Landlocked Developing Countries Face Unique Challenges on Trade and Economic Progress

By Milos Purkovic

On November 5, the United Nations concluded its second conference on landlocked developing countries (LLDCs) and produced a 10-year action plan designed to address their bottlenecks related to transit, trade, and infrastructure. According to the 2014 Human Development Report, nine of the poorest performing 15 countries are landlocked and face additional burdens in these areas critical for economic growth. Further, the UN conference highlights growing international recognition of “landlockedness” as a development issue and an opportunity for broad based economic growth. Below are key takeaways from the conference, and implications for development in LLDCs.

1.     Trade processes in LLDCs are more expensive, take more time, and have more steps than in average transit countries

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In 2013, the cost for LLDCs to export and import a standard 20 foot container was over twice the average cost of shipping in transit countries. Additionally, export costs from 2006-2013 grew at a faster rate in LLDCs than in transit developing countries — roughly 38 percent compared to 26 percent. Import costs over the same period increased about 35 percent in LLDCs versus 22 percent in transit countries.

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Long Road Ahead for the Trade Facilitation Agenda

By Julia Marvin

WTO members met in Geneva on July 31 to implement a historic WTO trade agreement that incorporated special provisions for developing countries, allowing for the staggered implementation of trade standards and tailored technical assistance to meet these standards. Of course, this did not happen as India chose to block the WTO consensus needed to implement the agreement unless its food security issues are addressed.

India’s decision to stall out Bali progress has raised concerns that the WTO will not be able to implement the Bali agreement at all. A coalition of 25 developing and developed countries, including Australia, Thailand, and Canada, has asked India to reconsider but so far India’s position has proven intractable.

Cargo inspection a the Port of Jakarta

Cargo inspection a the Port of Jakarta

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