Differentiation in the Special Treatment of Developing Countries
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SLICING UP THE DEVELOPING WORLD: DIFFERENTIATION IN THE SPECIAL TREATMENT OF DEVELOPING COUNTRIES Djalita Fialho The Science and Technology Foundation of the Ministry of Science, Technology and Higher Education of Portugal funded this PhD (SFRH/ BD/60826/2009). This dissertation is part of the Research Programme of CERES Research School for Resource Studies for Development © Djalita Nadine Fialho de Oliveira Ramos 2015 Cover design: graphic design by Érico Veríssimo All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, without the prior permission of the author. Printed in The Netherlands. ISBN 978-94-91478-32-1 Printed by: Ipskamp Drukkers B.V. Josink Maatweg 43 7545 PS Enschede The Netherlands Tel: 0031-(0)53 482 62 62 SLICING UP THE DEVELOPING WORLD: Differentiation in the special treatment of developing countries Het opdelen van de derde wereld: Differentiatie in de speciale behandeling van ontwikkelingslanden Thesis to obtain the degree of Doctor from the Erasmus University Rotterdam by command of the Rector Magnificus Prof. dr Huibert A. P. Pols and in accordance with the decision of the Doctorate Board The public defence shall be held on 19 June at 16.00 hrs by Djalita Nadine Fialho de Oliveira Ramos born in Praia, Cape Verde Doctoral Committee Promotor Prof. dr. Peter A. G. van Bergeijk Other Members Prof. dr. R. E. van der Hoeven Prof. dr. W. Hout Prof. dr. R. S. Gowricharn, Tilburg University Copromotor Dr S. A. Newman, Senior Lecturer, University of the West of England To my mother, Fatú, and her caring and selfless nature Contents List of Tables, Figures and Appendices ix Acronyms xii Preface and Acknowledgments xiv Abstract xviii Samenvatting xxi Introduction 1.1. More and more categories of developing countries: too much of a good thing? 1 1.2. Why take on the issue of developing country differentiation? 9 1.3. Conceptualising the LDC mechanism: the ins and outs of the category 12 1.3.1. What (and why) now? 16 1.3.2. Taking stock of special and differential treatment under the LDC mechanism 20 1.4. Statement of the research problem 24 1.5. The questions being researched 27 1.6. Organisation and structure of the thesis 28 Notes 31 Studying developing country differentiation: Engaging with the data 31 2.1. Towards a political economy of developing country differentiation 32 2.1.1. Setting the scene: from where do we start? 32 2.1.2. Using a constructivist approach to examine developing country differentiation 37 2.1.3. In search of answers: fleshing out concepts and theoretical fields 41 Power and Interests 41 Bureaucracy and Autonomy 43 Authority 46 2.2. Data collection 48 vi vii Contents 2.2.1. Using mixed methods 49 2.2.2. Semi-structured interviews 52 The sample 54 Data analysis and reporting 57 Some challenges and limitations 60 Notes 63 Altruism but not quite: The genesis of the Least Developed Country (LDC) category 63 3.1. Introduction 64 3.2. World context, theoretical approaches and analytical models (1960s and 1970s) 65 3.3. A new category of (poor) countries: facts and protagonists (1964 - 1971) 68 3.4. A change in perspective … and a category is born 73 3.5. Responses to the LDC category 78 3.6. Conclusion 82 Notes 84 Spaghetti and noodles: Why is the developing country differentiation landscape so comples? 84 4.1. Introduction 85 4.2. An overview of multilateral initiatives 88 4.3. Why does the proliferation occur? 97 4.3.1. International organisations 98 4.3.2. Developed countries 101 4.3.3. Developing countries 102 4.3.4. Representatives 103 4.4. Case Study: landlocked developing countries (LLDC) versus small island developing states (SIDS) 105 4.4.1. Presenting the case 105 4.4.2. Case study conclusions 111 4.5. Conclusion 113 Notes 115 Zooming into the case of Cape Verde - Part I: Before LDC graduation 117 Contents viii 5.1. Introduction 119 5.2. The setting: Cape Verde 122 5.2.1. General economic and political context of LDC admission 122 5.3. Becoming an LDC (1975-1977): why and how? 129 5.4. Being an LDC: growth and development performance while in the category (1977-2007) 134 5.4.1. 1982-1985: the first National Development Plan 136 5.4.2. 1986-1990: the second National Development Plan 137 5.4.3. 1991-2001: multi-party system and economic liberalisation 137 5.4.4. 2002-2007: the inevitability of LDC graduation 139 5.5. Changing trends in international assistance to Cape Verde 150 5.6. Conclusion 156 Notes 159 Zooming into the case of Cape Verde - Part II: LDC graduation negotiation process 158 6.1. Introduction 161 6.2. Motivation(s) to graduate 162 6.2.1. External push vs. bureaucratic pull 163 6.2.2. Lack of framing in the national decision-making process 171 6.2.3. A new LDC transition framework 175 6.2.4. LDC-inspired advantages persist 181 6.3. Conclusion 187 Notes 190 Conclusions 190 7.1. Introduction: research questions, data collection methods and analytical framework 193 7.2. Main findings: the empirical chapters 195 7.3. Impact of the graduation 199 7.4. Developing country differentiation 2.0 201 Appendices 203 References 247 List of Tables, Figures and Appendices Tables 1.1. The proliferation of UN-sponsored categories of developing countries 1.2. Main changes in LDC criteria and in LDC eligibility and graduation rules (1971-2011) 2.1. Overview of the research design: linking research questions and data collection methods 2.2. Typology of interviewees/respondents/informants 2.3. Developing codes/themes for data analysis 3.1. The birth of the LDC category: a chronological tale of selected facts 4.1. Matrix of selected developing countries’ categories (as of December 2013) 4.2. General overview of selected developing countries categories and respective benefits 4.3. Comparing LLDC and SIDS: bringing out the facts 5.1. Cape Verde’s trade gap 5.2. Cape Verde’s official unemployment rates (2002-2012) 5.3. Selected development indicators 5.4. International tourism in relation to GDP 5.5. External and domestic public debt (2002-2012) 5.6. Ranking of the largest ODA recipients 6.1. Evolution of positions regarding Cape Verde’s LDC graduation 6.2. Selected external financial flows (ODA and FDI) (2000-2011) 6.3. Comparing Cape Verde’s LDC admission and graduation processes ix x List of Tables, Figures and Appendices Figures 1.1. The timeline of developing country categorisation within the UN 1.2. Conceptualisation of the LDC category 1.3. The structure of the thesis: the empirical chapters 2.1. The “equation”: handicaps – special and differential treatment – expected impact 2.2. Methodological triangulation of data collection methods 2.3. Triangulation of different perspectives 4.1. The “spaghetti bowl” of nine overlapping categories of developing countries 4.2. Five overlapping categories 5.1. Timeline of Cape Verde’s major milestones 5.2. Workers’ remittances/receipts, BoP, constant thousand 2005 US$ (1977-2011) 5.3. Workers’ remittances per capita, BoP, constant 2005 US$ (1977- 2011) 5.4. ODA and Workers’ remittances as % of GNI (1980-2011) 5.5. Exports vs. Imports of goods and services (% GDP) (1980-2011) 5.6. Real per capita GDP growth, percentage change (1981-2012) 5.7. Evolution of GDP per capita, constant 2005 US$ (1982-2012) 5.8. Evolution of GDP per capita, index 1982=100 (1982-2012) 5.9. International tourism, receipts (% of GNI) (1995-2011) 5.10. International tourism, receipts (% of total exports) (1995-2010) 5.11. International tourism, receipts (constant 2005 thousand US$) (1995- 2011) 5.12. Foreign direct investment, net inflows (% of GDP) (1986-2012) 5.13. GDP structure (% of total), constant 1980 prices (1980-2007) 5.14. Net ODA received, constant 2011 million US$ (1975-2011) 5.15. Net ODA per capita, constant 2011 US$ (1975-2011) 6.1. Cape Verde LDC admission/graduation timeline 6.2. Net bilateral aid flows and net official flows from UN agencies, constant 2005 million US$ (1975-2011) Appendices A. List of Least Developed Countries (LDCs) B. Interview guides and List of semi-structured interviews conducted xi List of Tables, Figures and Appendices C. LDCs and PPP converted GDP per capita, at 2005 constant prices – in US dollars (1971 and 2009) D. Number of classifications per country (as of end 2013) E. Developing country categorisation/differentiation landscape (as of end of 2013) F. Six different lists of SIDS G. GDP structure (% of total), constant 1980 prices H. Example of an interview transcript I. Selected documents from UN Archives in Geneva Acronyms AOSIS Alliance of Small Island States ECOSOC Economic and Social Council of the UN EDI Economic Diversification Index EVI Economic Vulnerability Index FDI Foreign Direct Investment FS Fragile States G77 Group of 77 GATT General Agreement on Tariffs and Trade GDP Gross Domestic Product GNI Gross National Income GNP Gross National Product GSP Generalised System of Preferences HHD High Human Development HIC High Income Countries HIPC Highly Indebted Poor Countries IMF International Monetary Fund IO International Organisation LDC Least Developed Country LIC Low Income Countries LICUS Low Income Country Under Stress LLDC Landlocked Developing Countries LHD Low Human Development xii xiii List of Tables, Figures and Appendices LMIC Lower-middle Income Countries MHD Middle Human Development NGO Non-governmental Organisation ODA Official Development Assistance OECD Organization for Economic Cooperation and Development SIDS Small Island Developing State SVE Small and Vulnerable