South and South-West Asia LLDCs

Transcription

1 International support measures to South and South-West Asia LLDCs Nagesh Kumar Director, ESCAP South and South West Asia Office And ESCAP Chief Economist ESCAP/OHRLLS/ECE/Government / / of Lao PDR Final Regional Review of the Almaty Programme of Action 5 7 March 2013 Vientiane, Lao PDR

2 Outline SSWA LLDCs (viz. Afghanistan, Bhutan, and Nepal) are also LDCs indicating how their landlocked status holds back their economic development Development challenges Connectivity and transit related constraints Infrastructure gaps Poorproductive capacities Poor levels of human development Smallbase ofinvestible resources International support measures Official i development assistance it South South Cooperation Connectivity it and transit itfacilitation ti Market Access 2

3 Connectivity ii and Transit related dhandicaps Higher cost of exporting a container compared to other countries. Cost of exporting increased much faster for LLDCs compared to other countries Number of days to export constant or falling in BTN, NPL, increasing in AFG Afghanistan Cost of exporting a Days taken container in Year to export US$ Bhutan Nepal Source: ESCAP SSWA Development Report,

4 Afghanistan Nepal Bangladesh Bhutan Pakistan India Sri Lanka Iran, Islamic Rep. China Turkey Maldives Australia Japan New Zealand Korea, Rep. Singapore Germany Hong Kong (China) United States United Kingdom Wide infrastructure gaps Infrastructure Index, South and South West Asia and selected countries, Infrastructure Index value Source: ESCAP SSWA Development Report,

5 Below global average Losing ground as other countries diversify faster High dependence on exports of few commodities and exports doesn t allow them to take advantage of trade preferences and market access offered Poor productive capacities Standard deviations away from average Asia-Pacific productive capacity Source: ESCAP SSWA Development Report,

6 Rank HDI score Poor levels of human (Regional / development Global) Low health and education outcomes Lagging behind on MDGs South Asia Afghanistan 9 / Bhutan 5 / Nepal 8 / Low savings rates and Gross FDI Inflows Domestic (as % of FDI Savings (% GDP) 2001 Small base of investible resources Low levels of capital formation of GDP) Afghanistan Bhutan Nepal Source: ESCAP SSWA Development Report,

7 Non discriminatory i i market access Nepal became a WTO member in 2004 after 14 years of negotiations Bhutan and Afghanistan are currently in process Second Working Party was established in June 2012 for WTO accession of Afghanistan Signaling that negotiations had entered an active phase Long and arduous process capacity building support needed for different phases of negotiations Need to learn from previous accessions

8 International support measures Official development assistance South South Cooperation Connectivity and transit facilitation Market Access and aid for trade

9 Official Development Assistance (all donors reporting to DAC) Afghanistan single largest recipient in the world (nearly 7 billion USD annually) Current USD millions Some of the largest planned increases in Net ODA Afghanistan core aid worldwide will Bhutan be made in SSWA also Nepal including by more than Gross 16% in Nepal between ODA Afghanistan Bhutan Nepal Aid dependency (ODA as % of GNI) declined from 14.6% to 9% in Bhutan, and from 7.38% to 4.7% 47%in Nepal. Source: OECD 9

10 South South Cooperation India and Turkey emerge a key sources of South South support each accounting for over US$ 1 billion pa p.a. Increasing rapidly (e.g. 1.4 billion projected from India for based on last week s budget) More cost effective, long tradition of technical cooperation Focused on LLDCs bulk of India s economic assistance is directed to South Asian LLDCs; 9% of Turkey s also to Afghanistan India, Turkey, 2011 Source: ESCAP SSWA Development Report,

11 Transit facilitation and connectivity Indiaprovides access to Nepal and Bhutan Pakistan provides transit to Afghanistan; additional possibilities through IslamicRepublic of Iran Demonstration runs of container block train services linking Bangladesh India Nepal Importance of strengthening trade facilitation at the border crossings and move towards single window Need to conclude SAARC motor vehicles agreement and railways agreement Importance of integration transport corridors of ECO SAARC BIMSTEC to exploit network externalities more fully Source: ESCAP SSWA Development Report,

12 Market Access Benefits of many GSP schemes are limited owing to stringent rules of origin, small preference margins and high competition among the beneficiary countries Moretransparent and simplified rules oforigin origin, allowing for cumulation of origin, at least at the regional level, could improve the use and value of preferences, as would more comprehensive product coverage. South Asian LLDCs lack AGoA type of preferences Duty free quota free market access need to be provided to them as agreed at Hong Kong WTO MC5 Europe extended EBA; similarinitiati initiatives by Australia, Canada, Iceland, Norway, Switzerland and Turkey India s duty free preference scheme covering 94% of tariff lines and 92.5% of India s imports by 2013; Elimination of sensitive list under SAFTA from 480 lines to just 25 for LDCs Priority attention need to be given to LDCs in allocation of AfT for building productive and trade capacities 12

13 Concluding remarks Globalpartnership can play a supportive role in inclusive and sustainable development of LLDCs by providing resources, market access, capacity building and transit facilities Development cooperation in South and South West Asia is strengthening the type and size of resources from traditional aswell as emerging sources directed towards region s LLDCs South Asian LLDCs must leverage international resources, market access, and other assistance and regional economic integration for building their productive capacities in goods and services Move towards regional transit agreements and extended transport corridors for fuller exploitation of externalities

14 Read more in the ESCAP s SSWA Development Report Thank you! 14