Challenges and opportunities of LDCs Graduation: UNDP as a Strategic Partner in the Graduation Process Ayodele Odusola, PhD Chief Economist and Head Strategy and Analysis Team UNDP Regional Bureau for Africa, New York
Overview of the presentation Highlight of LDCs Graduation since 1971 Angola: A sleeping Giant in Africa Transitory and structural opportunities to graduation Challenges and risks facing LDCs graduation process UNDP as a strategic partner in the graduation process 2
Overview of LDCs Graduation since 1971 (1/3) Current graduation criteria Countries already graduated GNIpc HAI % of under malnourished, U 5MR Gross Sec Enrolment Ratio, and Adult Literacy Rate EVI Pop, Remoteness, export concentration, % of agric., % of pop in elevated costal zones, victims of natural disaster, instability of agric. production, instability of exports Botswana (19 Dec 1994) economic and precautionary conditions Maldives (1 Jan 2011) GNI per capita + HAI Cape Verde (20 Dec 2007) GNI per capita + HAI Samoa (Jan 2014) GNI per capita + HAI 3
Overview of LDCs Graduation since 1971 (2/3) Countries scheduled for graduation Potentials for graduation 2017 Equatorial Guinea Met criteria but not yet recommended Tuvalu Kiribati 2020 2021 Vanuatu Angola Met criteria for the first time; could be recommended by 2020 Bhutan, Nepal, STP, Solomon Islands Timor Leste 4
Overview of LDCs Graduation since 1971: Why is graduation so sticky? (3/3) Weak capacity to manage economic vulnerability and social transformation Fear of losing privileges No country graduated under economic vulnerability criterion Maldives, Cabo Verde, Samoa, Equatorial Guinea and recently, Vanuatu, arising from the 2014 tragic cyclone 5
Angola: A Sleeping Giant in Africa 18000 Per capita Income 2015 ($) 16000 14000 12000 10000 8000 6000 4000 2000 0 Seychelles Equatorial Guinea Mauritius Gabon Botswana Namibia Libya Tunisia Angola Swaziland Cabo Verde Morocco Sao Djibouti Congo, Tome Rep. and Principe Sudan Mauritania Cameroon Cote Ghana d'ivoire Kenya Comoros Lesotho Zambia Benin Chad Gambia, Guinea Bissau Burkina Faso Central Liberia Sierra Burundi Malawi Rwanda Mali Senegal Somalia South Zimbabwe Niger Madagascar Mozambique Leone SudanTanzania Togo Uganda African TheCongo, Republic Dem. Ethiopia Rep. Algeria Graduation message focus more on: Human asset development Economic diversification South Africa Egypt, Arab Rep. 0 1E+11 2E+11 3E+11 4E+11 5E+11 6E+11 GDP Size 2015 ($) Nigeria 6
Transitory opportunities Preferential market access Trade related measures Special & differentiated treatment on WTO obligations International support measures ODA Measures on capacity building on trade General support measures Other support measures Contribution to general budget (0.01% and 10%) Education and research facilities 7
Structural and non structural opportunities Structural Opportunities Non structural Opportunities Natural resource endowment Domestic resource mobilization Remittances ICT Agricultural productivity Youthful population Regional integration Emerging donors 8
Structural and emerging risks to LDCs Graduation Low human capital Rising fragility Structural risks High poverty and inequality Weak economic governance Over dependency on primary commodity Youth budge Climate change debacle Terrorism and Violent Extremism Global economic crisis Rising cost of remittances Emerging risks Emergence of unpredictable diseases Ebola & Bird flu Managing shocks and vulnerability SMEs limited access to finance (high lending rate, limited access to non debt financing, asymmetric fiscal support) Weak implementation of international support measures 9
Emerging lessons and messages The evolution of the criteria does not measure structural changes in the socio economic situation of countries given the objective of IPOA. Achieving IPOA s goal in Africa necessitates enhancing agricultural productivity and diversifying economies away from primary commodities production and exports Countries are not taking full advantages of transitory measures LDCs must invest in maximizing opportunities and in minimizing risks for smooth graduation 10
UNDP as a Strategic Partner on LDCs Graduation Facilitate preparation of Smooth Graduation Strategy (SGS) Support preparation of national progress report on SGS Build partnership around graduation strategy implementation Mainstream SGS into national strategies Alignment of programmatic interventions 11
THANK YOU 12