With trade gap topping US$92 billion for least developed nations, ministers from world’s poorest nations cite evidence of success with trade as development solution; push for entry into global markets
BUENOS AIRES (December 12, 2017) – In the face of a US$93-billion trade deficit — much of it due to a drop in commodity prices — trade officials from some of the world's poorest nations today joined donor governments at the World Trade Organization Ministerial Conference in calling for greater support for connecting the least developed economies to export markets.
“Least developed countries account for 13 percent of the world’s population, but engage in less than one percent of global trade,” said Pan Sorasak, Minister of Commerce, Royal Government of Cambodia, speaking at a press briefing early today. “We have a long way to go, but we have evidence that trade can serve as an engine for developing sustainably. It is time to invest in this promise of a better life for our poorest and most vulnerable citizens.”
Yesterday (December 11), in a significant show of support for trade as a development solution, the UK government announced at the WTO conference a commitment of £16 million (around US$21.3 million) to 51 of the world’s poorest countries. Channelled through an innovative global trade programme known as the Enhanced Integrated Framework (EIF), the funds will help the least developed countries (LDCs) develop the tools, skills and economic capacity they need to become competitive in targeting new markets for their goods and services.
“Trade and economic development is clearly the most effective way for countries to create investment and jobs," said Greg Hands, Minister of State for Trade Policy, Department for International Trade, UK. "I’m delighted that the UK’s generous support to the Enhanced Integrated Framework will help the world’s poorest countries trade out of poverty.”
WTO Director General Roberto Azevêdo cited EIF’s progress with helping LDCs improve production and create jobs by producing spices, mangoes, honey, textiles and other products. Several of EIF’s partner countries, which are all in Africa, Asia and the Pacific, have seen a growth in services, such as tourism and information technology. Since 2008, when EIF was created, 51 countries have benefitted from the programme’s interventions; in 2016 alone, EIF supported 189 micro, small and medium-sized enterprises in LDCs around the world.
“The EIF does vital work and has made a real impact on the ground,” the WTO Director General said. “But we are starting from a low base here. There is still a huge amount to be done. We are particularly grateful for the UK's commitment at this time. We see it as recognition that EIF and the countries it partners with are indeed on the right path."
The LDCs face considerable challenges, however. The trade gap in 2016 stood at US$92.9 billion — a nine-fold increase since 2005, and the LDCs’ share of the global market contracted by six percent last year, mostly due to a drop in the price of fuels and mining products, according to the Director General.
EIF Executive Director Ratnakar Adhikari said the funding commitments and pledges made at the Ministerial Conference and in the coming year will help LDCs ready themselves for paradigm shifts in the global economic system, including the growing trend in E-Commerce. EIF’s work so far has provided the world with success stories, Adhikari added, “But this does not mean that the work is done. Rather, it is a reminder of how important this work is—and how much more focus it deserves.”