[There are 51 Land Locked Countries (LLCs) in the world, including partially recognized states. In numbers, Europe has 19 such countries; Africa has 16 countries; Asia has 14 and Latin America has only 2. There are none in North America and Australasia, although most of the Pacific Islands classify themselves as ‘sea locked’ and hence are facing the problem of remoteness and high transport cost like those land locked. European landlocked nations are not handicapped because of the availability of international rivers; elaborate international treaties to govern rail and road traffic and, not least, the formation of the European Union. Many European land locked nations serve as transit and transshipment countries using multimodal transport means.]
By Madhukar SJB Rana*
Background
In all, there are currently 48 least developed
countries (LDCs) in the world. Most are in Africa (33 nations).There are four
in SAARC (Afghanistan, Bangladesh, Bhutan and Nepal). There are four in ASEAN
(Cambodia, Laos, Myanmar, Timor-Leste); six in Asia Pacific (Samoa, Solomon
Islands, Togo, Tuvalu, Vanuatu); one in West Asia (Yemen). There is just one
(Haiti) in the Western Hemisphere.
So far only 3 countries have graduated: Botswana
in 1994; Cape Verde in 2004 and Maldives in 2011. Soon to graduate will be
Equatorial Guinea; Samoa and Vanuatu. A three year grace period is granted by
the UN ECOSOC so that there is a smooth transition as aid and other benefits
are lost in the process derived from the UN special and differential measures
policy in favour of LDCs.
There are 51 Land Locked Countries (LLCs)
in the world, including partially recognized states. In numbers, Europe has 19
such countries; Africa has 16 countries; Asia has 14 and Latin America has only
2. There are none in North America and Australasia, although most of the
Pacific Islands classify themselves as ‘sea locked’ and hence are facing the
problem of remoteness and high transport cost like those land locked.
European landlocked nations are not handicapped because of the availability
of international rivers; elaborate international treaties to govern rail and
road traffic and, not least, the formation of the European Union. Many European
land locked nations serve as transit and transshipment countries
using multimodal transport means.
Of these 31 are Land Locked Developing Countries
(LLDCs) and among the 31 there are 16 classified as LLLDCs—suggesting a strong
correlation between being land locked and least developed.
Criteria for LDC and Graduation to DC status
Three criteria is being used by UNCTAD, They are
: (1) Poverty Index –comprising per capita income $ 992 -less than $1192; (b)
Human Asset Index – comprising a composite of (a) % of undernourished
population; (b) child mortality ratio;(c) adult literacy ratio and (d) gross secondary
school enrollment ratio. (3) Vulnerability Index—comprising (e) natural shocks
(measured by the fluctuations in agri –production and % population suffering
from natural disasters); (f) trade shocks (instability of trade in goods and
services); (g) physical shocks (% population lying in low lying areas); (h)
economic shocks (share of primary sector to GDP; export product
diversification); (i) smallness (population size) and (j) remoteness. In short,
indicators concerned with Nutrition, Health, Education, Structure of Economy.
To ‘graduate’ one has to cross the threshold
requirements of at least 2 out of the 3 Indexes over a period of 2 consecutive
years in a span of 6 years. However, if the Income Threshold is 2 times $ 1192
per capita then that country graduates irrespective of how it fares in the
other Indexes. Hence for Nepal to graduate it has to achieve a per capita
income of $ 2384 or say $ 2400. This is expected to happen by 2020, if its GDP
growth is 6.0% per annum as estimated by the National Planning Commission.
UNCTAD, as a global economic think tank, tends
to give priority to the Economic Vulnerability Index (EVI). In particular, to
two sectors, namely (a) structural transformation of agriculture and (b) export
diversification, as they are two of the most pro-poor sectors of the economy
for reduction of absolute poverty and generation of income through
labour-intensive employment creation.
What, however, has not been sufficiently
prioritized by UNCTAD in its EVI criteria is the dire need for infrastructure
development to address geographic structural constraints namely, remoteness and
high transportation-- and transit costs for the landlocked nations.
Furthermore, there is critical need to stress on infrastructure development
even in agriculture as the threats to food security can best be managed,
sustainably, through irrigation development rather than dependence on imports
of fertilizers.
It is suggested that the UNCTAD criteria should
embrace Geography more adequately as a primary, overarching cause for a
country’s least developed status. We note that LDCs fall under 3 main
categories: (a) mountain ecology, (b) island ecology and (c) desert ecology. So
far, global technologies developed have not been designed to cope with the
needs, opportunities and vulnerabilities of these economies and their
environments. This remark applies equally for structural transformation of the
primary sector (agriculture, livestock, forestry and mining) as also to cope
with disaster preparedness and management in the wake of climate change.
Nepal's geography offers not just constraints but also grand opportunities for
development if its mountain ecology is well respected by the planning process.
UNCTAD as a trade policy and negotiation body
rightly recognizes that the quickest means to poverty eradication is through
international trade and commerce. However, it would help LDCs graduate if it
could indicate the export: GDP threshold for speedy graduation and moves the UN
systems towards this objective for preferential access to global and regional
markets, investments and technical assistance for strengthening their national
institutions.
The UNCTAD framework needs to be integrated with
the frameworks of the UN agencies as an integrated process at the country level
with (mainly) UNDP, UNICEF, WHO, WB, IMF, IFC, ADB, FAO and UNIDO working in
tandem and, hopefully, coordinating with bilateral donor agencies.
UNCTAD must also incorporate into its integrated
planning framework for LDCs the vital importance of reducing the digital divide
as well as getting the global community to compensate the LDCs for their
conservation of forest and maintenance of bio diversity. Such compensation
could be in the form of debt write-offs for past tied aid. The extent of
globalization should not only be measured by the ratio of Trade in Goods and
Service: GDP, but also by the extent of the contribution of the non traded
goods and services towards regional and global sustainability and environment
protection.
Ideally, the herein proposed National Graduation
Framework Process should, with the support of the UN, enter the realm of the
SAARC Secretariat so that there is integration at the national, regional and
global level to graduate the SAARC LDCs in a focused manner.
Conclusion
Nepal, perhaps, is the only nation that has
opted to incorporate the UNCTAD’s 2012 Programme of Action for LDCs as its
national plan and mid-term strategy. It should, therefore, be treated as the
‘crown jewel’ by the UN and UNCTAD Secretary-Generals to help Nepal strengthen
its laws, institutions and management capacity to graduate. Not just economic
and financial reforms are necessary but more so institutional reforms to
strengthen the rule of law and the national capacity to rationally dialogue,
debate and dissent over choices in the national interest by and between all
stakeholders—not just political parties.
There are two sides to globalization. One, the
formal side where the “world is flat” promising immense opportunities for
Nepal’s prosperity driven by modern, dynamic institutions. Two, the informal
side which may be called the “other globalization”: where Nepal is steeped in
cross border smuggling; drugs, arms and human trafficking; money laundering and
counterfeiting as a means of national survival misgoverned by the mafia and war
lords in a fragmented fragile state; endowed with a failed democracy led by an
outmoded, short sighted, mediocre ruling political class occupied with carving
a niche for themselves, their families and parties rather than Nepal.
* The author is Professor of Economics at South Asian Institute of Management, SAIM and Former Finance Minister of Nepal.
