Transcript Capacities - un

Emerging Challenges for LDCs
UN-OHRLLS Brainstorming meeting
in preparation for UNLDC IV
New York, 14 – 16 July 2010
Presentation by
Dr. Frannie A. LEAUTIER
Executive Secretary, ACBF
Distribution of LDCs: Mainly an African Problem Today
Majority of LDCs are on the African continent, particularly Sub-Saharan
Africa:
Income levels remain low, despite impressive economic growth
Progress in meeting the MDGs, but remaining weaknesses in nutrition,
health, education and adult literacy
Economic vulnerabilities still present:
agricultural production, pattern of exports, size of economies
share of population impacted by shocks (natural disasters, food
prices, fuel shocks, financial crises)
New vulnerabilities emerging:
Global: climate change; contagion in economic and financial
systems; technological transformation; communicable diseases
Regional: demographic; arable land; water and energy shortages;
challenges of economic integration; logistics and infrastructure
issues
Country: implementation for service delivery; governance
challenges; ethnic, religious, political violence
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Impressive Economic Transformation Before Crisis:
Real GDP Growth (%)
2005
2006
2007
2008
2009
2010
Capacities to project short-term economic growth, manage
indebtedness
in
(estimated)
(projections)
the face of financial crises, obtain market access under changing consumer
behavior,
times of4.9
sharp retrenchment
Africa secure external
5.9 financing
5.9 in 6.0
1.3
4.3
Central Africa
5.0
2.6
5.6
4.5
0.9
3.8
East Africa
7.4
6.8
7.5
6.4
3.9
5.3
North Africa
6.0
5.9
5.3
4.7
3.5
4.1
Southern Africa
6.0
6.6
6.7
4.6
-1.6
4.1
West Africa
5.1
5.3
5.9
5.3
2.4
4.7
Oil-exporters
6.8
6.0
6.9
5.6
2.5
4.9
Oil-importers
4.9
5.9
5.1
4.2
0.5
3.6
Source: UNECA (2010). Economic Report on Africa. Addis Ababa: UNECA.
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Emerging Challenges for LDCs
• Post-financial crisis economic models
• Demographic shifts and their implications
• Balancing effects of more open borders (trade,
remittances)
• New challenges of urbanization and global connectivity
• Emerging and re-emerging disease patterns in humans and
animals
• Scarcity of water, energy, and land
• Climate change and pressure on natural resources
• Geographical and temporal patterns of economic growth
• Transforming agriculture and food security issues
• Technological and business model shocks
• Challenges of integration (labour and capital markets,
logistics and infrastructure)
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Pre and Post Crisis Economic Growth
Recovery in Africa 2008-2010
Capacities: to decide on R&D, industrial and competition policies in light
of the financial crisis and growing competition from BRICs; maintain good
fiscal governance and accountability for and get consensus on policy
adopted; protect consumers in light of growing complexity of financial and
business decisions; tap into the potential of nascent SMEs; regulate
financial and commercial markets; effectively choose among integration
options and their governance implications; shape investment policy to
ensure allocative efficiency; strengthen macroeconomic management and
redefine the role of the central banks
Source: Calculated using data from UNECA, 2010.
Demographics: What do the patterns of growth imply?
Capacities: to manage demographic transitions (employment
creation, pension management); tap into creative potential of
agglomerations and manage twin challenges of access to services
and food security
Source: United Nations
Can LDCs in Africa balance the effects of trade and
migration to their advantage (2005-2008)?
Angola
Benin
Burundi
Congo, R
Djibouti
Ethiopia
Gambia
Ghana
Guinea Bissau
Kenya
Lesotho
Liberia
Mali
Morocco
Niger
Nigeria
Rwanda
Nigeria
Sao Tome & Princi
Sierra Leone
South Africa
Swaziland
Tanzania
Togo
Uganda
Zambia
Growing remittances (current US$)
Cameroon
Cape Verde
Cote d’Ivoire
Gabon
Guinea
Mozambique
Senegal
Sudan
Declining exports
Chad
Equatorial Guinea
Eritrea
Mauritania
Mauritius
Somalia
Growing exports (%growth)
Burkina Faso
Central African Republic
Comoros
Congo, DRC
Madagascar
Malawi
Namibia
Zimbabwe
Declining remittances
Source: Ranked using data for 2000 and 2005
from the World Development Indicators
Global connectivity of the leading 123 world cities measured in terms of
networks of accountancy, advertising, banking/finance, insurance, law, and
management consultancy firms. Only six of the global cities are African.
Capacities: to manage global integration during economic slowdown; to deal
with urbanization stresses on land use, access to services, food prices and riots,
youth unemployment, urban-rural linkages; for effective connectivity of leading
and lagging areas through labor migration policies and infrastructure
investments; for containing contagion in crime, violence, security issues; to
manage effects of increased frequency/severity of disasters
Source: Taylor (2003)
Successfully tackling current communicable diseases can
build readiness for handling emerging diseases in the future
Capacities: set up “smart surveillance” measures in the hotspots
indentified; generate dynamic responses to communicable diseases
that are based on effective collection and monitoring of outcomes
with replication of solutions worked out from in-country trials
Dynamics of change impacting LDCs: Water is at the nexus
of many risks
Build secondary
networks
Chronic
diseases
Identify &
remove critical
path
Science &
technology
Pandemic
Hedge against
shocks
Control for
natural or
induced risks
Balance between
local & global
actions
Agricultural
Productivity
& food prices
Infectious
diseases
Water
Extreme weather
events
Infrastructure
provision
Capacities: to develop regional
strategy and policies for water
Urbanization
Biodiversity
&
basin management and managing
migration
the suite of risks related to water
shortages
Source: Adapted from World Economic Forum 2009
Africa: Electrification Rate in 2005 (%)
50.00%
45.00%
40.00%
35.00%
30.00%
25.00%
20.00%
15.00%
10.00%
5.00%
0.00%
Oil Exporting Middle Income
Countries
Countries
Low Income
Countries
Fragile States
•Capacities:
Energy trade:
Limited
atsupport
present,
no regional
to develop
and
regional
energymarkets,
markets,no
put in place and
interconnectivity
maintain
interconnected transmission grids, and improve the level of
of current
network operations;
investment
innovative
alternatives
•efficiency
Inefficiency:
In operations
and maintenance
of in
existing
systems
for energy generation and sales; enhancing capabilities for cross-country
•conflict
Innovation:
Little innovation on alternatives with negative pressure on
prevention, resolution and management to ensure existing resources
forest
desertification
reach
the and
demand
centres across the continent
Source: Calculated using data from UNDP 2007/2008 and OECD classification
Dynamics of change impacting LDCs: Agricultural
dependency and arable land. Top 10 Countries over 5 Years
Country
Ag. Value
Rank in
Availability:
in 2003
2003
Arable land makes(%GDP)
up 11% of total
global
Liberia land area (1.4 billion
1
68 hectares
globally)
Guinea
2
62 has the
EuropeBissau
and Central Asia
highest arable land per capita (0.57 ha
Central
African
3
56
per person)
Republic
Arable land per capita has declined by
19%
inDR
low income countries
over
Congo,
4 the
51
past two decades
Lao PDR
Technology:
49
5
Sierra Leone
6
47
Fertilizer
in
Tanzania use per hectare
7
45 is highest
East Asia and Pacific and lowest SubEthiopia Africa (by a factor
8
Saharan
44 of 17)
During the past 30 years, Africa has
Rwanda
41 major9
experienced at least one
drought
each decade 41
Togo
10
Country
Ag. Value
in 2008
(%GDP)
Rank in
2008
Liberia
61
1
Guinea Bissau
56
2
Central African
3
53
Republic
Capacities: agricultural productivity,
Congo,
DR in drought resistant
5
46
innovation
technologies,
managing
Lao
PDR
10
34food security,
regional food markets and agricultural
Sierra
4
50
supplyLeone
chains
Tanzania
6
45
Ethiopia
45
7
Rwanda
37
9
Togo
44
8
Source: World Development Indicators, World Atlas
Dynamics of change impacting LDCs dependent on
Agriculture: The Case of Ethiopia and rainfall patterns
Ethiopia – a
relatively water
rich country, but
with GDP still
tied to yearly
rainfall variations
25
20
15
10
5
0
%
0
-40
year
2000
-10
-15
rainfall variability
-60
1999
1998
1997
1996
1995
1994
1993
1992
1991
1990
1989
1988
1987
1986
1985
1984
1983
-20
1982
-5
GDP growth
-20
-25
Ag GDP growth
-80
Source: A Country Water Resources Assistance Strategy for Ethiopia (Sadoff)
Capacities:
for multi-Sectoral policies that recognize the complex
interconnection between climate change, environment and development
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LDCs can leverage a Portfolio of Assets: natural,
produced, human and social capital
Per Capita Wealth
Share of Wealth by Category
(US$1000)
(%)
450
80
400
60
350
40
300
250
20
200
0
OECD
150
100
50
0
OECD
Low
Income
SSA
Low
Income
SSA (no
oil)
Natural Capital
Produced Capital
Human&Social Capital
Capacities to balance development of human, social and produced
assets while consuming and preserving natural assets
Source: World Bank (2006) Where is the Wealth of Nations
Dynamics of change impacting LDCs: Geographical pattern of
projected real GDP growth rates for the year 2010
•
•
•
•
•
•
•
•
•
•
•
•
5 Fastest growth:
Mongolia 12.8%
China 9.5%
India 8.1%
Mozambique 7.8%
Ethiopia 7.7%
Slowest growth:
Germany 1.2%
Italy 1.3%
Spain 1.7%
Japan 1.7%
Congo, R 1.9%
Capacities to sustain significant growth patterns over time
and speed growth in other sub-regions, while ensuring the
polity owns the growth agenda
Transforming Agriculture: Top 20 Producing Countries of
Cotton Lint in 2007 by Value in $ 1000
Rank Country
Value ($1000)
Rank Country
Value ($1000)
1
China
11,317,680
11
Australia
406,747
2
India
6,531,712
12
Egypt
335,492
3
USA
6,207,813
13
Nigeria
228,609
4
Pakistan
2,942,239
14
Burkina Faso
218,367
5
Brazil
2,013,801
15
Argentina
215,249
6
Uzbekistan
1,677,462
16
Mexico
215,249
7
Turkey
1,425,101
17
Tajikistan
206,342
8
Syria
541,835
18
Kazakhstan
163,992
9
Turkmenistan
460,188
19
Benin
161,748
10
Greece
445,344
20
Mozambique
139,884
Source: FAOSTAT, 2010.
Technological and Business Model Shocks: Global Brands-Top 20 Wool Exporters 1994 to 2004 by Value in 2004 (US$ 000)
1994
Australia
New Zealand
Argentina
South Africa
Kazakhstan
Russian Federation
Uruguay
France
United Kingdom
Ireland
Kyrgyzstan
Italy
Mongolia
Germany
Spain
Chile
Brazil
Lesotho
China
Netherlands
Wool Tops
Wool Scoured
Wool Greasy
2004
Australia
New Zealand
South Africa
Germany
Argentina
United Kingdom
France
United States of America
Italy
Uruguay
Ireland
Hungary
Romania
Belgium
Spain
Norway
Brazil
Chile
Peru
Czech Republic
1994
2004
1994
2004
Australia
New Zealand
United Kingdom
Argentina
France
Russian Federation
South Africa
Germany
Uruguay
Malaysia
Spain
Ireland
Kazakhstan
Pakistan
Italy
Azerbaijan
Netherlands
Romania
United States of America
Greece
New Zealand
Australia
United Kingdom
China
Germany
Turkey
South Africa
Belgium
France
Argentina
Spain
Uruguay
Italy
Mongolia
Saudi Arabia
Russian Federation
Portugal
United States of America
Romania
Syrian Arab Republic
France
Germany
Australia
Uruguay
United Kingdom
South Africa
Argentina
Thailand
Malaysia
United States of America
Italy
Brazil
China
Spain
Czech Republic
Netherlands
Portugal
Republic of Korea
Iran (Islamic Republic of)
Bulgaria
Germany
Italy
France
Australia
Czech Republic
Argentina
China
South Africa
Thailand
Spain
United Kingdom
Bulgaria
India
United States of America
Chile
Brazil
Hungary
Austria
Malaysia
Republic of Korea
Source: FAO, Key Statistics of Food and Agricultural Trade, 2007
Capacities to transform primary products, manage complex
supply chains, and negotiate appropriate trade agreements
Challenges of Economic Integration
• Improve trade within borders (rural-urban) and outside
borders by:
– Mitigating for geographic characteristics: country size;
proximity to other countries; common borders and landlockedness
– Rethinking trade policies in place: domestic
(connectivity through transport and communication
investments; competition and reliance on markets) and
international (trading agreements, barriers and tariffs)
– Adjusting for income levels: richer countries to interact
more with other countries (regional trade)
• Other factors for consideration:
– Import and export policy reforms
– Functioning of the labour markets
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Key elements of the logistics revolution: access,
inventory, supply chain logistics, risk management
ACCESS
INVENTORY
Opportunity for LDC economies:
•Many LDCs are still tackling first generation
infrastructure, transport and trade facilitation
constraints
•Few firms in LDCs have internalized the issue of
supply chain management
•There is room for LDCs to learn from countries in
Asia (Malaysia) and Africa (South Africa)
SUPPLY CHAIN LOGISTICS
RISK MANAGEMENT
Source: Images from Google Images
Conflict and Security Challenges
Poverty & access to services:
Threat from climate change:
•
• Droughts, desertification, land
degradation, depletion of
forests and fisheries
• Threat to coastal populations,
increase in forced migration
•
Speed and scope of addressing
chronic poverty and broadening
access to basic needs
Horizontal inequalities (ethnic,
religious, group, clan, race,
geographical, gender distinctions)
Challenge from weak states: Economic/Political Competition:
• Low ability to generate jobs, poor
• Growing insurgency
distribution of natural resources
• Networks of crime, drugs, • Weak inclusion and poor
representation
illicit trade, human
trafficking
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Three Potential Scenarios for Africa and
LDCs in other Regions
Continental
Ownership and
Leadership
Sub-Regional
Mosaic
Externally Driven
Nation States
Scenario 1: Continental Leadership and Ownership
(Optimistic: high on inspiration, aspiration, and coordinated action )
LDCs Leadership
& Ideas
International
Parity
Domestic
Results
•Polity owns the growth
•LDC standards of
•LDCs resolve conflicts
agenda
governance internationally
and prevent violence
•LDC countries lead
accepted
and crime
innovation
•LDC countries contribute
•Service solutions
•Homegrown democracies
to international
(health, gender, water,
flourish
architecture (trade, finance,
education) are effective
•Leadership & representation environment, migration,
in international institutions
and debates
debt)
Scenario 2: Sub-Regional Mosaic
(Realistic: focused on performance and results, managing
interdependency, mastering strategic planning)
Sub-Regional
Prominence
•Models of success in
Differentiated
Performance
•Some RECs with
Visible but
uneven
Outcomes
•Isolated success in service
some RECs but limited respectable performance,
provision (heath, education,
continental learning
but others not
gender, water)
•Variable quality of
•Ad hoc cooperation driven
•External aid driven by
democratic and
by bilateral strategies
external security needs and
economic governance
•Few prominent countries
donor-based evaluations of
driving the external agenda
capacity and need
Scenario 3: Externally Driven Nation States
(Gloomy, with attention to adaptability and resilience,
managing uncertainty from conflict, climate, global events)
Reacting to
external threats
Weak capacity
to manage
Country
Conditionality
•New technologies and
•Weak capacity to handle ethnic,
•Service provision
business models threaten
religious, and political violence
variable with heavy
domestic production
•Weak country institutions lack
dependence on
•Governance standards
capacity to react to international
international civil
externally set
imperatives
society
•Under-representation in
•Access to globalization
•Selective aid provision
international fora and
determined by bilateral and multi-
with specific conditions
debates
lateral organizations
Scenarios for Africa and LDCs in other
Regions and Capacity Implications
Continental
Ownership and
Leadership
•Capacity to manage
across sectors,
geographies &
generations
•Capacity to engage
civil society, private
sector, and
international
community
Sub-Regional
Mosaic
•Capacity to decide
on investment
priorities
•Capacity to
observe, collect
and analyze facts
and data
Externally Driven
Nation States
•Capacity to
negotiate and
manage conflict
•Capacity to
transform agriculture
Three key aspects of critical capacities
regardless of scenario
• Abilities to formulate, implement, analyze, evaluate and
revise the appropriate policies
• Skills to observe, collect, analyze and evaluate outcomes,
trends, and patterns in a variety of macroeconomic,
sectoral and cross-sectoral issues, including the requisite
leadership skills to move perspectives, transform
societies, unite diverse perspectives, or oversee
implementation
• Tools to know where you are, track where you are going,
tap into opportunities, and handle the challenges at hand
Financing Capacity Development and the Patterns of ODA
Source: MDG Report 2010 - UN
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Implications for ACBF
•
•
•
•
•
Philosophy: develop a philosophy and approach that is suitable to the
contexts and realities of different countries on the continent, drawing on
local knowledge and practical skills, and embedding work programs in
country priorities
Entry Points: select areas for strategic long-term support to particular
countries, sub-regions, or group of institutions in partnership with critical
institutions to build sustainable capacity—for example supreme audit
institutions, procurement agencies, policy units, data collection and analysis
agencies, leadership development, and entrepreneurship skills building
Partnerships: give priority to finding partnerships in tackling policy issues
that can help evolve from one scenario to the next—policies on agriculture,
climate change, investment and trade---and give priority to partnerships
with institutions that can stretch geographies—(WB, IMF, IMF) (AfDB, AU,
ECA, NEPAD) (bilateral donors) (private sector)
Piloting: put in place a more experimental “test and learn” approach to
capacity building, drawing out lessons from experience horizontally across
sectors and themes and vertically across levels of engagement
Scaling-up: speed up success by supporting regional learning institutions,
policy institutes, regional NGOs, private sector associations
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