RESTRICTED
WORLD TRADE WT/COMTD/LLDC/W/1
13February 1996
ORGANIZATION(96-0547)
Sub-Committee onLeast-Developed Countries
Second Session
27February 1996
MEASURES TOASSIST AND FACILITATE THE EXPANSION OFTRADE AND
INVESTMENT OPPORTUNITIES OFLEAST-DEVELOPED COUNTRIES
Note bytheSecretariat
1. ThisNote bytheSecretariat addresses twoagenda items fortheSecond Meeting ofthe
Sub-CommitteeonLeast-DevelopedCountries;namely,the"Reviewofthespecialandspecificproblems
ofleast-developed countries" (item B)and"Consideration ofspecific measures toassist andfacilitate
theexpansionoftheleast-developedcountries'tradeandinvestmentopportunities,withaviewtoenabling
themtoachieve theirdevelopment objectives" (item C).Thefirstsection ofthenoteprovides abrief
overview ofsome ofthespecial andspecific problems facing LLDCs, particularly withrespect totaking
advantage oftheopportunities presented bytheUruguay Round. Thesecond section presents asummary
ofrecent international initiatives intheareaoftrade andinvestment infavour ofLLDCs. Thisnote
doesnotdescribethetechnicalcooperationactivitiesoftheWorldTradeOrganization(WTO)Secretariat,
northejointprogrammes thatitispursuing withotherinstitutions suchastheUnited Nations Conference
onTrade andDevelopment (UNCTAD) andtheInternational Trade Centre (ITC). These activities
aredescribed indetail inearlier documents submitted totheCommittee onTrade andDevelopment.1
Special andSpecific Problems
2. According tothemostrecent United Nations classification, forty-eight countries areconsidered
asleast-developed countries (LLDCs).2Their totalpopulation isestimated tobe500million andtheir
gross domestic product (GDP) percapita isconsiderably lower thantheworld average; in1992 it
wasUS$230 ascompared tomore thanUS$4,000 fortherestoftheworld. Theshare ofLLDCs in
world merchandise trade issmall; itdeclined from0.7percentin1975to0.3percentin1992. The
totalvalue oftheirexports amounted toUS$13.5 billion, representing 1.6percentofexports ofall
developingcountries.Giventheirlimitedexportearnings,theirshareofworldimportsiscorrespondingly
small. Imports byLLDCs in1992 amounted toUS$25.8 billion, or0.7percentofworld imports
and2.9percentoftheimports ofdeveloping countries. Inthesame year, onlythree LLDCs
(Bangladesh, Botswana andZambia) hadexports inexcess ofUS$1 billion; thetotalvalue ofexports
ofmostLLDCs onanindividual basis wasbetween US$0.3 andUS$0.7 billion. Further, theshare
1See"Technical Cooperation withDeveloping Countries" (WT/COMTD/W/12; 15November 1995) and
"Technical Cooperation oftheWTO; Relations withother international organizations" (WT/COMTD/W/7;
27June 1995).
2Currently, 22LLDCs areWTO Members. Seven LLDCs willbecome members when domestic ratification
procedures arecompleted, andfourareintheprocess ofaccession totheWTO (Table 1).WT/COMTD/LLDC/W/1
Page2
ofLLDCs inglobal trade inservices isalsonegligible duetotheirundeveloped services sectors.3
Notwithstanding theexpansion oftheworld economy inrecent years, economic conditions forLLDCs
continue toremain bleak.
3. While theimplementation oftheresults oftheUruguay Round willcreate export opportunities
forLLDCs, itisdoubtful whether many ofthem arepresently inaposition totakefulladvantage of
theavailable opportunities andincrease theirexports ofgoods andservices. Some oftheproblems
confronting LLDCs areaddressed below.
4. LLDC exports arehighly concentrated .Ofthetenmostimportant exports ofLLDCs in1992,
onlyoneisamanufactured product (i.e.clothing). There isanoverwhelming dependence onprimary
products which account formore thantwo-thirds oftheirtotalexports.4LLDCs trade isconcentrated
notonlyinterms oftheproducts exported, butalsointerms ofexport markets. Whereas in1992,
56percentoftheexports ofdeveloping countries weredestined fortheUnited States (U.S.), Japan
andtheEuropean Communities (EC), thesecountries werethedestination for70percentoftheexports
ofLLDCs. Forty-two percentoftheexports ofLLDCs were destined fortheEC,13percentfor
theU.S.and10percentforJapan. There isverylittleintra-trade among LLDCs ortrade between
LLDCs andother developing countries.
5. Notwithstandingtheexistenceofpreferentialschemes(e.g.theGeneralizedSystemofPreferences
(GSP), theLomé Convention), many LLDCs havenotbeeninaposition totakeadvantage ofpreferential
market access dueto,interalia,domestic constraints. Theproblem ofsupply-side constraints stems
fromavarietyofstructuralweaknesseswhichinhibittheexpansionofbothtraditionalandnon-traditional
exports. These include theacute shortage ofentrepreneurs, managers andengineers inmostLLDCs
asaresult ofinadequate investment ineducation, aswellasthemigration ofskilled labour toother
countries.Also,mostLLDCsdonothaveadequatetransportationnetworks,telecommunicationssystems,
andreliable electricity andwater supplies.
6. Many LLDCs havenotexperienced thenecessary realgrowth toencourage domestic savings
andinvestment. With respect toforeign direct investment (FDI), although developing countries as
agroup attracted US$84 billion or37percentofworld inflows in1994, theshare ofLLDCs was
negligible. Theinability toattract foreign investment isduetoanumber ofreasons; these include
thelackofpolitical stability; domestic policies andinstitutional arrangements thatdonotmeettheneeds
ofpotential investors. Thesmall sizeofLLDCs markets isanadditional difficulty. Regional economic
integration -which, ithasbeenargued, could helpoffset some ofthedisadvantages withrespect to
thesizeofmarkets -hasyettomaterialize asamajor institutional development among LLDCs. In
theabsence ofgreatly improved infrastructures, domestic savings inLLDCs willnotincrease to
acceptable levels norwillthere besignificant increases inFDIflows.
7. Given thelowlevelofexport revenues andtheinability ofLLDCs toattract adequate private
investment fromoverseas, mostLLDCs relyheavily onexternal financing, particularly development
assistancefunds.OfficialDevelopmentAssistance(ODA)isthesinglemostimportantsourceofexternal
financing forLLDCs, insome instances accounting forasmuch asaquarter oftheGDP. Asthelevel
3Some LLDCs, however, relyheavily onearnings fromtourism, transportation services andremittances from
citizens working abroad.
4In1992,manufacturesandprimaryproductsaccountedfornearly60percentand40percentoftotalexports
ofdeveloping countries, respectively; inthedeveloped countries, thecorresponding figures were 80percent
and20percent.WT/COMTD/LLDC/W/1
Page3
ofODA hasdeclined inrealterms inthe1990s, most LLDCs nowborrow, forexample, from
international financial markets tofinance theirdevelopment projects. According totheOECD, the
totaldebtofLLDCs in1993amounted toUS$127 billion or76percentoftheircombined GDP. For
theAfrican LLDCs, whose debtstood atUS$96.7 billion in1993, theratiooftotaldebttoGross
National Product (GNP) was130percent; innominal terms, theratiooftotaldebttoexports ofgoods
andservices increased from389percentin1985 to565percentin1993. LLDCs useasignificant
proportion oftheir limited export earnings toservice their debts. Recent debtrelief measures
implemented bydonors andlenders havenotprovided aneffective anddurable solution totheirdebt
problems. Priority-setting intheallocation ofavailable funds, inparticular development assistance,
isthusacrucial consideration. Reductions inthefinancing ofprojects, which would enable LLDCs
toexpand theireconomic base, diversify exports andparticipate effectively inthemultilateral trading
system, ismost unfortunate given thenewopportunities provided bytheUruguay Round.
Trade andInvestment Initiatives inFavour ofLLDCs5
(i) General
8. More thantwodecades ago,theinternational community recognized theexistence ofacategory
ofcountries whose distinctness laynotonlyintheprofound poverty oftheirpeople, butalsointhe
weakness oftheireconomies andinstitutional andhuman resources which wasoften compounded by
geophysical handicaps. Theinability ofthese countries toachieve economic andsocial development
wasseenasamajor challenge notonlyforthemselves, butalsotheinternational community, especially
considering thesusceptibility oftheireconomies toexternal shocks. Concern forthedeteriorating
economic conditions ofLLDCs ledtotheconvening ofameeting bytheUnited Nations inParis in
1981 which ledtotheadoption oftheSubstantial NewProgramme ofAction forthe1980'sforthe
Least Developed Countries (SNPA ).Thethrust oftheProgramme wastoencourage LLDCs toadopt
certain reform policies, which weretobecomplemented byinternational support measures. Despite
domestic policy reforms (sometimes asaresult oftheadvice oftheInternational Monetary Fund (IMF)
andtheWorld Bank) andtheadoption ofsupport measures bytheinternational community intheareas
ofaid,debtandtrade, theeconomies ofLLDCs havecollectively failed toregister anyrealprogress.
Theaverage GDP growth rateinthe1980s wasonly0.1percentinpercapita terms, withamajority
ofthese countries registering negative growth rates. Against thisbackground ofeconomic decline,
theinternationalcommunityconvenedasecondUnitedNationsConferencein1990toassesstheprogress
made byLLDCs following theadoption oftheSNPA, andtoexamine theadequacy ofsupport measures
taken bydonor countries toassist LLDCs intheirdevelopment efforts.
9. Theoutcome wastheParis Declaration andtheProgramme ofAction forLeast Developed
Countries forthe1990s .ThisDeclaration highlighted theprinciple ofshared responsibility and
strengthened partnership between LLDCs anddonor countries, anddetailed anumber ofmeasures
which could beimplemented atboththedomestic andinternational levels to"arrest thefurther
deterioration inthesocio-economic situation ofLLDCs, toreactivate andaccelerate growth and
development inthese countries and,intheprocess, tosetthem onthepathofsustained growth and
development".6Measures which wererecommended included, interalia,theestablishment ofamacro-
economic policy framework conducive tosustained economic growth andlong-term development;
development andmobilization ofhuman resources; development, expansion andmodernization of
5Thisnoteaddresses onlyaselection ofinternational initiatives implemented infavour ofLLDCs.
6UNCTAD, Report oftheHigh-level Intergovernmental Meeting ontheMid-Term Global Review onthe
Implementation oftheProgramme ofAction fortheLeast Developed Countries forthe1990's,p.5.WT/COMTD/LLDC/W/1
Page4
theproductive base; reversing thetrendtowards environmental degradation; promotion ofanintegrated
policy ofrural development aimed atincreasing food production; enhancing rural income and
non-agricultural sector activities; andtheprovision ofadequate external support.
10. Ahigh-levelintergovernmentalmeetingwasconvenedinSeptember/October1995inNewYork
toundertake theMid-Term Global Review ontheImplementation oftheProgramme ofAction forLDCs
forthe1990s andmake recommendations totheGeneral Assembly based ontheresults ofthereview.
Themeeting tookplace against thebackground offurther deterioration inthesocio-economic situation
ofLLDCs andaworsening intheirterms oftrade. Thenumber ofLLDCs hadincreased (from 41
to48).7After addressing thecauses forthedeterioration inthesituation ofthesecountries, theMid-Term
Global Review encouraged LLDCs, interalia,tofocus onmeasures which would restore andmaintain
macroeconomic stability when implementing domestic policies; promote thegrowth anddiversification
ofexports; strengthen anenabling environment forprivate sector investment andentrepreneurship;
enhance human resource development; andcontinue toimplement population anddevelopment
programmes. Donor countries wereencouraged toadopt support measures which would assist LLDCs
toovercome theirproblems, including increasing financial aidandassistance tothese countries.
11. Whilst these broad initiatives werebeing launched, trade Ministers agreed, inthecontext of
theUruguay Round, onanumber ofspecial provisions forLLDCs inthevarious WTO Agreements.
These provisions weredirected toincreasing thetrading opportunities ofLLDCs andother developing
countries.8Whereas theoverall results oftheUruguay Round were positive andshould result ina
significant expansion oftheworld economy, asnoted above, notallLLDCs arewellplaced tofully
share inthebenefits oftheRound.
(ii) Specific
12. OfficialDevelopmentAssistance(ODA)isoneformofspecificinternationalassistancetoLLDCs.
ThebulkofODA provided toLLDCs takestheformofatransfer offinancial resources onconcessional
terms. Multilateral assistance toLLDCs ismainly channelled through theInternational Development
Association (IDA) oftheWorld Bank andtheCommission oftheEuropean Communities (EC
Commission). LLDCs alsoreceive significant multilateral assistance from theUnited Nations
Development Programme (UNDP) andtheWorld Food Programme. In1993, ODA netdisbursements
totalled US$56.6 billion, ofwhich 26percentwent toLLDCs. OftheUS$14.9 billion granted to
LLDCs, 58percentwasbilateral aid.Germany wasthelargest donor ofbilateral assistance toLLDCs,
followed bytheUnited States, Japan andFrance, respectively. Alargeproportion ofaidwasforspecific
projects nominated bythedonors.9
7Since theearly 1970s, onlyonecountry (Botswana) hasbeen reclassified asadeveloping country. The
most recent additions totheLLDCs group areAngola andEritrea.
8TheWTO Secretariat hasidentified andclassified allthose provisions intheWTO Agreements thatare
designedtospecificallyassistLLDCs.See"ADescriptionoftheProvisionsConcerningLeast-DevelopedCountries
intheUruguay Round Agreements, Legal Instruments andMinisterial Decisions" (COM.TD/LLDC/W/54;
3November 1994).
9In1992, theaverage of"tied aid"commitments from OECD countries was31.5 percent. Theeffectiveness
oftiedaidhasbeen questioned bysome non-governmental agencies. In1992, theDAC sponsored theadoption
ofanumber ofstrengthened disciplines ("the Helsinki package") aimed atavoiding aidandtrade distortions due
tothetying ofaidandatensuring thataidcredits donotsubstitute forcommercial credits when these should
beavailable.WT/COMTD/LLDC/W/1
Page5
13. Bilateral assistance provided toLLDCs bythemember countries oftheOrganization for
Economic Co-operation andDevelopment (OECD) isusually reviewed intheDevelopment Assistance
Committee(DAC)oftheOECD.10TheobjectivesoftheDACincludeincreasingtheresourcestransferred
todeveloping countries andimproving theireffectiveness. TheDAC hassponsored theadoption of
anumber ofprinciples relating toaid.According totheDAC, thesuccess ofadevelopment policy
depends largely onpolitical andeconomic stability, good governance andpopular participation,
investment inpeople, reliance onmarket forces, concern fortheenvironment, andavigorous private
sector (Table 2).Since thebeginning ofthisdecade, theDAC hasincreasingly supported efforts to
strengthen thecapacity ofdeveloping countries topursue integrated development strategies. Ithas
made anumber ofobservations onthepositive effects ofregional cooperation among LLDCs andother
developing countries. Donor countries areencouraged, forexample, tomake provision intheiraid
programmes forregional activities. IntheviewoftheDAC, ifLLDCs andother developing countries
aretobenefit fromthenewtrading opportunities created bytheUruguay Round, complementary efforts
should beadopted atboththedomestic andinternational levels.11Among theinternational support
measures proposed bytheDAC are:revision ofGSPschemes; technical assistance withrespect to
institutional andadministrative capacity; dissemination ofinformation (onmarket access opportunities,
ontherelationship between tradeandinvestment andGSPuse,etc.); support forstructural adjustment;
private sector development (including FDIpromotion); transfer oftechnology (including know-how
andmanagement skills); andencouragement ofregional cooperation initiatives.
14. Assistance provided bytheECCommission toLLDCs wasUS$1.3 billion in199312,accounting
for35percentofitstotalassistance todeveloping countries. Initscooperation policies, theEC
Commissionprovidesthebeneficiariesofaidwithtradepreferencesandemphasizesregionalcooperation
andintegration. TheECCommission recently reassessed itsaidprogramme forthe1990s inorder
topromote closer coordination withmajor donors; advances indemocratization andrespect forhuman
rights; decentralization ofdecision-making through increased participation ofbeneficiaries inaid
management ("participatory development"); disbursement ofaidbytranches; useofnon-traditional
aidchannels (e.g. swaps); andbetter access fordeveloping countries 'exports totheECmarket.
Institutional reforms favouring decentralization andliberalization ofproduction andmarketing systems
havebeenidentified asamain priority. Other priorities include support forstructural adjustment,
private sector development, strengthening ofregional cooperation, training andeducation andprotection
oftheenvironment.
10TheDAC iscomposed of22Members (themember states oftheECwiththeexception ofGreece, the
ECCommission, Australia, Canada, Japan, NewZealand, Norway, Switzerland andtheUS.TheWorld Bank,
theIMFandtheUNDP arepermanent observers, andGreece, Iceland, Mexico andTurkey participate inDAC
meetings ofinterest tothem.
11NorwayhasrecentlyprovidedtheWTOSecretariatwithUS$2.5milliontoassistpoorerandleast-developed
countries toparticipate more actively andeffectively intheWTO andtotakeadvantage ofthenewopportunities
ininternational trade following theconclusion oftheUruguay Round.
12Theaddition ofassistance provided bilaterally byECmember countries results intheECcontributing
39percentofthetotalassistance toLLDCs in1993. Ifassistance provided byAustria, Finland andSweden
isadded, thecorresponding figure is43percent. Signatories oftheLomé Convention receive around 50percent
ofthetotalassistance granted bytheCommission andthemember countries.WT/COMTD/LLDC/W/1
Page6
15. Apart from emphasizing theneedtodevelop human resources inbeneficiary countries, the
mid-term review oftheLomé Convention -which tookplace in1995 -placed trade atthecentre of
theECCommission 'scooperation policy andhighlighted theneedtointegrate aidandtrade.13Under
thisapproach, aidisexpected toresult inincreased productivity andcompetitiveness ofACPcountries.
Thereview resulted inprovisions guaranteeing improved market access conditions forproducts ofexport
interest toACPcountries14andmeasures designed topromote private sector development. There are
alsoprovisions aimed atstrengthening industrial andregional cooperation anddecentralization.
16. TheWorld Bank isamajor provider ofmultilateral assistance toLLDCs. Assistance packages
bytheWorld Bank areoften associated withstructural adjustment programmes, butalsoinclude
development projects andtechnical assistance inabroader perspective.15Funding fordevelopment
projects inLLDCs isprovided bytheInternational Development Agency (IDA), asubsidiary ofthe
World Bank. Thedevelopment agenda forAfrica16shows thenewtrend inthecooperation policy
oftheWorld Bank. Theagenda stresses theneedformacroeconomic stability; progress ineducation,
health andpopulation; sustaining agriculture andtheenvironment; reducing gender inequities;
developing theprivate sector; building infrastructure; andsupporting capacity-building. Presently,
priority isattached tohuman-resources development andcapacity-building projects inSub-Saharan
Africa (Table 3).Projects implemented inthepoorest countries usually seektoestablish anenabling
environment forthedevelopment oftheprivate sector (encompassing, interalia,theestablishment
ofanadequate institutional framework reform ofthelegalsystem andtheadoption ofappropriate trade
andfiscal policies); theyrarely focus ontrade perse.Rather, trade policy isgenerally oneofthe
elements addressed when reforming institutions. Though assistance projects toLLDCs areusually
executed bytheWorld Bank andnational agencies, insome instances other international institutions
areinvolved intheimplementation phase. Examples ofprojects oftheWorld Bank which haveatrade
component inLLDCs include: thedevelopment anddiversification ofexports ofagricultural products
based onthepromotion oftheprivate sector involvement, involving institutional reforms coupled with
aninvestment programme tosupport thereform (e.g.Madagascar). Also, thereduction oftransport
andtransit costs byacting atboththeinfrastructure (railandfreight terminals) andcapacity-building
(trade facilitation) levels assist trade possibilities (e.g.Nepal). Another example relates tocapacity-
13TheECCommission hasprovided ECU 1.1million foreight regional seminars fortheACP countries.
Theseminars,organizedjointlywiththeWTOandtheACPSecretariats,andinvolvingboththepublicandprivate
sectors ofthecountries concerned, willfocus onthegeneral impact oftheUruguay Round oneach country;
theidentification ofpolicy measures which canserve tomaximize benefits fromliberalized anddiversified access
tomarkets; andtheadaptation oflawsandregulations inorder totakeadvantage oftheresults oftheRound.
14Inparticular,byprovidingmoreflexiblerulesoforiginandadditionaladvantageswithrespecttoagricultural
products.
15Themost important aidcoordination andco-financing mechanism inAfrica forstructural adjustment is
theSpecial Programme ofAssistance (SPA) forAfrica. TheSPA, established in1987 asaresult ofthepartnership
oftheinternational donor community, provides forrapid disbursing ofbalance-of-payment support tolow-income
debt-distressed economies inAfrica, withtheWorld Bank asitscoordinator. While themain concern ofSPA
donors istoprovide resources insupport ofreforms, SPAmeetings havebeeneffective incoordinating policies
andprocedures onbroader issues. Thepriorities forthethird three-year phase oftheprogramme (1994-96)
arestrengtheningimplementationofpolicyreform;povertyalleviation;coordinatedsupportforsectorinvestment
programmes; strengthening local management andinstitutional capacity; andimproved monitoring.
16DuetothelackofdataonLLDCs asagroup, andtaking intoaccount thefactthatthemajority ofLLDCs
aretobefound inAfrica, thissection willrefer toWorld Bank activities inSub-Saharan Africa.WT/COMTD/LLDC/W/1
Page7
building oftheagricultural private sector through theprovision ofbroad support toprofitable producers
andassistance forexporters tomeetthestandards ofimporting markets (e.g.Mali).
17. While technical assistance isoneelement inmostWorld Bank projects, itmay, insome cases,
comprise thetotality oftheproject itself. Technical assistance isalsoprovided outside thecontext
ofdevelopment projects through boththeProject Preparation Facility andtheInstitutional Development
Fund (IDF). TheIDF, which became operational in1992, wasestablished toprovide thenecessary
financing onatimely basis forinstitutional development related toreforming public policies,
macroeconomicmanagement,povertyalleviation,publicsectormanagement,privatesectordevelopment
andthemanagement oftheenvironment. Thegrants, which arelimited toUS$500,000 each, areoffered
tocountries which borrow fromtheWorld Bank. In1994, 90ofsuchgrants wereawarded, totalling
US$22.8 million.
18. In1994, theUnited Nations Development Programme adopted theconcept ofsustainable human
development asitsguiding principle. Thiswasfollowed byaredefinition andrealignment ofits
programmes tofocus onpoverty elimination, advancement ofwomen, creation ofemployment, and
protection andregeneration oftheenvironment. UNDP-assisted projects arefinanced fromitsown
resources (the"core resources"), cost-sharing contributions (bytherecipient government and/or athird
party donor) andgovernment contributions (locally provided inputs).17In1995, theUNDP increased
theportion ofitsprogramme funding infavour ofLLDCs to60percent; anadditional 28percent
wastobedirected tolow-income countries withpercapita income ofUS$750 orless. In1994,
expenditure programmes onindustry, transport, science andtechnology, andtrade anddevelopment
accounted forUS$37.2 million, or19percentoftotalUNDP fieldexpenditures inAfrican countries
(Table 4).18Under theheading oftradeanddevelopment, therearefourmaintypes ofprojects: global
tradepolicies (e.g.trade, investment andtechnology); tradeincommodities andmanufactures; trade
inservices (including tourism); andtrade expansion, trade promotion andexport development.
Programmes onpublic administration andmanagement areincluded under theheading "General
Development Issues". Other types ofprogrammes contain atrade orientation (e.g.capacity-building
project inthegarment industry inBangladesh relating tooperational standards andtraining ofinstructors
andmanagers).19
19. Since itsinception, UNCTAD hasinstituted anumber ofprojects designed toincrease the
participation ofLLDCs andother developing countries inthemultilateral trading system. Itsactivities
toassist LLDCs maybegrouped under twoheadings; country-specific/regional projects andglobal
projects. Withrespect tocountry andregional specific projects, UNCTAD hasconducted studies and
instituted projects inseveral LLDCs todetermine which sectors oftheireconomies could contribute
rapidly totheirsocio-economic development. Thebasicobjective istoalleviate supply-side constraints
andhelpdiversify theexport structures ofthese countries. Onerecent regional project launched by
UNCTAD isaimed atenhancing theunderstanding ofthenewmultilateral trading system byAfrican
countries, andequipping themtotakeadvantage ofthenewopportunities offered bytheUruguay Round
17Whilecost-sharingandgovernmentcontributionsaccountforaround10percentofthetotalfieldprogramme
expendituresinAfricancountries,theyaccountforaround90percentinLatinAmericanandCaribbeancountries.
18Thecorresponding figures foralltherecipient countries were US$158.3 million and15percent.
19Anumber ofUNDP-financed projects areexecuted bydifferent organizations; intheareaoftrade, the
main executing agencies areUNCTAD andtheITC. TheWTO isnotanexecuting agency oftheUNDP. In
1993, theongoing projects executed byUNCTAD andITCreached US$93.3 million, which represented around
70percentofthetotalongoing projects ontrade anddevelopment projects.WT/COMTD/LLDC/W/1
Page8
withtheviewtofacilitating theirintegration intotheworld economy. Theproject, which isfinanced
from UNDP resources, iscurrently being carried outinthree African countries andinvolves local
academics andbusiness communities. Itconsists basically ofresearch ontherecent performance of
specific industries. Based ontheresults oftheresearch, UNCTAD would provide additional assistance
toactivities aimed athalting theeconomic decline ofLLDCs andenabling them tomaximise the
opportunities offered bytheRound. Thereafter, itisenvisaged thatUNCTAD would, jointly with
other international bodies andofficials fromAfrican countries, explore thepossibilities ofexpanding
production inthose particular sectors. Itcould alsoprovide information onnon-traditional markets
which areexpanding, thusenabling LLDCs todiversify boththeirexport structure andmarkets.
20. With respect toglobal projects, inFebruary 1992, UNCTAD launched itsTrade Efficiency
Programme (TEP) withtheview toassisting LLDCs andother disadvantaged countries toenhance
theirparticipation inworld trade. TheProgramme specifically focuses onvulnerable countries and
firms which could losetheirmarket shares asaresult oftheaccelerated paceofchange intheexternal
tradeenvironment. Itistheobjective ofTEPtofacilitate thesimplification andharmonization oftrade
procedures worldwide, andprovide traders withaccess tosophisticated technologies andinformation
networks commonly usedbymultinational companies. Keycomponents ofUNCTAD 'swork onTrade
Efficiency aretheGlobal Trade Point Network (GTPNet) andtheAutomated System forCustoms Data
(ASYCUDA).
21. TheGTPNet isdesigned toestablish andoperate Trade Points inallregions oftheworld and
tointerconnect them through electronic datainterchange. Trade Points aretopromote thetrade
competitiveness andefficiency oftheeconomies byproviding participants (from thepublic andprivate
sectors) withtrade-related data. Thestaffing andfinancing ofTrade Points isprimarily local, although
UNCTAD mayprovide guidelines fortheirestablishment. Asafirststep, local traders canobtain
data(including market information, transportation options andprices, insurance facilities, credit
availability,customsrequirements,import/exportregulations,etc.)fromtheTradePoints.Whennational
Trade Points develop electronic linksamong themselves, andwithothermajor service providers, traders
allaround theworld gainaccess toabroad array ofdatabases dealing withtradeinformation, facilitation
andprocedures, builtupwithin thelocalTrade Points themselves oronaninternational basis. The
networkisthencapableofelectronicallychannellingtradingopportunities,tenders,etc.Thedevelopment
ofTrade Points insome LLDCs, particularly those inAfrica, hasbeenhampered byinfrastructural,
technical know-how, andfinancial problems.
22. TheAutomatic System forCustoms Data(ASYCUDA) isacost-effective customs computerized
programme which enables countries, particularly LLDCs, toimprove theeffectiveness oftheircustoms
revenue administrations. Thebasicobjectives are,interalia,toassist countries tosimplify andimprove
customs procedures by,forexample, reducing customs clearance times andallowing customs revenue
administrations tomaximise revenue byremoving waste andother unnecessary impediments. Italso
aimsatfacilitating data-collecting services withtheviewtoassisting countries toobtain reliable foreign
tradestatistics. Thedevelopment ofthesystem wasmainly financed bytheSwiss government. National
ASYCUDA systems arealsoexpected tointeract more efficiently through theirconnection withthe
GTPNet, which willgivetraders easier access tocustoms-related information. Withextra-budgetary
assistance fromdonor countries, ASYCUDA hasbeenadopted by,andisbeing introduced in,anumber
ofcountries -especially LLDCs -inanattempt todevelop user-friendly customs procedures.
23. Foursubprogrammes oftheInternational Trade Centre (ITC) dealwithvertical matters, namely:
institutionalinfrastructure,includingbusinessorganizationsfortradepromotionandexportdevelopment;
product andmarket research, development andpromotion; import operation andtechniques; andhuman
resource development fortrade promotion. In1994, these subprogrammes received respectively
27percent, 53percent, 17percentand3percentofthetechnical cooperation resources ofITCWT/COMTD/LLDC/W/1
Page9
(US$15.9 million).20Seven horizontal matters ("global priorities") extend across allsubprogrammes;
tradepromotion inpoverty alleviation, including ruralexport development; least-developed countries;
South-Southtradeandeconomiccooperationamongdevelopingcountries;womenintradedevelopment;
exportbusinessdevelopment;environmentalconsiderationsinexportdevelopment;andhumanresource
development. Inthelasttenyears, assistance toLLDCs hasamounted toapproximately one-fourth
ofthetotaltechnical cooperation resources oftheITC. In1994, ittotalled US$4.2 million, or26per
centofitstotaltechnical cooperation spending. Recent projects financed inLLDCs include assistance
intheadoption ofstrategies fortrade development -i.e.theroles andfunctions ofgovernment and
public sector institutions andprivate sector enterprises -inCape Verde andCentral African Republic;
assistanceindesigningtheinstitutionalframeworkfortheprovisionofservicestosmallandmedium-sized
enterprises inCongo; andproviding information onthelegalaspects ofinternational tradetodifferent
countries.
24. Following theconclusion oftheUruguay Round, thestructure andpriorities oftheITCare
being reviewed byitsmanagement board. TheJointAdvisory Group oftheITC-itsgoverning body,
approved anewsetofpriorities inJune1995 (the"core services") andanindicative allocation of
resources toeachofthese programmes: product andmarket development (30percent), development
oftrade support services (25percent), tradeinformation (15percent), human resource development
(15percent), international purchasing andsupply management (10percent) andneeds assessment
andprogramme design (5percent). Agreement wasalsoreached ontheestablishment ofaGlobal
Trust Fund andaConsultative Committee, whose membership willbebroadly representative ofdonor
andrecipient countries. TheITCistherefore currently promoting anenabling environment forthe
conduct ofbusiness andtrade, withspecial emphasis ontradeinservices, capacity-building andexport
promotion (including trade information).
20Total technical cooperation resources arecomposed ofITC'strust funds andUNDP funds.WT/COMTD/LLDC/W/1
Page10
TABLE 1
UNLLDCs (48) LLDCs which were contracting
parties ofGATT 1947 (29)LLDCs status intheWTO
Afghanistan
Angola
Bangladesh
Benin
Bhutan
Burkina Faso
Burundi
Cambodia
Cape Verde
Central African Rep.
Chad
Comoros
Djibouti
Eq.Guinea
Eritria
Ethiopia
Gambia
Guinea
Guinea Bissau
Haiti
Kiribati
Laos
Lesotho
Liberia
Madagascar
Malawi
Maldives
Mali
Mauritania
Mozambique
Myanmar
Nepal
Niger
Rwanda
Samoa
SaoTome &Principe
Sierra Leone
Solomon Islands
Somalia
Sudan
Tanzania
Togo
Tuvalu
Uganda
Vanuatu
Yemen
Zaire
ZambiaAngola
Bangladesh
Benin
Burkina Faso
Burundi
Central African Rep.
Chad
Djibouti
Gambia
Guinea
Guinea Bissau
Haiti
Lesotho
Madagascar
Malawi
Maldives
Mali
Mauritania
Mozambique
Myanmar
Niger
Rwanda
Sierra Leone
Solomon Islands
Tanzania
Togo
Uganda
Zaire
ZambiaMembers (22)
Bangladesh
Benin*
Burkina Faso
Burundi
Central African Rep.
Djibouti
Guinea
Guinea Bissau
Haiti
Lesotho
Madagascar
Malawi
Maldives
Mali
Mauritania
Mozambique
Myanmar
Sierra Leone
Tanzania
Togo
Uganda
Zambia
Ratification pending (7)
Angola
Chad
Gambia
Niger
Rwanda
Solomon Islands
Zaire
Acceding (4)
Cambodia
Nepal
Sudan
Vanuatu
*Effective on22February 1996.WT/COMTD/LLDC/W/1
Page11
TABLE 2
Official Development Financing Commitments toLeast-Developed Countries, bySector
Sector 1989 1992 1993
% % %
Education 5 6 6
Health 3 6 4
Other social infrastructure 6 7 6
Water, Sanitation, Sewage 6 5 7
Energy 12 5 9
Telecommunications 2 3 3
Transportation 16 7 11
Agriculture 18 16 12
Extractive industries 1 1 2
Manufacturing 4 2 1
Trading, Banking, Tourism 2 4 1
Multisector aid 1 11 7
Programme aid 12 11 10
Debt reorganization 5 8 20
Food aid 4 2 1
Emergency aid 1 4 2
Unspecified 1 1 0
TOTAL 100 100 100
Source: OECD.WT/COMTD/LLDC/W/1
Page12
TABLE 3
World Bank Lending toBorrowers inSub-Saharan Africa, bySector
(US$ million, fiscal year)
Sector Annual Average
1986-901994 1995
Value % Value % Value %
Agriculture 661.4 22.2 152.6 5.4 375.1 16.4
Energy 163.6 5.5 276.2 9.8 255.3 11.2
Environment - - 2.6 0.1 - -
Human resources
Education 167.3 5.6 325.5 11.6 201.2 8.8
Population, health, nutrition 109.5 3.7 161.6 5.8 311.5 13.6
Industry andFinance 427.6 14.3 429.7 15.3 60.2 2.6
Infrastructure andurban
development813.4 27.2 700.5 25.0 481 21.1
Mining andother extractive 30.0 1.0 - - 24.8 1.1
Multisector 534.3 17.9 711.0 25.3 470.9 20.6
Public sector management 79.0 2.7 48.2 1.7 104.3 4.6
Total 2,986.1 100.0 2807.9 100.0 2,284.3 100.0
IBRD 1,039.9 34.8 127.7 4.6 80.7 3.5
IDA 1,946.2 65.2 2,680.2 95.5 2,203.6 96.5
Source: World Bank.WT/COMTD/LLDC/W/1
Page13
TABLE 4
1994 UNDP Field Programme Expenditures, bySector21
(US$ million)
Sector Value %
General development issues 85.6 43.2
Industry, Science &Technology, Transport, Trade &Development 37.2 18.8
Health, Education, Employment 33.3 16.8
Agriculture 29.9 15.1
Environment, Energy, Forestry &Fisheries, Natural Resources 23.0 11.6
Humanitarian Assistance &Disaster Management, Human Settlements 13.9 7.0
Other 12.9 6.5
Communications andInformation 7.8 3.9
TOTAL 198.0 100.0
Source: UNDP.
21Includes alsocost-sharing andGovernment contributions.