LEAST DEVELOPED COUNTRIES, LANDLOCKED DEVELOPING COUNTRIES

AND SMALL STATES IN THE GLOBAL ECONOMIC SYSTEM

T.N. SrinivasanSamuel C. Park Jr. Professor of Economics

Yale University, New Haven, CT USA

Prepared for the Conference on Global Partnership for Development organised by CUTS and FICCI in association with the Department of Commerce, Government of India, the Commonwealth Secretariat and

the India Office of the World Bank

New Delhi, India -- August 12-13, 2008

1. Introduction2. Trade, Growth and Poverty Reduction3. Salient Characteristics of Least

Developed Countries4. Cooperation Between the Developed and

Developing Countries5. Doha Round of Multilateral Trade

Negotiations6. Making Global Partnership for

Development More Effective: Some Recommendations

1. INTRODUCTION

• Wide recognition of the Development Challenge in Least-Developed Countries (LDCs), Small Island States (SIDs), and Small Vulnerable States (SVS)

• Establishment of the UNORHLLS by the UN General Assembly in 2001• Enormous diversity among countries in each group (Tables 1.1–1.5)• International Meetings and Declarations• Recognition of the needs of LDCs and Small Economies in the Doha

Declaration• Consensus on the broad objective of assisting them in achieving greater

and more effective participation in the global economic system, particularly of trade in goods, services, finance and technology

• Consensus on the goal does not necessarily imply either a consensus on the constraints on reaching the goal or on the means for easing the constraints

• Constraints largely domestic and of political economy

2. TRADE, GROWTH AND POVERTY REDUCTION• Increasing integration of developing countries in the global

economic system through the process of globalization• Waves of globalization• Direct and Indirect Effects of Globalization on poverty

reduction• Linkages in economic theory:

• Globalization and Growth• Growth and Poverty• Growth and Inequality• Other Links – Factor markets, prices, insurance• Domestic and foreign distortions

• Globalization and Poverty Reduction – Empirical Evidence• Cross-countries studies• Country case studies• Institutions

• Globalization for the poor

3. SALIENT CHARACTERISTICS OF LEAST-DEVELOPED COUNTRIES

• Criteria for grouping • Implications of the criteria• Theory of comparative advantage

and small and vulnerable states

4. COOPERATION BETWEEN DEVELOPED AND DEVELOPING COUNTRIES TO STRENGTHEN THE LINKS BETWEEN TRADE, GROWTH AND POVERTY REDUCTION

• Temporal and spatial heterogeneity of the links and their strength

• Growing doubts on the benefits of globalization in developed countries

• Historical ambivalence of developing countries towards trade openness and multilateral trade agreements

• Developing countries in the WTO• Accelerating and sustaining growth in LDCs and

small economies• The voice of LDCs in international organizations and

negotiations

5. PROGRAMMES OF ACTION FOR THE LDCs

• Integrated framework• Programmes of Action of

UNCTAD• Aid-for-Trade

6. DOHA ROUND

• A Development Round?• Collapse of the informal meeting

of the WTO Ministerial, July 28, 2008

• Is there a way forward?

7. MAKING GLOBAL PARTNERSHIP FOR DEVELOPMENT MORE EFFECTIVE: SOME RECOMMENDATIONS

• Is there, and can there possibly be, a global partnership for development?

• A realistic approach focused on specific issues and a coalition of interested parties on the issues

• Reforms:• A smaller World Bank catering only to needs of developing

countries not having access to world capital flows• An IMF with a focus only on global financial systems

stability and coordinating macroeconomic policies• Reform of the governance of both the Bank and the Fund• Reform of the WTO:

• Capacity Building• Dispute Settlement• Role-Making• Keeping non-trade-related issues out• Resisting Preferential Trade Agreement• Fairness of the Global Trading System

Table 1.2: Least-Developed Countries

Country ValuePopulation(2006, in millions)

Min Kirbati 0.1Max Bangladesh 156

GNI Per Capita(2006)

Min Burundi 100Max Equatorial Guinea 8,510

PPP GNI per capita (2006)

Min Liberia 260Max Equatorial Guinea 16,620

Growth GDP per capita (2005-06)

Min Equatorial Guinea -7.8Max Maldives 21.5

Trade: Merchandise (2006, as % of GDP)

Min Central African Republic 24.1Max Lesotho 144.5

Trade: Services (2006, as % of GDP)

Min Bangladesh 5.9Max Gambia 36.4

FDI: Net Inflow(2006, as % of GDP)

Min Liberia -13Max Equatorial Guinea 19.3

FDI: Net Outflow(2006, as % of GDP)

Min Guinea-Bissau -2.8Max Angola 0.4

Country ValuePopulation(2006, in millions)

Min St. Kitts & Nevis 0.048Max Guatemala 13

GNI Per Capita(2006)

Min Solomon Islands 690Max Trinidad & Tobago 12,500

PPP GNI per capita (2006)

Min Papua New Guinea 1,630Max Trinidad & Tobago 16,800

Growth GDP per capita (2005-06)

Min Grenada -0.8Max Trinidad & Tobago 11.6

Trade: Merchandise (2006, as % of GDP)

Min Guatemala 50.8Max Guyana 166

Trade: Services (2006, as % of GDP)

Min Guatemala 8.7Max Mauritius 47.2

FDI: Net Inflow(2006, as % of GDP)

Min Papua New Guinea 0.6Max St. Kitts & Nevis 42.3

FDI: Net Outflow(2006, as % of GDP)

Min Trinidad & Tobago -2.3Max Jamaica 0.9

Table 1.3: Small Vulnerable Economies

Country ValuePopulation(2006, in millions)

Min Montenegro 0.601Max Ethiopia 77

GNI Per Capita(2006)

Min Burundi 100Max Botswana 5,570

PPP GNI per capita (2006)

Min Zimbabwe 170Max Botswana 11,730

Growth GDP per capita (2005-06)

Min Zimbabwe -6Max Azerbaijian 33

Trade: Merchandise (2006, as % of GDP)

Min Central African Republic 24.1Max Swaziland 160.9

Trade: Services (2006, as % of GDP)

Min Zambia 8.3Max Mongolia 32.2

FDI: Net Inflow(2006, as % of GDP)

Min Azerbaijian -2.9Max Serbia 16

FDI: Net Outflow(2006, as % of GDP)

Min Rwanda -0.6Max Azerbaijian 3.6

1.4: Landlocked Developing Countries

Table 1.5: Small Island Developing StatesCountry Value

Population(2006, in millions)

Min Palau 0.02

Max Cuba 11GNI Per Capita(2006)

Min Guinea-Bissau 190

Max Singapore 28,730PPP GNI per capita (2006)

Min Guinea-Bissau 460Max Singapore 43,300

Growth GDP per capita (2005-06)

Min Timor-Leste -6.7Max Maldives 21.5

Trade: Merchandise (2006, as % of GDP)

Min Haiti 44.5Max Singapore 386.2

Trade: Services (2006, as % of GDP)

Min Trinidad & Tobago 9.5Max Singapore 91.6

FDI: Net Inflow(2006, as % of GDP)

Min Tonga -0.91Max St. Kitts & Nevis 42.3

FDI: Net Outflow(2006, as % of GDP)

Min Guinea-Bissau -2.8Max Singapore 6.5 Back