The Hindu Business Line : UNDP - Escap report on LDCs of Asia-Pacific<br>Poor nations in rich neighbourhood

As developed countries blame lack of governance and endemic corruption for the continued backwardness of the poor countries, the UN report reminds the rich that nations suffering from bad governance, weak institutions and insufficient implementation capacities are often those most in need of support.

IT IS a paradox that despite belonging to an economically dynamic continent, 14 nations of the Asia-Pacific region remain extremely backward and development deficit. These 14 Least Developed Countries — Afghanistan, Bangladesh, Bhutan, Cambodia, Kirbati, Lao People's Democratic Republic, the Maldives, Myanmar, Nepal, Samoa, Solomon Islands, Timor-Leste, Tuvalu and Vanuatu — together account for 37 per cent of the global LDC population. Bangladesh is the largest, with a population of more than 130 million, while Tuvalu is the smallest, with less than 11,000 people.

The stark contrast also means sharply differing experiences with development. A bird's eye view of this is provided by the United Nations Development Programme-Economic and Social Commission for Asia and the Pacific Report, Voices of the LDCs of Asia and the Pacific, released worldwide on Friday. Most LDCs are quite far away from fulfilling the eight Millennium Development Goals (MDGs) that deal with eradication of extreme poverty and hunger, providing universal primary education, ensuring gender equality and empowerment of women, reducing infant mortality, improving maternal health, combating HIV/AIDs, malaria and other diseases, ensuring environmental sustainability and developing a global partnership for development.

With just a decade to go for achieving the MDGs, the report of the two UN outfits says the LDCs, as also the developed and developing countries, must find ways to address the unique challenges faced by these 14 nations. Even as nascent prosperity and well-being in the region could lead to heightened trade with LDCs and a further opening up of markets, the report warns that if the development partners do not rise to the challenges, the region's overall dynamism could aggravate inequalities and intensify disaffection, spilling across national boundaries. The report observes with regret that the recent announcement by the G-8 Finance Ministers of cancellation of all debt owed to multilateral agencies by 18 poorest countries did not include even one of the 14 Asia-Pacific LDCs. As the bold initiative of debt relief for 14 African and four Latin American countries is to facilitate them to use the money saved on debt servicing for health, education and poverty relief, the report pleads for the G-8 to consider the case of the Asia-Pacific LDCs.

The UNDP-ESCAP report makes a case for all development partners of the LDCs to consider extending tariff- and quota-free access for exports from these countries; enhancing their programme of debt relief, including cancellation of official bilateral debt and increasing Official Development Assistance (ODA) for those most in need.

The textiles and clothing export industry employs some around two million workers in these countries, of which 70 per cent are women. In 2003, the share of those items in the total export earnings from Bangladesh was 76 per cent, in Cambodia 95 per cent and in Nepal 40 per cent. Stating that the ending of the Multi-Fibre Arrangement (MFA) has been a major concern to many LDCs that have focussed and relied on garment exports, it has cited the case of Bangladesh, which has seen its textile exports fall by 6 per cent in the five months following the end of the MFA.

Special textile quotas for severely affected Asia-Pacific LDCs can be proposed in the context of the ongoing negotiations under the Doha Development Round (DDR). Any setback in the export of textile and apparel could have adverse fallouts on achieving MDGs in such areas as poverty alleviation, health and education for countries such as Cambodia, Bangladesh and Nepal, where earnings from manufactured items account for as much as 85, 55 and 52 per cent of total earnings from exports respectively. The WTO Ministerial Conference in Hong Kong ahead could provide LDCs with a window of opportunity to get greater market access.

While global zero-tariff and quota-free access for exports from the LDCs could be an important tool, other issues of importance to the Asia-Pacific LDCs include market access for farm products and liberalisation of the movement of natural persons.

"Rather than simply staying away from bad performers, the approach has to be one of continuing and constructive engagement. Recipient countries need to demonstrate a willingness to improve the state of governance, including corruption issues, to a level where donors feel assured to commit more support — for their part, donors have to be ready to strengthen the capacity of poor countries to address governance problems," the report says, putting an end to the endless debate about aid fatigue and the recipients' recalcitrance in mending old ways.

As the rationale for development resting on a win-win partnership, the UN report rightly appeals to all the development partners of the LDCs to shed negativism and defeatism and instead proceed on the premise that such a partnership is for the mutual benefit of LDCs and their partners. This is not only so on commercial and strategic grounds but is also morally right, and this is the message of this monograph that sounds a wakeup call for action.

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