters for OVOP...

African Pesticide Residue Data Generation Project

Project Name: African Pesticide Residue Data Generation Project Implementing Institutions: AU-IBAR Main Donors: STDF Trust Fund - Budget: US$ 446,150 Partners: USDA, FAO, IR- 4, COLEACP, Dow Chemical Duration:   1 May 2013 - 30 April 2016 Objectives: Enhance regional capacity in pesticide residues data generation and monitoring for establishing, implementing, and complying with international pesticide residue standards. Source/Website: http://www.standardsfacility.org/en/PGProStat.htm http://www.standardsfacility.org/Files/Project_documents/Project_Grants/STDF_PG_359_Application.pdf Contact person for further inquiries: ...

ITC project on sector competitiveness and export diversification

ITC is implementing a poverty reduction project providing agri-sector specific support for cashew nuts, groundnuts and sesame. Key focus will be on finding  new export opportunities,  product diversification,  improved  value-addition,  quality enhancement and strengthened sector support institutions. The project will also provide cross-cutting assistance in the areas of trade information and inclusive tourism. Source: ITC

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...