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DEVELOPMENT: Market Forces Rise Above Declarations

Sanjay Suri

ISTANBUL, May 12 2011 (IPS) - Upstairs in halls where the conference of the Least Developed Countries (LDCs) is being held, all the right things were being said about the misery of poverty and the virtue of opportunity and development. Several floors below, what are called ‘market forces’ were at work.

Turkish section of the private sector bazaar packed with goods targeted at LDC buyers. Credit: Sanjay Suri/IPS

Turkish section of the private sector bazaar packed with goods targeted at LDC buyers. Credit: Sanjay Suri/IPS

And these forces have undermined almost all of the grand declarations at the conference.The declarations about the LDCs invariably sound right; it’s the doing that is wanting.

A battery of Turkish companies set up stalls at a bazaar here, eager to sell to businesses from the LDCs. Many managers from these companies had received financial assistance to come to Istanbul to look at the goods on offer. This was the “private sector track” of the conference – that ran parallel to the talking at the meetings.

In fairness, stall space was set up also for each of the LDCs. The Turkish section, however, had been packed with goods on offer; the LDC section sat almost completely vacant, to the extent that most countries had not even a desk and chair. These wouldn’t have been necessary, because there was no one there.

The private sector bazaar is a symbolic expression of the dramatic imbalance that delegates upstairs spoke of, and attempted in vain to overcome

It was a snapshot of decimated private enterprise in the LDCs.

“The private sector is very much underdeveloped in a number of LDCs,” World Trade Organisation (WTO) Deputy Director General Valentine Rugwabiza told IPS. “You do have a very dynamic private sector in Bangladesh, but you can’t say you have the same in a number of African LDCs.”

She pointed to the stark contrast in approach between the LDCs and Turkey. “The private sector in the LDCs needs a far closer partnership than what is currently the case,” she said. “And the country that is hosting this conference is an excellent example of that.

“I was amazed how the private sector and the government are working shoulder to shoulder,” Rugwabiza said. “It’s impressive, the way they meet with their governments and key ministers. And the government provides solutions within two weeks.”

Many countries have private sector organisations that organise groups with common interests, Rugwabiza said. Or they have industrial groups pushing their governments and following negotiations and sending clear signals to their governments on what their industries can accept, what they can offer, and what they can’t bear.

Traditionally the LDC governments have not been business oriented, Rugwabiza explained. And that is at the heart of the imbalance.

As are business patterns that keep the LDCs suppliers of raw materials. “We want a situation where the LDCs can export furniture, not wood,” Martin Khor, executive director of the Geneva-based South Centre told IPS.

The LDCs have few finished goods to offer: according to U.N. figures, trade accounts for 70 percent of the gross national income of the LDCs, but almost three-quarters of total merchandise exports from the LDCs are of just a handful of products.

Home to more than 700 million people, the LDCs have long been seen as suppliers of raw materials and markets for finished products.

The export bazaar here at the congress centre in Istanbul offered a vivid picture of just what companies are looking to sell. A number of Turkish companies were offering hospital beds and equipment – a business seen as promising in countries with high levels of disease and scarce medical infrastructure.

A wide range of consumer goods was on offer as well – from high fashion dresses to ornate home decor. Many of these goods were aimed clearly at the few well to do among the LDC populations, the fraction of the 700 million that is middle class or more.

The Bangladeshi stall was a virtual island of bustling activity amidst the deserted spaces of the other LDCs.

“The fact is that we are hoping very soon to come out of our category as a Least Developed Country,” Nasreen Awal Mintoo, president of the Women Entrepreneur Association of Bangladesh told IPS.

Much of that growth is being led by the private sector, she said. “The private sector in Bangladesh are doing really a lot. It is because of the private sector that Bangladesh is growing faster. And women entrepreneurship is growing fast, and that is helping Bangladesh to grow.”

Perhaps the empty spaces on the LDC side of the great bazaar may need to be filled by the private sector – with the strong involvement of women – rather than through talks at international conferences.

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