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LANDLOCKED DEVELOPING COUNTRIES AND VIENNA PROGRAMME OF ACTION

ODBAYAR ERDENETSOGT

EXECUTIVE DIRECTOR

Expert Group Meeting on

Midterm Review of the Vienna Programme of Action for

Landlocked Developing Countries

Almaty, Kazakhstan

18-19 September 2018

CONTENT OF THE PRESENTATION

I. Priorities of the Vienna Programme of Action and Landlocked Developing Countries

II. Challenges of LLDC and VPoA

III. How to overcome challenges

IV. Role of the International Think Tank for LLDC

LANDLOCKED DEVELOPING COUNTRIES

Vienna Programme of Action for LLDC

• Priority 1: Transit Policy Issues

• Priority 2: Infrastructure Development & Maintenance

• Priority 3: International Trade and Trade Facilitation

• Priority 4: Regional Integration and Cooperation

• Priority 5: Structural Economic Transformation

• Priority 6: Means of Implementation

PRIORITY 1: TRANSIT POLICY ISSUES

Logistic Performance Index Ranking - 2018 Doing Business 2017: Trading Across Borders Ranking

7182

9299

108114

126 130 134

149160

0

20

40

60

80

100

120

140

160

180

26

52

7683 84

110

123 124

149

168175

0

20

40

60

80

100

120

140

160

180

200

Source: World bank

PRIORITY 1: TRANSIT POLICY ISSUES

Doing Business 2017: Trading Across Borders Rank

Time to export: Border compliance (hours) Time to import: Border compliance (hours)

5

12

20

29

39

48

5662

75

112

133

0

20

40

60

80

100

120

140

25

14

30

41

48

61

72

96

107111

0

20

40

60

80

100

120

Source: World bank

PRIORITY 2: INFRASTRUCTURE DEVELOPMENT

AND MAINTENANCE

Logistic Performance Index Ranking - 2018

Quality of trade and transport related infrastructure Custom ranking: Efficiency of the clearance process

77 8186

91

103

117123 127

135

150158

0

20

40

60

80

100

120

140

160

180

5565

7481

111

122127

135140

150158

0

20

40

60

80

100

120

140

160

180

Source: World bank

PRIORITY 2: INFRASTRUCTURE DEVELOPMENT &

MAINTENANCE

Internet users (% of population) Mobile cellular subscriptions per 100 inhabitants

0.1 0.4 0.4 0.1 0.3 03.9 2.4 1.9

4.62

0

10.6

18 19.7 20.5 21.9 22.3

34.5

41.8

46.8

62

76.8 78.2

0

10

20

30

40

50

60

70

80

90

2003 2016

2 0.9 1.3 0.4

12.6

0.7 0.3

12.93.8 2.8

90.2

55.4

66

77.3

88.8

106.3 106.7111.7 113.6 114.8

131.4

150157.7

0

20

40

60

80

100

120

140

160

180

2003 2016

Source: ITU

PRIORITY 3: INTERNATIONAL TRADE

AND TRADE FACILITATION

Doing Business 2017: Trading Across Borders Rank

Cost to export: Border compliance (USD) Cost to import: Border compliance (USD)

59 73100

191214

278 288313

445 453

574

0

100

200

300

400

500

600

700

0

100 110153

190210 223

278300

512

750

0

100

200

300

400

500

600

700

800

Source: World bank

PRIORITY 4: REGIONAL INTEGRATION AND

COOPERATION

Bhutan Afghanistan Nepal Tajikistan Kyrgyzstan ArmeniaLao People's

Dem. Rep.Mongolia Uzbekistan Azerbaijan Turkmenistan Kazakhstan

1995 103 166 345 750 409 271 311 473 3,430 635 1,880 5,250

2016 470 520 740 900 1,545 1,783 3,020 4,917 10,000 10,900 11,000 36,776

0

5000

10000

15000

20000

25000

30000

35000

40000

Ax

is T

itle

Total Exports (US$ millions)

Total, LLDCs 28,279 139,925

Total, Transit countries 455,198 3,606,350

World 5,176,236 15,956,403 Source: UNCTADstat


COOPERATION

Intra-Regional trade (2015 %) Competitive Industrial Performance Index Ranking 2016

29.9

38.9

62.564.9 66.3

73.8

84 84.988.5

91.994.3

96.8

0

20

40

60

80

100

120

69

99 101 102107

121

131 133

144

0

20

40

60

80

100

120

140

160

Source: ITU Source: UNIDO


COOPERATION

Bhutan Tajikistan Armenia Mongolia Kyrgyzstan Lao PDR Turkmenistan Afghanistan Azerbaijan Nepal Uzbekistan Kazakhstan

1995 112 810 674 415 522 589 1,365 387 668 1,333 2,750 3,807

2016 1,030 3,100 3,293 3,358 3,919 4,720 7,000 9,150 9,200 9,650 11,500 25,175

0

5000

10000

15000

20000

25000

30000

Ax

is T

itle

Total Imports (US$ millions)

Total, LLDCs 33,216 178,101

Total, Transit countries 485,318 3,255,944

World 5,234,375 16,141,460

Source: UNCTADstat

PRIORITY 5: STRUCTURAL ECONOMIC

TRANSFORMATION

Afghanistan Bhutan Nepal Tajikistan Kyrgyzstan Armenia Lao PDR Mongolia Uzbekistan Azerbaijan Turkmenistan Kazakhstan

1990-2002 0.004 0.002 0.009 0.01 0.008 0.004 0.005 0.009 0.053 0.02 0.028 0.1

2016 0.003 0.003 0.005 0.006 0.01 0.011 0.019 0.031 0.063 0.068 0.069 0.23

0

0.05

0.1

0.15

0.2

0.25

Ax

is T

itle

Share of Exports in Global Trade (%)

Source: UNCTADstat2016

Total, LLDCs 0.877

Total, Transit countries 22.601


TRANSFORMATION

Bhutan Tajikistan Armenia Mongolia Kyrgyzstan Lao PDR Turkmenistan Afghanistan Azerbaijan Nepal Uzbekistan Kazakhstan

1990-2002 0.003 0.01 0.012 0.01 0.009 0.009 0.022 0.017 0.017 0.024 0.051 0.074

2016 0.006 0.019 0.02 0.021 0.024 0.029 0.043 0.057 0.057 0.06 0.071 0.156

0

0.02

0.04

0.06

0.08

0.1

0.12

0.14

0.16

0.18

Ax

is T

itle

Share of Imports in Global Trade (%)

Source: UNCTADstat


TRANSFORMATION

World Nepal Bhutan Lao PDRKyrgyz

RepublicArmenia Kazakhstan Tajikistan Uzbekistan Afghanistan Turkmenistan Azerbaijan Mongolia

2003-2013 29.5 30.8 44.6 73.6 62.6 66.5 87.3 85.1 64.8 70.7 90.7 94.9 89.1

2016 26.1 29.3 36.1 49.8 66.3 81.2 82.4 83.2 85.5 89.3 91.7 95.5 97.4

0

20

40

60

80

100

120

Ax

is T

itle

Share of primary commodities in exports (%)

Source: UN-OHRLLS


TRANSFORMATION

Mongolia Azerbaijan Afghanistan Turkmenistan Uzbekistan Tajikistan Kazakhstan ArmeniaKyrgyz

RepublicLao PDR Bhutan Nepal

2003-2013 10.7 4.7 15.9 7.9 29.4 12.9 12.7 32.5 31.6 25.7 54.8 68.8

2016 2.6 4.5 5.8 8.3 14.5 16.6 17.6 18.6 28.1 50.1 63.4 70.6

0

10

20

30

40

50

60

70

80

Ax

is T

itle

Share of manufactured goods in exports (%)

Source: UN-OHRLLS


TRANSFORMATION

Trade Concentration Index 2016 Trade Diversification index 2016

0.15

0.2

0.27

0.32 0.320.35

0.37 0.380.4

0.51

0.680.72

0

0.1

0.2

0.3

0.4

0.5

0.6

0.7

0.8

0.64

0.720.74 0.74

0.78 0.78 0.79 0.80.82 0.83 0.84 0.85

0

0.1

0.2

0.3

0.4

0.5

0.6

0.7

0.8

0.9

Source: UNCTADstat (World Concentration – 0.062, Developed economies – 0.103; World diversification – 0.000, Developed economies – 0.334)


TRANSFORMATION

Foreign Direct Investment 2017, mil. USD Official Development Assistance 2017, mil. USD

10 54 94 96 141 198 246

813

1494

2314

2867

4634

0

500

1000

1500

2000

2500

3000

3500

4000

4500

5000

32.9 51.4 60.9 77.5

325.5 326.7 333.7 398.2 457.3 515.2

1065.9

4064.3

0

500

1000

1500

2000

2500

3000

3500

4000

4500

Source: UNCTADstat Source: World bank data

SDG AND VPOA

• Priority 1: Transit Policy Issues• Priority 2: Infrastructure Development &

Maintenance• Priority 3: International trade and trade

facilitation• Priority 4: Regional Integration and

Cooperation• Priority 5: Structural Economic Transformation

• Priority 2: Infrastructure Development &

Maintenance

• Priority 3: International Trade

• Priority 5: Structural Economic

Transformation


• Priority 5: Structural Economic Transformation

• Priority 3: International Trade

• Priority 4: Regional Integration and

Cooperation


Transformation



Maintenance

• Priority 3: International trade and trade

facilitation

• Priority 4: Regional Integration and

Cooperation


Transformation

SDG AND VPOA

• Priority 5: Structural economic transformation

• Priority 1: Fundamental transit policy

issues


facilitation

• Priority 4: Regional integration and

cooperation

• Priority 5: Structural economic

transformation

• Priority 5: Structural economic transformation

• Priority 2: Infrastructure development and

maintenance


facilitation

• Priority 5: Structural economic

transformation


• Priority 1: Transit Policy Issues


Maintenance


facilitation

INDICATORS OF SDG AND VPOA

• GDP (constant 2005 US$)

• GDP growth (annual %)

• GDP per capita, PPP (constant 2011 international $)

• Proportion of population below $1.25 (PPP) per day

• Human Development Index

• Employment-to-population ratio

• Share of women in wage employment in the non-agric sector

• Share of LLDCs’ exports in global trade

• Trade within the region as share of total trade

• Net ODA received (% of GNI)

• Inward foreign direct investment flows (current US$)

• Aid for trade disbursements (constant US$)

• Proportion of land area covered by forest %

• Annual change in degraded or desertified arable land (% or ha)

CHALLENGES OF LLDC

SUSTAINABLE DEVELOPMENT GOALS AND

VIENNA PROGRAMME OF ACTION

CHALLENGES OF LLDC

Institutional obstacles:

• Political instability,

• Ineffectiveness of national and subnational institutions in sectors and poor correlation, coordination

and implementation,

• No coordination of policy making and alignment of policy documents and development plans,

• Weak capacity of government officials (decision makers and practitioners) in terms of policy making,

negotiation and research,

• Lack of legal mechanism,

• Insufficient human capital development,

• Job insecurities and inequalities,

• Lingering conflicts,

• Lack of sufficient monitoring and evaluation of policy coherence,

• No awareness of national plans, SDG and VPoA

CHALLENGES OF LLDC

Economic and environmental obstacles:• Dependent on a small number of primary products,

• Poor trade and investment competitiveness,

• Low regional integration,

• Energy insecurity and inefficient use,

• Poor infrastructure connectivity,

• Weak technology and innovation,

• Economic shocks,

• insufficient natural resource management,

• Climate change risks (environmental degradation, desertification, climate-related disasters

and declining crop yields etc.),

HOW TO OVERCOME CHALLENGES� Good governance:

o Ensure efficient collaboration between government bodies,

o Establish mechanism to implement VPoA (National Committee),

o Harmonize and align national development plans and policy documents with international development goals (Mongolia:

National Workshop on the mainstreaming of the Vienna Programme of Action in 2016),

o Promote capacity building activities of policy makers and practitioners (ITT Research: Handbook for negotiators of LLDC),

o Enhance legal basis for development planning,

o Map the Law on Development Policy Planning,

o Development of tools, guidelines and structures to ensure alignment of sectoral policies with national policy documents,

SDG and VPoA,

o Set clear targets, indicators of monitoring and assessing,

� Recourse mobilization: utilize domestic resource and international assistance efficiently (FDI, ODA and Aid4Trade etc.) for

hard and soft infrastructure (ITT Research: FDI, economic diversification and regional trade network connectivity: the case of

Laos),

� South-South cooperation: share knowledge and information on the best practices (ITT Research: Comparative analysis in

medical services indicators and surgical care delivery between Lao PDR and Mongolia),

� Safe environment: promote climate change solutions, environment protection and disaster-resilience

HOW TO OVERCOME CHALLENGES

• Structural transformation: increase economic and export diversification (ITT Research: Economic Diversification of LLDCs),

• Private sector involvement: unleash the full potential and creativity of the private sector and liberalization of some sector

(transport), support SME (ITT Research: Modeling the Potential for Aviation Liberalization in Central Asia),

• Infrastructure for transport and technology: hard infrastructure and Information and Communication Technology

development (ITT Research: The Azerbaijan model of technology leapfrogging)

• Trade Facilitation (ITT Research: Assessment of the WTO Agreement on Trade Facilitation: Implications for the LLDCs):

o Establish national mechanisms (National Trade Facilitation committee),

o Reform and modernize customs and border agencies, customs clearance regulations, capacities and facilities,

o Integrate customs and border procedures with transit countries,

o Transit transport regulations

• Regional integration: intensify their regional collaboration (ITT Research: Rethinking Regional Integration for Landlocked

Developing Countries),

THE ROLE OF THE INTERNATIONAL

THINK TANK FOR LLDC

Importance of research and

evidence based analysis

� Definition of right policy

� Define problems and find solutions

� High quality research = Good solution and advocacy

� Capacity building activities: workshops and seminars

� Define high quality tools for research, and share (e.g. IDE-GSM-geographical

simulation model)

� Cost and Benefit analysis

� Evidence based problem solving vs. populist approach

PRODUCTS OF ITTLLDC

SECRETARIAT OF THE ITTLLDC

THE OFFICE PREMISES OF THE ITTLLDC

Potential Cooperation

Cooperation under the Vienna Programme of Action:

• Development partners (developed countries and friends of LLDCs)• International organizations (UN, system institutions, WTO, ITC etc.) and regional organizations (UN-ESCAP, ADB, CAREC)

• Other research institutes (ADBI, ARTNeT, ERINA, JETRO-IDE, CESD, SME)• Universities (University of Sydney, Wollongong, Hong Kong)

Cooperation modality:

• Joint research• Cost sharing for organizing event, seminar, workshop, lectures

THANK YOU FOR YOUR ATTENTION

UN HouseUnited Nations’ Street-14Ulaanbaatar 14201

Mongolia

Tel: +976 11 [email protected]

www.land-locked.orgwww.facebook.com/ITTLLDC

twitter.com/ITTLLDC

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