Bangkok--10 Nov--ESCAP
ESCAP research outlines ways to generate export opportunities for Asia’sLand Locked Developing Countries
Asia’s Land Locked Developing Countries (LLDCs)need a stable investment-friendly and competitive macroeconomic policyframework, the United Nations Economic and Social Commission for Asia andthe Pacific (ESCAP) said Tuesday, calling for action to promote economicdiversification in order to reduce volatility of economic and exportgrowth.
“Policies must maintain a competitive exchange rate, neutralizingtendencies toward appreciation and a stable macroeconomic environment withfavorable credit conditions for the promotion of new economic activities,”explained United Nations Under-Secretary-General and Executive Secretary ofESCAP Dr. Shamshad Akhtar, during the launch of the EconomicDiversification in Asian LLDCs: Prospects and Challenge report at theSecond United Nations Conference on LLDCs, in Vienna, Austria.
ESCAP’s research shows empirical evidence that the more diversified theeconomy, the higher its GDP and the lower the competition it faces inglobal markets. Compelling results in the new report reveal thatdiversification moves in short steps rather than large jumps and thatdiversification is a path dependent process. What a country produces todayinfluences what sectors can emerge or develop in the immediate future.
“Some pathways can lead to new products, further diversification andimprovement in a country’s productive capacity, whilst other paths spin offrelatively fewer opportunities, providing less potential for economicgrowth and diversification,” added Dr. Akhtar during ESCAP’s Side Event onLLDCs Diversification.
Recognizing these challenges, ESCAP has mapped the diversification paths tosupport policymaking in promoting economic diversification. The Reportshows policymakers how to identify paths to diversification and offers amethodology for identifying diversification opportunities.
ESCAP’s analysis identifies the top export markets for potential newproducts from Asian LLDCs, along with new sectors to increase chances forsuccess in diversification. Most product diversification opportunities forAsian LLDCs exist in five industries: base metals, chemicals, machinery andelectrical equipment, plastic and rubber, as well as textiles. Trade linkswith Europe and North America remain very important, but the Asia-Pacificregion also offers about a quarter of the export opportunities forpotential new products of these sectors.
In terms of industrial policy, ESCAP recommends that new economicactivities be promoted with the appropriate intervention, includingindustrial estates and economic zones. ESCAP also calls for Asian LLDCs tocreate a diversified, well-regulated and inclusive financial system thatprovides access to a variety of services and products in support of privateinvestment for new economic activities.
“Economic Diversification in Asian LLDCs: Prospects and Challenge makes avaluable contribution to the wider policy debates about LLDCs and will helpshape the new development agenda for LLDCs for the next decade,” the ESCAPExecutive Secretary said.
This Second United Nations Conference on LLDCs is being held from 3 to 5November 2014 in Vienna, Austria. At the Conference, participants fromgovernments of LLDCs, transit developing countries and donor countries, UNand other international organizations and the private sector have cometogether to assess the implementation of the Almaty Programme of Action(APoA), with the view to develop a new common action-oriented strategicframework for the next 10 years.