Capacity building, not just exemptions are key to LDC export growth

6 December 2013
ITC News

(BALI, INDONESIA) — The international trade community must treat least developed countries (LDCs) as mature negotiating partners and support them in growing their way out of poverty, said International Trade Centre (ITC) Chief Advisor Matthew Wilson at the Bali Trade and Development Symposium, which took place in parallel with the Ninth World Trade Organization (WTO) Ministerial Conference this week.

Speaking at a session entitled, The way forward after Bali: challenges and opportunities for LDCs in Bali, Wilson said:

"LDCs no longer need other countries and agencies to tell them what is good for their development – they know and should be confident in that."

The session, organized by the Geneva-based IDEAS Centre, took place on 5 December.

Wilson told the audience that LDCs’ own approach to negotiations has changed. Instead of focusing only on exemptions, they are also requesting capacity-building assistance. ITC is addressing their needs at several levels through projects designed in collaboration with recipient countries; it works with LDCs and their small and medium-sized enterprises (SMEs), facilitating their integration into value chains, through skills development, and matching them with buyers. ITC also works with policymakers and trade support institutions to promote trade policies and regulations that create an SME-friendly business environment. This includes the facilitation of private-public dialogue in the preparation of trade policy.

Wilson also talked about the importance of the multilateral trading system for LDCs. While in the WTO all countries get a seat at the table, regardless of the size of their economies, LDCs are often bypassed in bilateral and regional agreements, he said.

“This is yet another reason why we need to maintain the multilateral process.”

In 2011, the last year for which data is available, LDC exports grew by almost 24%, faster than exports from other developing countries. During the 2000-2011 period LDC exports grew at an average annual rate of almost 17%, compared to just below 13% from other developing countries. The decline in poverty rates, at the same time, is less impressive. In sub-Saharan Africa, where the majority of LDCs are, the proportion of people living on less than US$ 1.25 a day deceased from 56.5% in 1990 to 47.5% in 2008.