Brainstorming Meeting on the Substantive Preparation for LDC IV MOBILIZING INTERNATIONAL SUPPORT FOR LDCs New York, 15 July 2010 Rob Vos Director Development Policy and Analysis Division UN-DESA

Existing international support measures for LDCs A. Official Development Assistance: Financial flows and technical assistance Bilateral and multilateral donors Special targets under MDG 8 ( % of DAC member GNI) B. International trade: Special and Differential Treatment in WTO obligations Market Access C. Other forms of support: Caps in contribution to UN budget, discounts in contributions to PKO Travel funds Other Since 1981, support by development partners framed by the Programmes of Action for LDCs

Current status of international support Official Development Assistance Aid targets have not been met GAP: $23-43 billion (0.06 – 0.11% of donor GNI) Aid remains highly fragmented and volatile (though improvements in some cases) Enhanced Integrated Framework Trust Fund reached $100 million in 2008 Aid for Trade to record level, but top 20 recipients in 2008 included just three LDCs Aid for Trade SDT for LDCs in the WTO Provisions Not well utilized due to lack of understanding and effectiveness Not all LDCs have access (32 LDC WTO Members) Accession negotiations remain complex and lengthy Market Access No full DFQF Actual market opening had little effect on increasing LDC market shares and export diversification since 2004 export diversification LDCs face the challenge of preference erosion Restrictive Rules of Origin and other non-tariff barriers

Limited results from international support Goals too ambitious in relation to support measures… …or, support measures inadequate to meet ambitious goals Difficulties in strategy implementation owing to inadequate external support, misguided domestic policies, poor governance, and random shocks. Programs of Action overemphasized international measures whose impact on growth, poverty alleviation and graduation has not been convincingly demonstrated. International support measures necessary but not sufficient to address the structural handicaps affecting LDCs: many important (domestic and international) obstacles to development were neglected.

Strengthening existing international support ODA Reiterate target of 0.15 per cent of GNI for LDCs, but …. … align more fully behind national development strategies to better fit country needs (see WESS 2010) …. provide ODA mostly in form of budget support (covering gaps in financing the NDS) to reduce transaction costs and reduce fragmentation of aid … provide ODA through multi-annual agreements aligned with medium-term expenditure frameworks to enhance predictability of aid flows Recognition of non-traditional donors in the new aid architecture Define clearly additionality of new financing needs (for climate change, food security, disaster relief).

Strengthening existing international support TRADE Aid for Trade and IF Increased funding needed to respond to country-based formulations of trade-related needs and priorities (as part of NDSs) EIF is a promising initiative and should be expanded SDT WTO agreements SDT provisions should be simplified, meaningful and more effective (i.e. better tailored to country needs) Accession of LDCs should be further facilitated. Market Access Accelerate progress towards full implementation of DFQF Creation of more simplified and harmonized rules of origin Removal of non-tariff barriers Increasing South-South collaboration

More tailor-made approach needed Need to articulate tailor-made national and international responses for each LDC: Alignment behind NDSs Principles for allocation and SDT could be set in function of types of key vulnerabilities (CDP clustering idea): LDCs with low land productivity LDCs vulnerable to environmental & economic shocks LDCs involved in, or exiting from, a conflict Better framework for smooth transition strategies needed for graduating countries EBA extensions one of few elements available Increase the knowledge on available support measures DESA - Development account project

Additional international support and considerations Enhancing policy coherence across international development strategies and related support measures: MDG strategies and PRSPs Climate change adaptation and mitigation (financing, technology transfer) Food security More realistic alignment of new BPoA targets and the international support measures that are made available Debt relief: continued heavy debt burden of some LDCs requires action from creditors Extending HIPC initiative Deliver more ODA as pure grants Include support measures from large developing country partners and NGOs

Annex

Aid for Trade increased to record level of $42 billion Back

Large gap remains in providing duty free access Back

Enhanced market access has not led to greater export diversification (Concentration index: 1 = extremely concentrated) Back

x Use of survey results - Information portal fact sheets Back