The Institute for Domestic and International Affairs, Inc.
United Nations Conference
on Trade and Development
Landlocked Development Countries
Director: Breanna Long
© 2008 Institute for Domestic & International Affairs, Inc. (IDIA)
This document is solely for use in preparation for Rutgers Model
United Nations 2008. Use for other purposes is not permitted
without the express written consent of IDIA. For more
information, please write us at [email protected]
Policy Dilemma ______________________________________________________________ 1
Chronology __________________________________________________________________ 3
20 February 1957: UN Resolution 1028________________________________________________ 3
9 October 1962: Independence for Uganda_____________________________________________ 3
7 June 1965: The UN Convention on Transit Trade of LLS _______________________________ 4
10 December 1982: Ratification of UNCLOS ___________________________________________ 5
1 January 1995: Establishment of WTO _______________________________________________ 5
2001: Worsening Economic Conditions _______________________________________________ 6
25-29 August 2003: Almaty Conference _______________________________________________ 6
10 August 2005: Meeting of Ministers of LLDCs ________________________________________ 7
April 2006: Statistics Published Regarding LLDCs______________________________________ 7
Actors and Interests ___________________________________________________________ 8
Least Developed LLDCs ____________________________________________________________ 8
Other LLDCs _____________________________________________________________________ 9
Transit States ____________________________________________________________________ 11
Developed States _________________________________________________________________ 12
Possible Causes _____________________________________________________________ 14
Burdens of Border-Crossing________________________________________________________ 14
Infrastructure Deficiencies _________________________________________________________ 15
Resources _______________________________________________________________________ 16
Conclusions of Causes _____________________________________________________________ 17
Projections _________________________________________________________________ 18
Conclusion _________________________________________________________________ 19
Discussion Questions _________________________________________________________ 21
Works Cited ________________________________________________________________ 23
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Policy Dilemma
Landlocked developing countries (LLDCs) face severe economic challenges that
result largely from their geographic locations. The primary problem facing LLDCs is
their lack of national access to a coast, which obstructs their involvement in trade and the
economic development that results from it. Currently, there are thirty-one states that the
United Nations recognizes as LLDCs: fifteen in Africa, twelve in Asia, two in Latin
America, and two in Central and Eastern Europe.1 Although clear-cut geography plays a
significant role in the disadvantages LLDCs face, the problem is more intricate than that.
Problems of inefficient transit systems, underdeveloped neighboring countries, and the
excessively high costs of exports—due to prolonged transit and customs and tariff
regulations at transit countries’ borders—restrict access to international markets. The
problem, then, becomes cyclical: high costs lead to low exports, which leads to no viable
competitiveness in the global market and very little incoming trade revenue—and, thus,
the continuation of underdevelopment and economic ineptness.
Constructing a policy to deal with problems that LLDCs face is particularly
difficult, since the nature of the problem necessitates international cooperation.
Improving infrastructure, for example, is not only necessary within the LLDCs
themselves, but often also within neighboring transit states. Furthermore, LLDCs are
subject to other countries’ customs and border regulations, further complicating the
matter. Beyond the problem of international dependency, LLDCs lack the economic
resources that would enable them to begin to address the problem themselves. Although
the United Nations (UN) has put forth and passed various resolutions, implementation
remains shaky and LLDCs’ problems of physical and economic remoteness persist.
Clearly, the difficulties facing LLDCs have important global and political
implications. Without access to the global market and cut off from participation in
international trade, LLDCs are unlikely to undergo significant economic development or
1
UNCTAD, “UN recognition of the problems of land-locked developing countries,” UNCTAD,
http://unctad.org/Templates/Page.asp?intItemID=3619&lang=1 (accessed February 4, 2008).
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poverty reduction. Of the thirty-one LLDCs, sixteen are currently classified as Least
Developed Countries (LDCs), which are those states facing the most extreme and dire
developmental issues.2 If the international community seeks to improve conditions for
the world’s poorest populations, it is clear that addressing the special needs of LLDCs is
necessary. Furthermore, dealing with the issues that LLDCs face is crucial to honoring
UN commitments to decreasing global poverty and building a partnership for global
development as expressed in the Millennium Development Goals (MDGs).
With such significant impacts on the global stage, various solutions aimed at
accelerating the economic integration of LLDCs have been proposed and popularized.
What seems to be the most widely recognized solution is the improvement of internal
infrastructure, as the development of efficient transit systems, including roads, railways,
and waterways, would significantly lower transit costs; this, however, is obviously
expensive in construction and maintenance.
Another solution exists in improving
policies at border-crossing points to decrease costly delays in transport, through clearly
established agreements, expanded technological development, and the use of
management information systems.3 Increasing regional trade may also help resolve the
problem; if LLDCs become transit countries through which maritime countries’ goods
must travel, it is likely that the improvement of their transit systems and freer access
between neighbor states will become more pressing political concerns.
The
encouragement of foreign direct investment (FDI) is yet another solution often advocated.
If external, economically developed countries’ businesses invest in branches in LLDCs, it
is believed that economic growth will result and fuel further development. Finally, and
controversially, preferential treatment for landlocked states in international maritime law
is sometimes called for.4
2
United Nations, “Landlocked Developing Countries,” United Nations, http://www.un.org/specialrep/ohrlls/lldc/default.htm (accessed February 4, 2008).
3
UNCTAD, “Challenges and Opportunities for Further Improving the Transit Systems and Economic Development
of Landlocked and Transit Developing Countries,” UNCTAD, http://unctad.org/en/docs/tdbldcac1d19_en.pdf
(accessed February 4, 2008).
4
S.C. Vascianne, Landlocked and Geographically Disadvantaged States in the Law of the Sea, (Oxford: Clarendon
Press, 1990).
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Chronology
20 February 1957: UN Resolution 1028
In 1957, the United Nations General Assembly passed Resolution 1028 (XI), the
first resolution to address the specific problems facing LLDCs. At the time of the
resolution, there were only six landlocked developing states in existence: Bolivia,
Paraguay, Afghanistan, Bhutan, Lao People’s Democratic Republic, and Nepal.5 The
document, although brief and mildly worded, asked the governments of member states to
“give full recognition to the needs of land-locked Member states” and “accord them
adequate facilities in terms of international law and practice.”6
Furthermore, the
resolution recognized the need to develop adequate transit infrastructure in order to
facilitate international trade.
9 October 1962: Independence for Uganda
While this specific date marks the independence of just one particular state,
Uganda, it is representative of the time period’s larger movement of African colonies
towards independence, resulting in a large “post-1958 increase in the number of
landlocked nations.”7 In the late 1950s and early 1960s, various colonies gained their
independence from European powers, specifically Great Britain, France, and Belgium.
Significantly, the end of colonialism in Africa had a huge impact on the plight of LLDCs.
A majority of these newly independent nations had “enjoyed better access to the sea
under their colonial overlords;” regional fragmentation resulted from the “pressures of
independence” and caused a huge impediment to access to the sea and resulting economic
growth.8 (While unrelated to the specific impact of colonialism on LLDCs, a similar
situation would occur decades later, with the creation of new LLDCs following the
breakup of the Soviet Union.) Major state dissolutions or movements for independence
5
Chowdhury, Anwrul K and Sandagjorj Erdenebileg, Geography Against Development: A Case for Landlocked
Developing Countries,( UN-OHRLLS, New York: 2006), iii
6
http://daccessdds.un.org/doc/RESOLUTION/GEN/NR0/340/32/IMG/NR034032.pdf?OpenElement
7
Samuel Pyeatt Menefee, ““The Oar of Odysseus”: Landlocked and “Geographically Disadvantaged” States in
Historical Perspective,” California Western International Law Journal, 23, no. 1 (1992-3). WilsonWeb, via Hein
Online, http://www.hwwilson.com/
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had increased the number of LLDCs from the meager six in 1957 to twenty-three in
attendance at the Convention on Transit Trade in 1965, setting the stage for the necessity
of international action.9
7 June 1965: The UN Convention on Transit Trade of LLS
In 1965, the United Nations Convention on Transit Trade of Land-Locked States,
the first conference ever organized under UNCTAD, was held in New York.10 There,
serious disagreements took place regarding the scope of the problem, and what should be
done to help LLDCs escape their geographic disadvantage.
The United States, for
instance, had little interest in the issue, as it is neither an LLDC nor transit state. Even
among landlocked states, there was no consensus. Many landlocked states in Europe,
being themselves economically stable and surrounded by developed countries, did not
and still do not face the same problems that many developing countries without access to
a coast do. Furthermore, the positions of the transit states varied greatly; transit states
with agreeable relations with their LLDC neighbors were more conciliatory than those
with hostile relations.
This, of course, underscores another important obstacle for
LLDCs: the vagaries of their relations with the states on whom they depend.
On the whole, although all states recognized and were beginning to address the
problem of being landlocked for developing economies, those states that did not face the
problem themselves did not want to make the economic or sovereign concessions
necessary to assist LLDCs gain freer access to global trade.11 The Convention did,
however, adopt an important document, whose preamble clearly states a principle that
highlights the importance of access to the sea for development: “The recognition of the
right of each land-locked State of free access to the sea is an essential principle for the
expansion of international trade and economic development.”12 While it was a noble
attempt to address the problem and international law surrounding it, the document was
8
Ibid
Kishnor, 444
10
Glassner, 35
11
Ibid, 37
12
Ibid, 17
9
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not ratified by nearly as many coastal states as was originally hoped.13
10 December 1982: Ratification of UNCLOS
On this date, the United Nations Convention on the Law of the Sea III (UNCLOS),
the latest international document regarding international maritime law, opened for
ratification.
Since the Barcelona Conventions in 1921, the question of whether
landlocked states had the right of coastal access had been long debated on the
international level. UNCLOS III sought to firmly establish this right, stating, “landlocked states shall enjoy freedom of transit through the territory of transit states by all
means of transport.”14 UNCLOS was intended to address and replace a number of older
treaties, including a document from an earlier UNCLOS convention. Despite this newest
declaration, though, freedom of transit has continued to be “notional rather than real” and
“LLDCs have had to rely on the political good will” of their neighbors for real access to
world markets.15 A long history of legal framework for cooperation and development
exists, but has not, to date, been successfully implemented to the advantage of LLDCs.
1 January 1995: Establishment of WTO
Perhaps the most significant sign of globalization and the increasing importance of
international trade and global participation to economic success, the establishment of the
World Trade Organization (WTO) in 1995, holds particular significance for LLDCs. The
establishment of the organization highlights the increased importance of world trade to
economic well being in modern times. In an era in which expanding technology and
transit has allowed for the world to become more interconnected and world trade to move
to the forefront, the weak financial position and inaccessibility of LLDCs has further
marginalized their economies. On the other hand, the WTO is also an important tool for
LLDCs, which may fall under special provisions in trade negotiations.
13
14
15
Menefee, 63
Chowdhury and Erdenebileg, 121
Ibid, 141
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2001: Worsening Economic Conditions
Indicative of the worsening economic conditions in LLDCs and their overall lack
of participation in international trade, the number of exports from LLDCs showed a
downward trend throughout the 1990s. A comparison of statistics from 1990 to 2001
shows that the share of world exports in twenty-nine of thirty-one LLDCs dropped or
remained at a standstill throughout the decade.16
The two exceptions to this were
Azerbaijan and Kazakhstan.
25-29 August 2003: Almaty Conference
The International Ministerial Conference of Landlocked and Transit Developing
Countries and Donor Countries and International Financial and Development Institutions
on Transit Transport Cooperation, more commonly called the Almaty Conference, was
held in Almaty, Kazakhstan. The conference, as the UN says, was “a unique opportunity
to galvanize international solidarity and partnership to assist landlocked developing
countries to effectively participate in the international trading system.”17 To achieve this
end, the outcome of the conference was the endorsement of the Almaty Programme of
Action.
Bearing the interests of both landlocked and transit countries in mind, the
Programme stresses the importance of forging partnerships and establishing an
international framework to create and improve infrastructure and transit systems.
The Programme addresses five specific areas to be given priority.18 The first of
these areas is basic transit policy, which can be improved, the Programme suggests,
through the use of new information technology, and increased transparency in border
control procedures. The second area is infrastructure reform, which entails development
and maintenance of roadways and railways, as appropriate for the specific state. Third,
the Programme calls for measures to increase international trade. Not only does this call
for the global market to pay extra attention to goods from LLDCs, granting them
preferential treatment, but also seeks to facilitate trade through avoidance of unnecessary
16
Ibid, 36
United Nations, “Landlocked Developing Countries,” United Nations, http://www.un.org/specialrep/ohrlls/lldc/default.htm
17
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costs related to extensive documentation requirements or bank transactions. Furthermore,
this priority addresses the need to incorporate all LLDCs into the WTO, which will help
them by “ensuring enhanced and predictable access to all markets.”19 The fourth priority
stresses the need for international assistance, through monetary loans and investment, as
well as technical assistance and knowledge sharing. Finally, the Almaty Programme calls
for effective implementation of its provisions through annual review by the General
Assembly.
10 August 2005: Meeting of Ministers of LLDCs
At the Meeting of the Ministers of LLDCs Responsible for Trade, held in
Paraguay, the ministers adopted the Asunción Platform for the Doha Development Round
of WTO negotiations.20 Although various resolutions had been proposed or passed at
other international conferences, the need for action and assistance persisted. Reaffirming
many of the conclusions and re-endorsing many of the suggestions made in the Almaty
Programme, the platform’s purpose, UNCTAD says, was to “harmonize the positions of
LLDCs in the current round of multilateral trade negotiations.”21 The LLDCs involved
used this platform to bring their struggle to the attention of the WTO, urging the current
round of negotiations to address their specific needs and the more expedient integration
of all LLDCs into the WTO.
April 2006: Statistics Published Regarding LLDCs
Despite these various international resolutions, development in these states
remains quite stagnant, as evidenced by statistics published in April 2006. Perhaps one
of the clearest indications of the problems facing LLDCs, the average life expectancy has
stood virtually still over the past three decades, at 46.1 years in the 1970s and only 46.9
18
Chowdhury and Erdenebileg, 147
Ibid, 148
20
“Asuncion Platform for the Doha Development Round,” UNCTAD,
http://www.unctad.org/en/docs//a60d308_en.pdf
21
“UN recognition of the problems of land-locked developing countries,” UNCTAD,
http://www.unctad.org/Templates/Page.asp?intItemID=3619&lang=1
19
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years today.22 Beyond this, economic growth has not budged for LLDCs, with their
average national debt growing.
The mean debt-to-Gross Domestic Product ratio in
LLDCs hovers at an astounding 77 per cent, the reasons for which include “inconsistent
implementation of policy reforms” as well as “factors such as worsening terms of trade
and protectionist policies.”23
Clearly, previous attempts at resolving the problem have
fallen short, and further action is necessary.
Actors and Interests
Least Developed LLDCs
Although all LLDCs face similar problems, the degree to which these problems
affect them varies from state to state. Some landlocked states, for example, are not even
classified as LLDCs; most of these are in Europe, having benefited from their developed
neighbors and the common trade policy the European Union (EU) provides. Even among
LLDCs, though, there are varying degrees of severity. About half—sixteen of thirtyone—of LLDCs are also LDCs, facing the worst of all development conditions, and
eleven of these sixteen are located in Africa.24 The interests and motivations of least
developed LLDCS are clear: they want to become participants in international trade in
order to improve their economies and raise standards of living.
There are many reasons why some LLDCs have fared better than others, and
policy must reflect the different demands of different nations. Primary reasons for doing
particularly badly are geography—not necessarily distance from the sea, but whether or
not they are in a high conflict area, climate of the region, and relationship with their
neighbors—and available resources.
Countries in Central and Western Africa, for
example, suffer greatly from the conflict their geography immerses them in, which has
damaged much of their infrastructure and closes borders to rigorous and time-consuming
22
Chowdhury and Erdenebileg, 17
Ibid, 13
24
“List of Landlocked Developing Countries,” United Nations, http://www.un.org/special-rep/ohrlls/lldc/list.htm
(accessed February 12, 2008).
23
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security inspections.25 For these countries, establishing agreements to make crossing
borders easier and to create regional networks of trade is an imperative first step.
Improving transit systems is also of extreme importance.
Many nations suffer particularly badly because of the resources they have to offer.
Often, LLDCs rely on one or a very small number of products to export. Particularly,
those countries that lack highly valuable resources must seek to diversify their tradable
commodities or services. Technology can be useful in this aspect, leading to trade in
“semi-skilled activities that can be transferred electronically.”26
Although it is a
promising prospect, service trade relies on the development of technology, which in turn
often relies on foreign investment or donations.
Investing in better technology, negotiating with adjacent transit states, and seeking
trade agreements are all popular solutions among LLDCs. Without much leverage and
highly dependent on other nations to help develop their economies, though, least
developed LLDCs are certainly not in a good spot. With policy improvements, however,
regional integration is possible. Trading with neighbors, even if not overseas, can help to
develop the economies of LLDCs and make their interior geographic location
advantageous as a cross-hub for regional trade. This, certainly, would give them greater
leverage in border and port negotiations, eventually allowing increased access to world
markets.
Other LLDCs
Although the rest of the LLDCs are not classified as LDCs, they still face very
troubling economic situations and trade barriers that the international community must
address. Some countries, like Zambia, Swaziland, and Uganda, have managed to escape
the demarcation of LDC through the value of their exports.27 Botswana, for example, has
been helped by the high value of its primary resource, diamonds. This resource has
25
Chowdhury and Erdenebilegh, 68
UNCTAD, “Challenges and Opportunities For Further Improving the Transit Systems and Economic
Development of Landlocked and Transit Developing Countries,” UNCTAD,
http://unctad.org/en/docs/tdbldcac1d19_en.pdf (accessed February 13, 2008).
27
Uprety Kishnor, “Landlocked States and Access to the Sea: An Evolutionary Study of a Contested Right,”
26
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allowed Botswana to overcome one of the major obstacles of landlockedness through the
use of air, rather than rail or road, transport.28 For states like Botswana, with high value
commodities, or landlocked states whose neighbors have advanced infrastructure, the
need for transit improvements is not pressing.
Other countries have shown significant progress in some areas, but still struggle to
fully integrate into the world economy.
South America’s two LLDCs, Bolivia and
Paraguay, have secured substantial regional agreements that have helped to facilitate their
trade participation, the most important of which is the Latin America Integration
Association (ALADI).
ALADI has enabled these two LLDCs to sign many trade
agreements with transit and coastal neighbors, creating more stable access to the sea, as
well as eliminating or reducing tariffs on a number of goods.29
Even with these
advantages, though, Bolivia and Paraguay, as well as other LLDCs involved in regional
agreements, remain disadvantaged and in the midst of development. Policy for them,
then, focuses less on how to create regional trade networks and more on improving
physical infrastructure and technology development.
Enhanced Information and
Communication Technology (ICT), for example, can speed up border crossings and help
these countries keep track of shipped goods.
The policy preferences of most of these LLDCs, then, depend on their unique
situations, but the potential outcome for these states is somewhat better than it is for their
least developed peers. As many already participate in regional agreements, the adoption
of new policies, particularly technological advances, can spur continued growth and
development, with the model of prosperous European landlocked countries in mind. For
these states, integration into the world economy seems less daunting and may be
attainable more quickly.
28
Michael L. Faye, John W. McArthur, Jeffrey D. Sachs, and Thomas Snow, “The Challenges Facing Landlocked
Developing Countries,” Journal of Human Development, 5, no. 1 (2004). Academic Search Premier, via
EBSCOhost, http://web.ebscohost.com/ehost/pdf?vid=6&hid=9&sid=5f883bcb-ce64-469e-af5f0757815ecbbd%40sessionmgr7
29
Chowdhury and Erdenebileg, 109
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Transit States
Transit states have a unique stake in the policies surrounding LLDCs. Primarily, it
is notable that many transit states are themselves developing, especially in Africa, and
would benefit significantly from the development of their landlocked neighbors. Some of
these benefits include a “pickup in business, more port charges, and infrastructure
developments.”30 The mutual benefits of cooperation can be seen, in one instance, in
Bangladesh. An underdeveloped transit country, Bangladesh has, in recent years, had
many new jobs open up at its ports after it allowed its landlocked neighbors, Nepal and
Bhutan, easier access to its coast.31 Another startling example of the benefits transit states
stand to gain is obvious is Djibouti, a transit country that signed a port agreement with
Ethiopia (an LLDC) in 2002. Now, Ethiopian transit trade accounts for 70 per cent of
Djibouti’s port income.32 The situation, though, is not always so simple, “considering
that the transit countries […] must export as much as they can,” and that their products
are often the same as those exported by their neighboring LLDCs.33 Competition, then,
can make unlimited access to ports unfeasible.
Although transit states may be willing to compromise, they often seek bilateral
agreements, rather than multilateral or regional negotiations. With the upper hand in the
situation, as they have access to the coast, transit states have traditionally had more
leverage in negotiating bilateral agreements.34
Believing that they can “gain a
competitive advantage through skillful negotiations,” transit states are sometimes hesitant
to liberalize transit traffic.35 Although many are now beginning to realize that bilateral
agreements are frequently time-consuming and inefficient, the fact highlights an
important point: transit states do not want to compromise their sovereignty by completely
30
Jonas Hagen, “Trade Routes for Landlocked Countries,” UN Chronicle, 40, no. 4 (2004). Academic Search
Premier, via Wilson Web, http://web.ebscohost.com/ehost/pdf?vid=2&hid=22&sid=a7a27cb7-ddba-4446-93542bc1bb91ed6b%40sessionmgr8
31
Ibid
32
Chowdhury and Erdenebileg, 67
33
Hagen
34
Chowdhury and Erdenebileg, 141
35
UNCTAD, “Regional Cooperation in Transit Transport: Solutions for landlocked and transit developing
countries,” UNCTAD, http://unctad.org/en/docs/c3em30d2_en.pdf (accessed February 11, 2008).
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opening up borders to LLDCs. In a similar vein, transit states are also concerned about
maintaining border security while loosening trade barriers. As lengthy administrative
procedures and customs are significant financial burdens for LLDCs, causing costly
delays and extra expenses, this is an area for potential compromise. For transit states,
though, these solutions must be weighed with care: in some of the Third World, customs
duties can account for up to half of governmental revenue.36 An appropriate balance must
be struck; eliminating unfair fees, harmonizing hours and procedures, and regularizing
documentation requirements are all contributing solutions for LLDCs that rely on and
deeply affect their transit neighbors.37
Beyond this, transit states would be major beneficiaries of improvements in
infrastructure aimed at helping LLDCs. In order to get their goods to the sea, landlocked
countries need their neighbors’ transit systems built up just as much as they need their
own improved. Not only would this facilitate transportation within the transit states, it
would also open them up to freer trade with their LLDC neighbors. A new market for
exports and a new source of imports thus emerges. Clearly, then, transit states face many
considerations and have a crucial stake in the policies adopted towards LLDCs.
Optimally, transit states would like to reap the benefits of an integrated trade network,
through both physical and nonphysical infrastructure developments that protect their
security and sovereignty.
Although potential for more leverage exists in bilateral
negotiations with LLDCs, multilateral agreements can allow for even more port revenue
and stable regional trade.
Developed States
Developed states already have the infrastructure and accessibility that enables
participation in global trade. Today, they are important trading partners of LLDCs, but
their interaction has fallen in recent years. From 1993-2003, the percentage of imports to
36
Beverly May Carl, Economic Integration Among Developing Nations, (New York: Praeger Publishers, 1986), 28.
Jean Francois Arvis, “Transit and the Special Case of Landlocked Countries” in Customs Modernization
Handbook, ed. Luc de Wulf and Jose B. Sokol (Washington, D.C.: World Bank, 2005).
http://www.worldbank.org/transport/learning/learning%20week/trade_facil_2005/Useful%20Database%20and%20
Guidelines/World%20Bank%20(2005a)%20Customs%20Mondernization%20Handbook.pdf#page=269
37
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LLDCs coming from developed countries dropped from 45 to 33 per cent.38
As
prosperous members of the international community, it may seem like these nations have
little at stake in the development of LLDCs, but this is not true. Opening LLDCs up to
the global market through policy and infrastructure developments not only gives the
feeble economies access to international trade, but it also has advantages for nations
already trading. In the era of globalization, the potential for new markets for First World
products exists in LLDCs. Furthermore, increasing the accessibility of LLDCs gives
developed countries access to new and coveted resources. This is especially significant
because oil is the “single most important category” of exports in LLDCs, accounting for
42 per cent of all exports from LLDCs in 2002.39 And, although all LLDCs do not export
oil, many are rich in other natural resources, including minerals and precious stones,
desired by developed states.
Although there are certainly potential gains for developed states, many of the
proposed solutions rely on their cooperation. Financial and technical aid from donor
countries—which, at the Almaty Conference included the United States, Japan, and the
European Union, among others—is necessary to carry out policies aimed at helping
LLDCs.40 At the conference, these countries expressed strong support for the Almaty
Programme, which includes wide-ranging provisions for reform. Furthermore, working
to increase inflows of FDI, coming from businesses in the developed world, is an oftenproposed solution that has great potential to affect developed nations’ economies.
Developed nations clearly play a key role in helping LLDCs overcome the geographic
and economic obstacles they face. They are willing to help, through investment and aid,
with the optimal outcome involving a return on their investments. While they recognize
the responsibility the developed world has to the world’s poorest, the emergence of new
markets and the availability of new resources are especially significant motivating factors
for support and action.
38
UNCTAD, “Effective Participation of Landlocked Developing Countries in the Multilateral Trading System,”
UNCTAD, http://www.unctad.org/en/docs/ldc20053p1_en.pdf (accessed February 12, 2008).
39
Ibid
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Possible Causes
Burdens of Border-Crossing
For LLDCs, a lack of regional integration and cooperation is a huge burden and
perhaps the most significant barrier to international trade. Not only do these burdens
disrupt trade in progress, but they also tend to discourage future trade. Border crossing
procedures between LLDCs and transit states are so much trouble for a number of
reasons. First, there are direct customs costs and tariffs associated with crossing borders,
sometimes implemented unfairly. For example, when LLDCs’ goods enter a transit
state’s borders, there are often customs guarantees they must pay, which are supposed to
be reimbursed when the goods leave the country. Although there is a risk for transit
states that necessitates these customs guarantees, they are often more expensive than the
true cost of transit goods.41 Then, reimbursement of these costs is often “unjustifiably
long and costly,” ultimately burdening the LLDC.42 More significant than the issue of
fixed tariffs and customs costs, though, is the burden that lengthy “bureaucratic
procedures” place on LLDCs.43 When states are not engaged in regional agreements,
there are no standard paperwork and documentation requirements—a situation that often
results in very slow border-crossings. To better understand the extent and effect of this, it
is useful to know that for countries in the Commonwealth of Independent Nations, the
average border-crossing time is measured in days, while in Europe, it is about thirty to
forty minutes.44 One notable exception to this problem exists in Bhutan, a state whose
own customs handles trade traffic through India.45 This, however, is very rare, and only
occurs because of particularly strong relations between the two nations.
Moreover, LLDCs are subject to the vagaries of their relations with transit states.
If they happen to be in conflict with a neighboring transit state, the transit state may
40
Hagen
Chowdhury and Erdenebileg, 27
42
Ibid
43
Faye, 47
44
UNCTAD, “Challenges and Opportunities For Further Improving the Transit Systems and Economic
Development of Landlocked and Transit Developing Countries”
45
Faye, 49
41
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subject them to border obstructions and other obstacles to trade.46 Although this does not
affect all countries, it once again underscores the advantage that transit states have in
negotiations. Furthermore, corruption and a lack of transparency in border procedures
hinder trade. Beyond problems of smuggled goods leaking to markets, in some countries,
like Armenia and Azerbaijan, weak political institutions result in widespread bribe paying
to cross borders.47 The effects of administrative burdens and regional disintegration are
often stressed by LLDCs and played down by transit states, who maintain that they, too,
are economically disadvantaged and, like any country does, have their own agendas. The
fault, however, does not all lie with the transit states; LLDCs themselves have the
problems of untrained customs officials, unclear procedures, and even different hours of
operation at border crossing-points than their transit neighbors.
Infrastructure Deficiencies
Related to the problems with border crossing is the problem of weak
infrastructure. Both inefficient transit and communication systems in LLDCs serve as a
significant impediment to trade. It is important to note that there are various causes for
the existence of weak transportation infrastructure, including “lack of resources, misgovernance,” as well as “conflict and natural disasters” that may have damaged systems.48
Furthermore, most LLDCs are rural, with little to no urbanization. The problem that a
lack of efficient transportation causes is clear: goods cannot even get world markets
without roads and rails to get them to ports. Infrastructure deficiencies plague both
LLDCs and transit states.
Some states, like Burundi, have relatively good internal
structures, but cannot gain access to the coast because of their neighbors’ inefficient
systems.
Other states face the reverse situation; Laos, for example, cannot take
advantage of neighboring Thailand’s advanced transit system because it has no internal
network to connect to it.49
46
47
48
49
Chowdhury and Erdenebileg, 26
Faye, 65
Ibid, 44
Ibid, 45
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Not only are there inefficiencies in transit systems, but also in technological
infrastructure that could facilitate trade.
Clearly, developing states all lack the
communication technology of the First World, but LLDCs are also significantly trailing
behind their developing peers; even transit developing states outspend LLDCs by a ratio
of ninety-six to one on Information Technology (IT).50
Developed by UNCTAD,
Automated System for Customs Data (ASYCUDA) is an example of IT that has been
successfully implemented in developing countries.51 A further increase in IT can help to
speed up trade and keep track of goods, which increases transparency and decreases the
likelihood of smuggling. Overall, the connection between inefficient infrastructure, high
transport costs, and the problem of economic underdevelopment that LLDCs face is
widely recognized, but dealing with it is difficult.
Building transportation and
communication infrastructure is very expensive, and LLDCs have little money to spare;
thus, they are often dependent on donor countries. Improvements, then, are not always
based on need, but “political expediency, donor preferences, and […] likelihood of
measurable success.”52
Resources
Yet another issue that obstructs LLDCs’ participation in international trade is their
available resources. This problem manifests itself in two areas: a lack of people and of
exportable goods.
First, LLDCs lack the economic resources to support sufficient
productive capacities or an adequate domestic market for trade. LLDCs’ small (and
poor) populations lead to a lack of internal demand for goods, without which they
“cannot benefit from economies of scale,” making goods’ costs higher.53 This, combined
with the high transit costs they face, makes adequate external trading even more
implausible. In addition to the lack of manpower, LLDCs have few resources to offer. In
fact, half of LLDCs depend on only commodity for 50 per cent or more of their total
50
Chowdhury, 29
Arvis, 253
52
David Simon, Transport and Development in the Third World, (London: Routledge, 1996), 91
53
UNCTAD, “Challenges and Opportunities For Further Improving the Transit Systems and Economic
Development of Landlocked and Transit Developing Countries”
51
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exports, and two commodities for three-quarters.54 Most LLDCs, especially those in
Africa, rely on agricultural products for trade. These, however, are heavily sensitive to
climactic changes, and are thus unstable and have “highly volatile” growth patterns.55
Although various developing countries face the problem of insufficient resources,
it is particularly harmful to landlocked states because of their underdeveloped
infrastructure and long distance from the sea, which makes trading large goods very
expensive. So, while some LLDCs have desirable natural resources, like oil or gems,
trading them is very dependent on good transit. In response, developed countries tend to
stress the point that LLDCs offer mainly primary commodities and do not trade services.
These are often more desirable than agricultural products and, more importantly, are
unaffected by LLDCs’ distance from the sea. The problem of insufficient technology,
however, resurfaces, as LLDCs have neither the money nor technological resources to
become effective service providers.
Conclusions of Causes
Although the problem facing landlocked developing countries may seem obvious,
there are many nuances to their geographic disadvantage. If distance from the sea were
the only concern, it would be expected that the inland regions of China or Russia—which
are farther from a coast than some LLDCs are—face the same economic and
developmental difficulties; this, however, is not true.56 The difference is attributable to
preexisting economic restraints in LLDCs, their weak infrastructure, and their
dependence on other countries for access to the sea.
These factors are clearly
interconnected, one leading to or exacerbating the others.
The high cost of transporting goods to the sea to gain access to world markets is
unbearable for LLDCs; in trying to export its goods to the world market, the median
landlocked state faces 50 per cent higher transport costs than the median coastal state
54
Ibid, 4
“Effective Participation of Landlocked Developing Countries in the Multilateral Trading System,”
56
“The Challenges Facing Landlocked Developing Countries”
http://web.ebscohost.com/ehost/pdf?vid=2&hid=12&sid=d3dc1351-a1fa-4d7f-ac42-3476584aad7e%40sessionmgr7
55
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does.57 All three of the causes listed—the burdens of border crossing, infrastructural
deficiencies, and a lack of resources—ultimately heighten this cost.
Without the
resources to create even an internal market or attain reasonable production costs, LLDCs
cannot hope to produce products at a competitive rate. Moreover, the lack of technology
pre-empts the trade of services, the only way to engage in global trade while avoiding the
problems that deficiencies in transportation have created.
Furthermore, even if the
LLDCs could transcend their economic handicaps to create perfectly functioning
infrastructure, they would remain dependent upon their neighbors’ infrastructure and
policies. Without harmonized procedures and subject to extra costs and administrative
burdens, trade again grows implausible. Clearly, there is no easy solution to grant
LLDCs access to global markets.
Policies must be comprehensive and sustainable,
paying attention to all of the believed causes and their interactions.
Projections
As the importance of international trade has increased throughout history, the
problems facing LLDCs have grown worse. Today, in an era of expanding globalization,
the problems that confront LLDCs are certainly not going away by themselves, and will
not even be mitigated without extensive effort. Although the issue has not been entirely
ignored, as evidenced by the various UN resolutions adopted to address LLDCs’
problems, the implementation of these resolutions and plans leaves much to be desired.
If nothing is done to effectively address this dilemma, LLDCs and their developing peers
can expect severe challenges in development and human sustainability. “If current trends
continue,” it is believed that LLDCs will become, “some time in the not-too-distant
future, the most abject and impoverished members of the world community.”58
In a recent assessment of the progress LLDCs were making towards the MDGs,
only eight out of twenty-four of the LLDCs evaluated were “on track” with the goal of
halving the number of people suffering from hunger, and only seven out of thirty were on
57
UNCTAD, “Challenges and Opportunities For Further Improving the Transit Systems and Economic
Development of Landlocked and Transit Developing Countries”
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track to reduce their infant mortality rate by two-thirds.59 Clearly, one consequence of
ignoring the issues surrounding LLDCs is the failure of quite a few of the MDGs, and,
more importantly, the progress and commitment to international cooperation they
represent.
Although there are few specific projections about the future of LLDCs if nothing
is done, it is stressed that without attention LLDCs cannot hope to compete on a global
level and will be further economically isolated.
Assessments can be made best by
looking at the past. While there are signs of improvements throughout the past decade
made in, for example, human development, the coastal developing world is improving
faster, and the gap between LLDCs and the rest of the world continues to widen.60
Without proper attention, LLDCs will continue to face the compounded problems of lack
of healthcare, little education, widespread poverty, and an overall poor quality of life.
Conclusion
The problems that LLDCs must contend with are severe and require serious
attention. Since World War II, international trade has taken on increased importance,
and, although globalization has had positive effects in many parts of the world, LLDCs
have emerged as its primary victims. It is significant, then, that all states have different
interests—the developed world seeks the expansion of markets, transit states must secure
their interests and sovereignty, and LLDCs just want to harness the power of
globalization to lift themselves from their disastrous economic situations. Various causes
have created this problem, and thus affect the solutions that must be implemented. While
the root of the problem facing LLDCs is their geographic location and lack of free and
unrestricted access to a coast, this is complicated by a number of factors including
border-crossing hassles, transportation and IT deficiencies, and a lack of useful
exportable goods. Without effective solutions put into practice, LLDCs will face grave
58
Chowdhury and Erdenebileg, 4
United Nations, “Progress Towards Millennium Development Goals (LLDCs),” http://www.un.org/specialrep/ohrlls/lldc/Progress%20towards%20MDGs%20(LLDCs).pdf (accessed February 25, 2008).
60
Chowdhury and Erdenebileg, 15
59
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economic and human suffering. International cooperation, then, is imperative to
improving conditions in these states and maintaining a global commitment to world
development.
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Discussion Questions
• Is your state an LLDC or transit state? Developed country? What are your state’s
primary interests in this problem?
• Is your state classified as an LDC? What specific factors have led to such poor
economic performance, and what can the UN do to help alleviate them?
• What are your state’s primary exports? Are they attractive to external traders?
Would your state benefit from diversifying its commodities or expanding service
trade? How can this be done? Considering your state’s exports, does access to
world markets depend on a specific type of transportation? Which?
• What is the status of transit systems in your state and its surrounding states? Does
your state need improvements in transportation infrastructure? What are the
obstacles to procuring these improvements?
• Does your state tend to attract FDI? If not, why do you think this is? Is your state
even interested in garnering the attention of foreign investors?
• With which states does your state primarily deal? How cooperative are you each in
efforts to facilitate trade? Does competition between you affect potential
agreements? Is your state involved in any regional trade agreements? Have these
improved the status of trade in your state?
• Is your state in a high conflict area? Has this affected your state’s ability to trade?
• Have any measures in transit technology or customs modernization been taken to
facilitate trade at border-crossing points in your state? Have they helped? What
should non-LLDCs do to alleviate costs of transit for LLDCs? Would any of these
measures negatively affect these other states? How?
• Is smuggling a problem in your state? What can be done, in terms of technology or
government accountability and transparency, to prevent this?
• What risks do transit states face in liberalizing borders? What benefits would this
create?
• To what extent should states balance their own interests with those of the rest of
the world? Do developed countries have a moral obligation to help economically
disadvantaged states?
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For Further Reading
Chowdhury, A.K. and S. Erdenebileg. Geography Against Development: A Case for
Landlocked Developing Countries. UN-OHRLLS, New York: 2006.
Easy to read and comprehensive, Geography Against Development offers concise and clear
descriptions of the problems facing LLDCs and their potential solutions. With chapters devoted to
regional perspectives and country-specific information, the book is a great resource for committee
preparations.
Faye, M.L., J.W. McArthur, J.D. Sachs, and T. Snow. “The Challenges Facing
Landlocked Developing Countries.” Journal of Human Development 5, no. 1
(2004): 31-68.
Centered around LLDCs’ dependence on their transit neighbors, the article analyzes impediments
to trade that arise from these tricky relationships. The article enumerates four possible
problematic areas, and goes on to cite various examples, helpful in understanding your state’s
position and its relationship to that of other states.
Uprety, Kishnor. The Transit Regime for Landlocked States: International Law and
Development Perspectives. The World Bank: Washington, D.C.: 2006.
Focusing largely on international law and its historic relationship to LLDCs’ situation, the book is good
reference for understanding the legal perspectives and precedents affecting potential solutions and
resolutions.
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Works Cited
Arvis, Jean Francois. “Transit and the Special Case of Landlocked Countries” In Customs
Modernization Handbook, edited by Luc de Wulf and Jose B. Sokol, 243-264.
Washington, D.C.: World Bank, 2005.
Carl, Beverly May. Economic Integration Among Developing Nations. New York:
Praeger Publishers, 1986.
Chowdhury, A.K. and S. Erdenebileg. Geography Against Development: A Case for
Landlocked Developing Countries. UN-OHRLLS, New York: 2006.
Faye, M.L., J.W. McArthur, J.D. Sachs, and T. Snow. “The Challenges Facing
Landlocked Developing Countries.” Journal of Human Development 5, no. 1
(2004): 31-68. Academic Search Premier, via EBSCOhost,
http://web.ebscohost.com/
Glassner, Martin Ira. Access to the Sea for Developing Land-Locked States. The Hague:
Martinus Nijhoff, 1970.
Hagen, Jonas. “Trade Routes for Landlocked Countries.” UN Chronicle 40, no. 4 (2003):
13-14. Academic Search Premier, via Wilson Web, http://www.hwwilson.com/
“Landlocked Developing Countries.” United Nations. http://www.un.org/specialrep/ohrlls/lldc/default.htm
“List of Landlocked Developing Countries.” United Nations. http://www.un.org/specialrep/ohrlls/lldc/list.htm
Menefee, Samuel P. ““The Oar of Odysseus”: Landlocked and “Geographically
Disadvantaged” States in Historical Perspective.” California Western
International Law Journal 23, no. 1 (1992). WilsonWeb, via Hein Online,
http://www.hwwilson.com/
Simon, David. Transport and Development in the Third World. London: Routledge,
1996.
“UN recognition of the problems of land-locked developing countries.” UNCTAD.
http://unctad.org/Templates/Page.asp?intItemID=3619&lang=1
UNCTAD. “Challenges and Opportunities for Further Improving the Transit Systems and
Economic Development of Landlocked and Transit Developing Countries.” 13
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May 2003. UNCTAD. http://unctad.org/en/docs/tdbldcac1d19_en.pdf
UNCTAD. “Effective Participation of Landlocked Developing Countries in the
Multilateral Trading System (Part One).” 7 June 2005. UNCTAD.
http://www.unctad.org/en/docs/ldc20053p1_en.pdf
UNCTAD. “Effective Participation of Landlocked Developing Countries in the
Multilateral Trading System (Part Two).” 1 July 2005. UNCTAD.
http://unctad.org/en/docs/ldc20053p2_en.pdf
UNCTAD. “Regional Cooperation in Transit Transport: Solutions for landlocked and
transit developing countries.” UNCTAD. 10 July 2007.
http://unctad.org/en/docs/c3em30d2_en.pdf
United Nations. “Progress Towards Millennium Development Goals (LLDCs).”
http://www.un.org/specialrep/ohrlls/lldc/Progress%20towards%20MDGs%20(LLDCs).pdf
Uprety, Kishnor. “Landlocked states and access to the sea: an evolutionary study of a
contested right.” Dickinson Journal of International Law 12 (1994): 401-496.
Wilson OmniFile, via HeinOnline, http://www.heinonline.org/
Vascianne, S.C. Landlocked and Geographically Disadvantaged States in the Law of the
Sea. Oxford: Claredon Press, 1990.
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Works Consulted
Chowdhury, Anwarul K. “Development Is Not an Overnight Affair.” UN Chronicle 41,
no. 3 (2004): 38-39. Academic Search Premier, via EBSCOhost,
http://web.ebscohost.com/ehost/pdf?vid=2&hid=9&sid=df17678d-ba3a-44c69edb-324b83c8add4%40SRCSM2
United Nations. “A/60/308 Asuncion Platform for the Doha Development Round.” 29
August 2005. http://www.un.org/special-rep/ohrlls/lldc/RES60308.pdf
United Nations. “A/61/302 Report of the Secretary-General on the Implementation of the
Almaty Programme of Action: Addressing the Special Needs of Landlocked
Developing Countries within a New Global Framework for Transit Transport
Cooperation for Landlocked and Transit Developing Countries.” 8 September
2006. http://www.un.org/special-rep/ohrlls/lldc/A61302.pdf
United Nations. “A/RES/55/2 United Nations Millennium Declaration.” 18 September
2000. http://www.un.org/millennium/declaration/ares552e.pdf
United Nations. “A/RES/58/201 Almaty Programme of Action: Addressing the Special
Needs of Landlocked Developing Countries within a New Global Framework for
Transit Transport Cooperation for Landlocked and Transit Developing Countries.”
23 December 2003. http://www.un.org/special-rep/ohrlls/lldc/a-res-58-201.pdf
United Nations. “A/RES/59/245 Specific actions related to the particular needs and
problems of landlocked developing countries: outcome of the International
Ministerial Conference of Landlocked and Transit Developing Countries and
Donor Countries and International Financial and Development Institutions on
Transit Transport Cooperation.” 22 December 2004. http://www.un.org/specialrep/ohrlls/lldc/a-res-59-245.pdf