Lima — The Least Developing Countries conference organised by UNIDO and hosted by the Government of Peru opened today 30 November 2013 in Lima under the theme "From the Istanbul programme of action to the world we want in 2015 and beyond".
The two-day event brings together more than 250 participants, including ministers from LDCs in charge of industry, representatives of relevant UN agencies, regional economic commissions, emerging countries' institutions, donors and private sector entities. The event will help promote the implementation of partnerships that will bring sustainable livelihoods and inclusive welfare for LDC's citizens. It seeks to leverage various potentialities and mechanisms available in the domain of private sector and SMEs development, productive capacity building, trade and employment.
The conference is set to deliberate during various sessions the role of BRICS and other emerging economies for inclusive sustainable growth of LDCs and South-South industrial cooperation: The role of southern enterprises in Least Developed Countries. A session is dedicated to Inclusive and Sustainable Industrial Development (ISID) for LDCs where ECA presented the African LDCs perspectives.
ECA stressed that the experience of de-industrialisation in many developing countries, especially LDCs has occasioned the need to look afresh at the nature of industrial development. The mega-trends in the globe today, present opportunities and challenges for LDCs. Majority of them are today experiencing a youth bulge; rapid urbanization; the global production networks are more connected and a country's place in these value chains can no longer be taken as given or for granted; and the international instruments - be it those agreed multilaterally have not delivered on expected outcomes and where that has happened, it has not been in an optimal way.
Though Africa's GDP was growing at a fairly encouraging rate of 5 per cent in 2012, and is set to continue to grow roughly at least at that rate or more in the next years, generating sufficient employment for the growing cohorts of young entrants in the labour market remains not only a challenge, but also a top priority throughout the region. Yet, over the medium term, the youth bulge puts Africa in a position to benefit from opportunities offered by this "demographic dividend". This can only happen if the economies generate sufficient jobs and which are decent.
Industrial development that is inclusive and sustainable is one that is transformative. For the LDCs, transformational industrial development is one that leads to a complete change in the structure of the economies. This changed structure must be seen in production, factor markets, and also in the trade structure among others.
The continent's growth has not translated into significant structural transformation. Industrialization has largely bypassed African economies, exports remain typically concentrated on a narrow range of products with little or no value addition. In reality, African countries have tended to remain confined to the low end of global value chains, even in those sectors where they actually display positive revealed comparative advantages such as agro-food, hard commodities and fuels.
Some of the determinants that can make industrial development inclusive and sustainable according to ECA are: (i) the need to go back to the basics - the simplicity of comparative advantage that can be maximized through developmental states that foster competitive advantages. An example of the basics is commodity-based industrialisation as one pathway for inclusive and sustainable industrial development. The ECA has published a report on this in the case of Africa; (ii) tailored industrial policy processes and mechanisms. What works in one country or region might not work in another country. The ECA thesis is that this is what has made the difference where Industrialisation has transformed economies and not in others; (iii) international policies and instruments must be revised, or discarded where they do not promote inclusiveness and sustainability and replaced with frameworks that work; (iv) regional integration is crucial for the LDCs. Regional integration has an inclusive dimension to it. In fact, regional integration can enable LDCs insert themselves in the global value chains through Industrialisation; (v) domestic resources mobilization are crucial to making industrial development sustainable. LDCs have to agree that it is only them that can finance their development. The global partnership for development, as exemplified by MDG 8 has not delivered and going forward, it cannot be relied upon. In Africa, the AfDB is setting up the Africa50 fund to finance Africa Agenda 2063 in which transformation through Industrialisation is a key anchor.
