Anti-poverty Campaign
LDCs Fail To Reap Benefits

By Laxmi Bahadur Vaidya

THE last decade of 20th century was a period of major disappointment for the least developed countries as a while due to enormous economic disparity, unfair trade, debt and other socio-economic problems. In addition, the global population increased rapidly, while health and education standards declined and environment depleted seriously causing natural calamities such as droughts, floods and cyclones, and other economic hardships. Consequently the plight for the least developed countries aggravated enormously and marginalised even further within the World economy.

The United Nations has classified 49 poorest among the poor countries of the world with a total population of 630 million as officially "least developed". The present criteria of the least developed countries include a per capita income of less than $ 900 a year and scarce investment in health, nutrition and education including economic vulnerability. More than half of the 630 million people of these poorest countries are concentrated in sub-Saharan Africa and Southeast Asia but also caribbean and pacific island nations. They live on less than a dollar a day. In these countries rapid population growth rates have contributed significantly in increasing the number of people living below the poverty-line. It is estimated that over a fifth of the World’s population, that is, 1.3 billion people are living in poverty.

The United Nations Third Conference on least developed countries that was concluded in Brussels, Belgium recently in which leaders from the Worlds 49 least developed countries as well as leaders from the developed world were present. In that conference the representatives of donor nations and top business leaders, governmental organisations had participated. The conference was the most important world jamborce of the least developed countries. The first and second conference and taken place in 1981 and 1990 respectively, both at Paris in the French Capital.

The Third conference has reached an agreement to reduce poverty and to enhance the economic growth rate of least developed countries, in addition to bridging the gap of inequality between the least developed countries and the developed world.

When the least developed country was first defined in 1971, in this group, there were only 25 nations. Now, it is a bloated club of 49 members with a new member senegal.

Most of the least developed countries’ economic structure is extermely weak and poverty is very grave. The fragile economic structure of the least developed countries creates major problems for the design of structural development programmes. So one of the most important necessities of the least developed countries is the considerable adjustment and reshaping of the economic structure to ensure growth-oriented and to accelerate long-term development. Thus the structural development programmes should be supportive of the least developed countries’ long-term endeavours. These countries are unable to fulfill such aims, objectives and plans due to the paucity of resources which is a great constraint on development of least developed countries.

Resource constraint and the problems arising from the rapid growth in population, degradation in natural environment and the massive build-up of debt as a tremendous burden, that have had their negative impact on savings, investment and development activities in all sectors of the least developed countries. But the crux of the matter is that least developed countries by themselves are not capable to escape out of poverty without an adequate aid and healthy support from the rich countries of the World. During the 1990s international asistance and support has been inadequate. As a result it has affected infrastructural development of the least developed countries because they depend primarily on external resources to finance such investment.

The financial flows to least developed countries have fallen in real terms since 1980s. The second UN-LDC Conference was concluded in 1990 in Paris. In that conference the developed countries had made commitment to channel at least 0.15 per cent of their GNP to the least developed countries in the form of Official Development Assistance (ODA). But most of the developed countries have failed to fulfill that commitment. That is why the ODA target of 0.15 per cent of GNP was not achieved. And the donors have contributed only 0.15 per cent of their GNP in 1997 which is lower than 0.09 per cent of GNP in 1990. At the same time least developed countries resource needs grew substantially as their export earnings and purchasing power declined. But debt repayment obligations ex-acerbated and additional financial requirements for the performance of development activities immensely grew up. The total external debt stock of least developed countries went up from $121.2 billion in 1990 to $ 150.4 billion in 1998, registering a corresponding increase in debt stock to GNP ratio from 92 per cent to 101 per cent.

A Week-long Third United Nations global conference on least developed countries ended recently in Brussels. The conference came to the conclusion that traditional development plans and past experiences have suggested that the developed countries have failed to uplift poorer economies from poverty, but actually led to further deterioration. And the income gap between least developed countries and the developed World is widening.

The conference adopted a decade-long programme of Action for the least developed countries beginning from 2001, aimed to integrate trade into the poverty alleviation strategies of least developed countries with high aims of accelerating the development process in the third World, which so far has remained marginalised in the global context. The meet, among others, also intended to help to facilitate entry of non-member least developed countries into the World Trade Organisation. Now stress has shifted from direct aid in the past to more favourable trade as means by which poverty alleviation, strategies, could be made more sustainable, and by which it could help in lifting the economic status of the poor people living in the least developed countries. Large amount of aid have only encouraged aid dependency just like Nepal.

Prominent economists, development planners and policy-makers are of the view that unless the debt of Highly Indebted poor countries are not cancelled and special as well as preferential treatment upon them will not be provided, which is recognised by even the Murrakesh Declaration, poverty alleviation targets can never be achieved. In this context the conference has acknowledged on the need to expand the Highly-Indebted poor countries. The political declaration that was adopted in Brussels says, "We believe that the financing and implementation of the enhanced HIPC initiative is essentially for freeing domestic budgetary resources for poverty reduction".

Though Nepal suffers a crushing burden of debt servicing which wipes away one-third of its internal revenue mobilisation, the Brussels Declaration has rejected the benefits of the cologne debt relief initiatives and landlockedness which are the two of its unique problems.

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