Opening Remarks at CS75 for Agenda item 3: Special Body on Least Developed, Landlocked Developing and Pacific Island Developing Countries

Honourable Chair,
Excellency, Ambassador of Mongolia,
Excellency, Under-Secretary-General, Ms. Fekitamoeloa Katoa ‘Utoikamanu,
Distinguished delegates, Ladies and gentlemen,

It is my pleasure to introduce the key findings, policy messages and successful examples of the Asia-Pacific Countries with Special Needs Development Report: Structural Transformation and its Role in Reducing Poverty. This report was prepared as part of our effort to support least developed countries, landlocked developing countries and small island developing States implement the 2030 Agenda for Sustainable Development.

The 2019 Report examines how structural transformation can contribute to reducing extreme poverty. It demonstrates how more structural transformation could lead to an improvement in productivity and job opportunities, thereby reducing poverty.

The document you are you are considering highlights that national planning strategies and their design are linked to: (i) assessment of structural transformation; (ii) poverty reduction initiatives; and (iii) group specific policy recommendations.

Excellencies, distinguished delegates,

With this context, these countries have made great development gains in recent decades. Economic growth has been accompanied by development successes. Large declines in income poverty have been registered. Between 1999 and 2015, the number of people living in extreme poverty declined by 100 million in these countries. Today, the average poverty headcount ratio in the Asia-Pacific countries with special needs is 11%, compared with 46% twenty years ago.
The CSN group is facing several challenges that reflect low overall productivity levels. Despite evidence of structural transformation in some countries with special needs, only a gradual increase in levels of productivity has occurred. Rather than moving up the value-added ladder, existing industries have been expanded, including extractive sectors. This has inhibited a shift of the workforce to advanced, high-productivity and skill-intensive sectors.

This Report finds that in least developed countries there have seen significant improvements in development outcomes. We have witnessed that creating productive capacities, which include the development of basic resources, entrepreneurial capabilities and backward and forward production linkages to the rest of the economy. Going forward, greater policy efforts are needed to boost agricultural productivity and strengthen production linkages with other sectors, and to increase the level of employment.

Today, the largest portion of the workforce in countries with special needs remains in the rural agriculture sector, where poverty is concentrated. Several countries with special needs are bypassing industrial development. The share of employment in industry, particularly in manufacturing, has stagnated or even regressed in several countries. In the case of the LDCs, labour productivity in the services sector is only 20% of the average of other developing countries.

In landlocked developing countries, there has been some shifts towards economic diversification away from extractive industries through private sector participation. By analysing these countries, the report finds that a shift of employment to manufacturing must take place to increase levels of productivity, otherwise, there will be lack of capital accumulation, technological progress and job creation.

These countries also need to facilitate the transformation to strengthen backward and forward linkages from existing domestic productive capacities. This entails creating links from existing production activities, including agriculture and mining, to manufacturing of export products.

In small island developing States, the concept of “blue economy” is central. For instance, fisheries and tourism may be considered sectors for developing linkages, but environmental sustainability and resilience against natural disasters and climate change must be ensured.

Sustaining poverty reduction requires economic transformation to be complemented by policy transformation, particularly in productivity and employment enhancing sectors.

Excellencies, distinguished delegates

In my Policy Statement yesterday, I mentioned that we could learn from each other as we strengthen policies, institutions and legislation to empower people and promote equality. I am encouraged by this Ministerial Panel discussion on Asia-Pacific Countries with Special Needs Development Report 2019 focused on how member States are designing their national sustainable development policies to achieve transformed and resilient societies in our region.

For example, Bangladesh has seen significant structural transformation and is a major player in clothing global value chains. It now needs to move up along global production chains, especially since it may graduate by 2024 from the category of least developed country.

In Nepal, which is still heavily dependent on agriculture, the Government aims to double agricultural production in the next five years through modernisation, diversification, commercialization and marketing in the agricultural sector. Such efforts and policies to boost agricultural productivity in a sustainable manner and reduce poverty should be the foundation for rural sector development. Such policies ensure sustainable poverty-reducing structural transformation. Similarly, Vanuatu is also designing policies to ensure transformation in agricultural sectors.

Another example is Timor-Leste, where structural transformation is proceeding quite rapidly and where the services sector recently surpassed agriculture in terms of importance for labour, and where natural resources will play an increasingly important role. In Fiji, the policies for harnessing greater involvement of the private sector through MSMEs financing and supporting women entrepreneurship are contributing to bringing about economic transformation.

ESCAP is stands ready to provide capacity building and technical assistance to these group of countries to address the challenges related to structural transformation, and its role in reducing poverty. I look forward to hearing later from member States about their efforts to strengthen structural transformation, and their national policies and strategic frameworks.

I am pleased to invite the Special Body to debate on these findings and policy considerations. We look forward to your guidance on capacity building activities and knowledge products the secretarial should undertake to support the implementation of the global programmes of action for least developed countries, landlocked developing countries and small island developing States of the Asia-Pacific region.

Thank you for your attention. I look forward to our discussions during this session today.