UNCTAD press conference 1 December 2020

Good afternoon everyone.

Thank you for being with us today.

Hometown is presenting today.

It's 2020 report on least developed countries.

It's under embargo until the 3rd of December at 6:00 AM GMT, 7:00 AM Geneva time.

So we have plenty of time to digest this report, this important report.

I'm happy to welcome on the podium Mokisaki Tui, Secretary General, Avantad and Paula Kiwi, Director of the Division for Africa and Least Developed Countries and Special Programmes.

LTCS are the news today.

I will first give the floor to you Doctor Kituyi for introductory remarks and and Paula Kiwi will compliment and will give the floor to you for questions.

Doctor Kituyi, over to you.

Thank you very, very much, Kathleen.

Members of the press, ladies and gentlemen, first, may I bid you welcome to the launch of our LDC Report 2020.

Unfortunately, due to obvious circumstances, we're not able to share a physical podium with you, but from afar, I'll give you a brief walk through some of the phase and then invite my friends, Ralph said and Paula Kuomi to give you a deeper dive and answer some of the questions in the report.

But before I do so, may I take the occasion to express my appreciation to both Paul and his team, who under these very difficult circumstances of what law to put this important report together and particularly making it very relevant to the larger corpus of issues and paper and productions that we're making around the pandemic and the trajectory of recovery.

This report essentially is a logical next step after our Seminole work in developing an index for productive capacity measurement.

And it applies this new tool in both forensically looking at what has been the trajectory of capacity building in LD CS, but also related with the vulnerabilities associated with the pandemic and, and, and, and, and help to identify what are the key necessary levers for recovering better after the the pandemic.

As you have read now, of course, it's about productive capacities for the new decade.

The COVID crisis is leading LDCs to their worst economic performance in 30 years, with per capita GDP for the group expected to fall 2.6% this year.

Amidst widespread unemployment law, employment laws, widening fiscal deficits and record current account deficits, we project that absolute poverty in their disease will expand by 32,000,000 and extreme poverty rate in these countries as a group will rise from 32.5% to 35.7 in the current year.

The pandemic is reversing years of progress making.

The pandemic is reversing years of progress that had been made earlier on, in particularly the progress on the SDG agenda and casting doubt on the possibilities of achieving the goal set out.

The LDC's that have been most active and innovative in combative pandemic have been those with the most developed productive capacity and institutional capacities which could be mobilised in the face of the pandemic.

For example, countries like Senegal which have got rapid and cheap COVID testing kids, Bangladesh and others like Ethiopia repurposing garment factories to produce PPES.

The development of productive capacities, which is the theme of this report, has been too slow in most air disease to overcome their major development challenges and they are falling behind other developing countries.

To date, structural transformation in air disease has been restricted to just a handful of countries like Bangladesh, Ethiopia, Cambodia, the People's Democratic Republic of Laos, Myanmar, Nepal and Rwanda.

Only in this small handful of air disease have we experienced sufficient industrial growth and an expansion of modern services sectors, leading to stronger labour productivity gains.

In contrast, structural transformation has been much slower in most African indices, island indices and 80 where agriculture and traditional service sectors are relatively more important in generating employment and output.

There are low productivity levels and growth continuing to constrain living standards in these countries.

L disease as a group have been diverging over the long term from other non LDC developing countries.

From 1990 to today, the divergent has more than doubled to six times better in the non LDC developing countries compared to three times when it was 30 years ago.

Untad's productive capacity index shows that the majority of air disease have low productive capabilities and that these productive capacities have been worsening, not improving in most of them over the past decade.

For example, air disease average productive capacity index level was 40% below that of other developing countries from 2011 to 2018.

The number of air disease with a higher PCI rating fell from 11 countries in 2001 to 6 countries two years ago, where the number of air disease with lower productive capacity index scores rose from 18 in 2001 to 26 in 2018.

Any future development of productive capacities is becoming even more difficult due to the digital divide.

The digital revolution has brought increased attention to hopes of leapfrogging, but firms do not automatically transform into digital enterprises because of the costly and sequential process of learning and acquisition of technological capability.

The digital revolution, therefore, in the productive sphere of a disease, will only take shape with active industrial policies that strengthen and develop the technological capabilities of funds and funds to master and apply these technologies to production.

The main challenge, of course, for these countries is to enter the 4th Industrial Revolution and the digital economy, being that most of them have not yet fully integrated the previous three industrial revolutions into their productive base.

Priorities in policy terms for air disease going forward are one, counter cyclical policies to cushion the impact of the COVID crisis.

Secondly, an investment push to redress long standing infrastructure gaps and support employment creation, forward-looking STI policies to upgrade the skill base online with market needs, and industrial and sectoral policies to promote domestic value addition and deepen productive linkages.

The fallout from the pandemic highlights the pivotal role of the state as investor, rule setter and coordinator, emphasising the importance of institutional capacity to steer development strategies and fuse stable fundamentals with a concerted investment push supported supporting employment creation and shift towards higher productivity activities.

But LDC governments are hard pressed to do this effectively without sufficient international support and financing.

Sadly, international support to air disease has mostly been ineffective in assisting achieve structural transformation and reaching the development goals set out in the Insert Group Instanbul Plan of Action a decade ago.

News New forms of support need to be devised which will tackle especially the widening technological divide and weakening productive capabilities.

This new form of support focused on productive capacity should be reflected in the next international plan of action for ADC's to be adopted during the 5th UN Conference on ADC's which will be held in January 2022 in Qatar.

In our independent post pandemic world, answer this call for strengthening the global partnership.

Support for L disease goes well beyond the moral commitment to leave now and behind.

It's also a step towards building back differently and investing in systemic resilience.

I hope that in the course of these discussions, you'll have a good idea of the sense of what this timely report puts on the table.

And I very much look forward to fruitful engagement as I invite my colleagues to give a bit more noise the substantiation of the report.

Thank you very much, Catherine.

[Other language spoken]

You, Doctor, Kitty, Paul, you have the floor.

Ladies and gentlemen, the press.

Thank you very much, Secretary General.

Thank you very much, Catherine.

Thank you very much.

I just want to address a few and to highlight and to emphasise a few points of what the Secretary General mentioned in this report, which is indeed very timely.

LDC's have, as, as we know, have been facing considerable challenges with regard to climate change with regard.

To Am I hitting an echo on your speech?

[Other language spoken]

Yes, we can hear you with regard to climate change, the recession and now COVID.

And this report is timely because it really analysis what the recovery measures and emphasis should be on.

And it also timely because of the productive capacity index that UNTED has developed.

And it's been used for the first time to actually do some deep research and analysis on this issue.

And as you may know that UNTED the Voice had the definition of productive capacity as the productive resources, entrepreneurial capabilities and production linkages which together determine the capacity of a country to provide goods and services and enable it to grow and development.

And as such, we developed the productive capacity index, which looks at 8 categories, natural capital, human capital, energy, transport, ICT institutions, structural change and, and infrastructure.

Now it is quite clear that LDCs being commodity driven need to move forward in the development paradigm.

And we've seen through the COVID crisis that because they're commodity driven, they've been able, and all the lockdown that has happened, they've been able to export less.

Their revenues are down, the tax collection is down, and their economies have suffered considerably and less funding has been available for the implementation of social development issues.

And there is a downward spiral as they're not able also to service their debt.

And in this report, what we have seen very clearly is that there is a need for us to LDCs to to focus on that productive capacity to also to be able to diversify the economies, to be able to deal with shocks and resilience is one of the most important critical issues that we focus on.

And to be able to have the productive capacity, to be able to have the invention capabilities, to be able to have the technological adaptation to these capabilities and to also to be able to produce and produce issues.

We've seen that in some of the LDCs, in the Asian LDCs that the manufacturing has increased slightly over the years.

From 2001 to 2019, it's increased by 8 and 7%.

And the total share of employment within that space has also increased by about four, 5%.

But we see in African countries, LDCs that the share of the GDP has gone down by by 1% over the years and our our share of employment has been roughly equal.

It's essential therefore, that in this report we point out that productive capacity must be the centrepiece of the work that LDCs look to in the future with regard to policy decisions.

And it's through our index, we're able to identify the areas where they need support and where they need to develop the policies within those respective 8 categories.

I'd also like to reemphasize what their Secretary General said is that from the report we've seen that very clearly that the state plays a very critical role and must play that critical role in steering the development strategies and plans, in Rule setting, how to engage and also investment, initial investment and in coordination of these activities so that we can get the LDCs on track.

It is quite clear that the international support measures also mentioned by the selectogen have not been up to par and there is need for additional international support measures and a new set of international support measures that will help.

And as such this is we're looking at and the title of the whole report is productive advice for new for the new decade.

It is without a doubt that strengthening the global partnership in support of LDCs is an investment in the in the resilience of the entire global system and not in the resilience only of these developed countries.

I think I'll stop there.

We can take some questions and then my colleague Rolf can jump in as need be.

Thank you very much.

It's a strong caller for these 47 countries.

The floor is now open for questions.

[Other language spoken]

Peter, you have the floor.

Thank you very much.

[Other language spoken]

I'd just like to ask you, in this COVID-19 pandemic, has the world forgotten about LDCs?

[Other language spoken]

You know a number of things.

First of all, the jury is still out about specifically how much ambition has been there to mitigate the economic costs of the pandemic to the developing countries.

As many countries have understandably given a priority to domestic mitigation of the health hazard and limitation through different in fiscal instruments of the economic impact of the the the pandemic in our territories.

However, you know the initiative of the G20 about debt service suspension initiative, the initiative at freeing up and enlarging special drawing rights at IMF as significant contributors.

But you know in net terms what you see is that these are instruments that are having a greater uptake from non LDC developing countries and emerging economies.

Now how much the global community will move from moral places of leaving now and behind to actual action to not only make up for the and and and and released the pledges to LDCs and to fresh support as stimuli to recover is is what we'll wait to see.

That's part of the global advocacy work we're involved in particularly championed by Canada and Jamaica and the United Nations.

[Other language spoken]

You Doctor Kiji Palm, you may want to add, I think Doctor Katie has has has answered that question.

Thank you very much.

We have to play with the the technique.

Sorry.

Peter, you have a follow up, please.

Over to you.

[Other language spoken]

You know, I'm just wondering if you could be a bit clear about it because, you know, I mean, I, we just have to look at the United Kingdom.

Last week I think it tried to slash its development aid budget from 0.7 to 0.5.

Now that surely is not a, you know, and and the UK was one of the biggest contributors of European economies and the the bigger economies to development aid.

So I mean, are we seeing the world just ignoring the LDCs?

I cannot be in a position to move from the the specific to the general in in the sense that we already saw the merger of the defeat the Department of International Development Cooperation with the means of foreign affairs was done and rationalised the context of actually declining ambitions in the ODS support.

So to me, downsizing from the ambitions of Britain, where UK has been one of the global leaders in the percentage of, of, of of national resources committed to the ODS support programme as unfortunate.

But I don't know if it represents a pattern or a trend.

But it's also a reality that in our discourse, we notice a sense of more inward looking as countries look to deal with the pandemic at home first and foremost.

And of course, that means that the most vulnerable manners are are are the ones most impacted by the drying up of international instruments of solidarity.

Thank you Doctor Kituyi, I don't see any hand raised.

[Other language spoken]

I, I, I want to remind you that we are on the embargo this press conference as well as the document reports and press releases until Thursday, 3rd of December at 6:00 AM GMT and 77 AM Geneva time.

[Other language spoken]

I don't know if you want to add something, Paul or Doctor Kituyi, just to say, just to say if I could, just to follow on a little bit, just to say if I could that this report and the index identifying the categories and areas where.

LDC's need more support to build their productive capacity.

Isn't isn't effect a way of identifying where the international support can focus on?

And as we mentioned in this report, it's quite clear that the international measures need to be strengthened and they haven't achieved what they needed to be achieved.

But this gives us an opportunity to focus what exists in the international support measures into those particular specific categories, which will better serve the LDCs and help them build their productive capacity to have greater resilience to future shocks and to come out of this COVID crisis.

Thank you for thank you very much, Paul, for for closing this press conference.

I think we're going to stop here.

[Other language spoken]

Nevertheless, the, the team who prepared this report is available.

We still have two days ahead of us.

So please don't hesitate to come back to us for any clarification and see you soon for other studies made by by Uncut.

Thank you very much to all.

Have a nice afternoon talk to you.

[Other language spoken]

Thank you very much.

[Other language spoken]