Compact for Inclusive Growth and Prosperity Report of the United Nations Secretary-General’s Eminent Persons Group on the Least Developed Countries Table of Contents Note by the Secretary-General 3 Eminent Persons Group Letter from Co-Chairs 5 Eminent Persons Group 7 Eminent Persons Group Terms of Reference 8 Introduction 10 Chapter 1: A Splintering Global Economy 12 Chapter 2: Responding to the Challenge – A Framework 19 Chapter 3: Objectives and Targets for a Programme of Action 26 Chapter 4: Targeting Specifi c Vulnerabilities 35 Conclusion 39 Appendix 41 Note by the Secretary-General With a combined population exceeding 880 and Development at the Brookings Institution; million people, the Least Developed Countries Sir Fazle Hasan Abed, founder of BRAC, include the poorest and most vulnerable seg- the Bangladesh Rehabilitation Assistance ment of humanity. Most of their populations Committee; Sir Richard Jolly, Honorary live on less than a dollar a day and face pro- Professor of the Institute of Development found challenges to their health and well-being. Studies at the University of Sussex; Dr. In spite of their painstaking efforts and those of Louis Kasekende, Deputy-Governor of the the international community, the LDCs’ poten- Bank of Uganda; Mr. Louis Michel, mem- James Wolfensohn, tial remains untapped, and their economies are ber of the European ParliamentCo-chair and former increasingly marginalized in the global arena. European commissioner for Development These countries are at the epicentre of a con- and Humanitarian Aid; and Mr. Hiromasa tinuing developmental emergency. Yonekura, Chairman of Sumitomo Chemical Company Ltd. The plight and potential of the LDCs will be highlighted at the Fourth United Nations Their report points to weak human assets, lim- Conference on the Least Developed Countries, ited physical and institutional infrastructure, to be held in Istanbul, Turkey, from 9 to 13 May. dependence on fragile agricultural sectors and In preparing for this major event, I decided to a limited range of exports as the main factors appoint a Group of Eminent Persons in order hampering the LDCs’ economic prospects. The to benefi t from the wisdom of individuals, from Group’s main fi nding is that the gap between within and outside government, who possess the LDCs and the rest of the world will con- a broad range of experience and expertise in tinue to widen unless the structural limitations managing development challenges. of their economies are addressed. With the slogan “No MDGs without LDCs”, the report The purpose of the Group was to build on the also emphasizes the importance of this group lessons of the past decade’s international sup- of countries in the global economy and their port for the LDCs, and to recommend a new relevance to the development agenda of the in- generation of policy measures in the areas of ternational community. While international sup- aid, trade, foreign direct investment, technol- port will remain critical, the LDCs themselves ogy transfer, debt relief and adaptation to and have an important role to play, especially in the mitigation of climate change. I also asked the area of governance. Group to raise international public awareness of the Conference. I commend the Group for their hard work and insights. This report is an important contribu- The former President of Mali, Mr. Alpha Oumar tion to the ongoing intergovernmental consul- Konare, and the former President of the World tations leading up to the Istanbul Conference. Bank, Mr. James D. Wolfensohn, served as co- I urge Member States to read this report care- chairs of the Group. Other members include fully and to draw lessons from its conclusions Ms. Nancy Birdsall, president of the Centre for and recommendations. Global Development; Mr. Kemal Dervi, vice president and director of Global Economy 3 I urge all Member States, fi rst and foremost the States will seize the moment to make historic LDCs themselves, with their development part- decisions commensurate with the challenges ners and the whole international community, to at hand. The UN system for its part remains actively engage in preparing a Programme of committed to support this endeavour. Action that will enable us to face the tests of the decade ahead. It is my sincere hope that when they gather in Istanbul in May, Member James Wolfensohn, Co-chair 4 Eminent Persons Group Letter from Co-Chairs Letter dated 15 March 2011 from the New York. We have since benefi ted from the Co-Chairs of the Eminent Persons substantive and logistical support of the Offi ce Group on the Least Developed of the High Representative for the Least Developed Countries, Landlocked Developing Countries addressed to the United Countries and Small Island Developing Nations Secretary-General States (UN-OHRLLS) and were hosted by the Government of Belgium for our second meet- We, the Group of Eminent Persons, comprised ing on 19 January, 2011 in Brussels. of Alpha Oumar Konaré, former president of the Republic of Mali (co-chairperson of the We have made a critical but constructive Group); James D. Wolfensohn, chairman and assessment of the impact of the Brussels CEO of Wolfensohn & Company and former Programme of Action on the progress of the President of the World Bank (co-chairperson of LDCs during the decade 2001-2010. We have the Group); Sir Fazle Hasan Abed, the founder come to the conclusion that despite some and chairperson of BRAC, the Bangladesh progress on the economic and social front, Rehabilitation Assistance Committee; Nancy the gap between the LDCs and the rest of Birdsall, the founding president of the Center the world, including the low middle income for Global Development; Kemal Dervis, vice countries is widening. Some of the reasons president and director of Global Economy are as follows: The structural disadvantage of and Development at Brookings Institution; these economies, weak human assets (edu- Hiromasa Yonekura, chairman of Sumitomo cation, health, nutrition etc.), limited physical Chemical Company Ltd.; Louis Michel, member and institutional infrastructure, dependence of European Parliament and formerly the on fragile agricultural sectors and a limited European commissioner for Development and range of exports are at the heart of the contin- Humanitarian Aid; Louis A. Kasekende, Deputy ued marginalisation of these countries within Governor of the Bank of Uganda and formerly the world economy. In short, the “least devel- executive director at the World Bank; Sir Richard oped” condition has tended to generate “less” Jolly, Honorary Professor of the Institute of development. In our view, unless we address Development Studies at the University of the structural weaknesses that make these Sussex , have the honour of submitting to you countries “least developed” we will not reverse our report on the current challenges of the least their increasing marginalisation. We urge, in developed countries(LDCs) and the domestic the strongest possible terms, that the next and international support measures needed to Programme of Action focus on reducing the ensure their inclusive growth and sustainable structural gap that exists between LDCs and development. other countries. In preparing this submission, we were guided We have also come to the conclusion that busi- by the terms of reference that were developed ness as usual is not an option and that there will by yourself and the discussions over the course be “No MDGs without LDCs”. The under devel- of our initial meeting on 23 October, 2010 in opment of the LDCs can be remedied in part 5 through strong policy measures taken by the with a strong follow-up and monitoring mecha- LDCs themselves. Firstly, LDCs should assume nism to ensure the full implementation of the greater ownership of their own development next Programme of Action. trajectory. It is our contention that some of the We trust that the policy recommendations in- tools to achieve this is through negotiating bet- cluded in the report will contribute to further ter prices for their valuable raw materials and enrich the discussions leading us to Istanbul in turn processing these materials to generate in order to ensure an effective and meaningful capital gains. Increased mobilization of domes- outcome. tic resources is also a key tool in their devel- opment. And fi ghting corruption and seeking We thank you for your trust and would like to for the return of stolen assets can improve the express our gratitude to all who supported us business climate and spur future growth. That during this process, in particular UN-OHRLLS being said, external aid remains a fundamental and the Government of Belgium. We also want ingredient to stimulate socio-economic devel- to express our deep respect and thanks to all opment in the LDCs. Development assistance Panel members, who injected total commit- in our view should be linked to measurable ment, enthusiasm and creativity into this impor- objectives and goals. Further, it is incumbent tant task. that all stakeholders deliver on their pledges, and that LDCs suffering from debt-distress are provided with additional relief from offi cial debt under internationally agreed-upon conditions. President Alpha Oumar Konare, James Wolfensohn, An international support architecture is needed Co-chair Co-chair 6 Eminent Persons Group PRESIDENT ALPHA OUMAR JAMES WOLFENSOHN KONARÉ Chairman and CEO of Former President of the Republic Wolfensohn & Company, of Mali Co-chair L.L.C. Co-chair NANCY BIRDSALL KEMAL DERVIŞ Founding president of the Center Vice president and director for Global Development of Global Economy and Development at Brookings Institution SIR FAZLE HASAN ABED SIR RICHARD JOLLY Founder and Chairperson of Honorary Professor and Research the Bangladesh Rehabilitation Associate of the Institute of Assistance Committee (BRAC) Development Studies at the University of Sussex LOUIS KASEKENDE LOUIS MICHEL Deputy Governor of the Bank Belgian Member of European of Uganda Parliament HIROMOSA YONEKURA Chairman of Sumitomo Chemical Company Ltd.