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Will The Number of the World's Poorest Nations Shrink?

By Ramesh Jaura

BRUSSELS, May 20 (IPS) - European Commissioner for Development Cooperation Poul Nielson expects in the coming years a reduction in the number of least developed countries (LDCs), which has almost doubled to 49 in the last three decades.

Nielson was taking stock of the seven-day long Third UN Conference on the Least Developed Countries (LDC-III), hosted by the European Union. The conference ended Sunday in Brussels.

The EU Development Commissioner draws his optimism from the agreement achieved on the ''critical role'' of ODA in support of LDC development. The so-called Brussels political declaration notes that the industrialised nations will not ''spare any effort to reverse the declining trends of ODA''.

This and the effect of debt cancellations within the framework of the enhanced Heavily Indebted Poor Countries (HIPC) Initiative will have a positive impact on the situation of LDCs, Nielson said.

The Brussels declaration adopted Sunday, expresses the concern that the external debt overhang that affects most LDCs remains a main obstacle to their development.

''We affirm the commitment to provide the full financing and the speedy and effective implementation of the enhanced HIPC Initiative, which is essential for freeing domestic budgetary resources for poverty reduction.''

Since the 1999 Cologne Summit of seven major industrial nations - Britain, France, Germany, Italy, Japan, Canada and the United States - decisions on easing the debt burden have been taken on a total of 22 countries. Seventeen LDCs are already profiting from this exercise. They will be given a nominal debt service relief of some 23 billion dollars.

Estimates are that the HIPC initiative will free funds equivalent to 1.2 percent of the LDCs' Gross Domestic Product on an average. This in turn would enable the LDCs to spend more on health and education.

This, according to Nielson, is another reason for his optimism that by the time the fourth conference of LDCs is held in about ten years from now, the number of the world's poorest countries would have gone down.

In the Brussels declaration, the donor nations have also undertaken to make expeditious progress towards full cancellation of outstanding official bilateral debt within the context of the enhanced HIPC Initiative.

They said they would also provide debt relief to post-conflict countries within the flexibility provided under the HIPC framework.

This, according to the Netherlands Development Cooperation Minister Eveline Herfkens, is a significant step towards a new partnership for development. ''It is important to immediately provide peace dividends.''

The donor nations go a step further and promise to continue to review the debt sustainability of LDCs, including those who do not belong to the group of highly indebted poorest countries. In fact, ''consideration may be given to granting a moratorium on debt service payments in exceptional cases''.

A senior official of the German Economic Cooperation Ministry, Professor Michael Bohnet, director-general in-charge of development policy, shared EU Development Commissioner Nielson's optimism.

In an interview with IPS, he said: ''Already today there is a large spectrum of economic and social indicators among the 49 LDCs. I am of the view that some countries will be very successful and in a position to leave the group of LDCs.''

This view did not appear to be fully shared by the UNCTAD Secretary-General Rubens Ricupero, who had organised the LDC-III. Whether the number of LDCs will have declined when LDC-IV is held would depend on the global economic environment in general and the commodity prices on which the LDCs very much depend.

Sharing Ricupero's scepticism, Bangladesh's Commerce Minister Abdul Jalil - who spoke on behalf of the 49 LDCs at the closing plenary session - said though the Programme of Action was welcome, only its implementation would show the success of LDC-III.

Jalil proposed a regular monitoring of the implementation of the Programme, so that it does not meet the same fate of the Paris action plan which was hardly implemented. The result was that the number of LDCs went on increasing.

However, Ricupero said, the conference had already delivered before it began. The industrialised nations had agreed to untie financial cooperation with the LDCs - which would enable them to buy know-how and equipment anywhere they wished to, and not necessarily in the country providing ODA.

Also the EU's Everything But Arms Initiative, which gave the LDCs free access to markets of the developed countries, had gone a long way in creating an atmosphere of mutual cooperation instead of confrontation, said Erfkens.

The Dutch Development Cooperation Minister chaired an interactive thematic session Sunday on financing growth and development. The session was co-chaired by Rwanda's Foreign Minister Donald Kaberuka.

Herfkens expressed the hope that the ranks of countries fulfilling their promise of spending 0.7 percent of their GNP would swell. Until now, only Denmark, the Netherlands, Sweden, Norway and Luxembourg have reached or exceeded the ODA target.

Herfkens pleaded for a ''predictable and transparent'' relationship between the donor nations and developing countries - a relationship in which ''each one of us does the necessary homework'' instead of pointing an accusing finger.

This would also determine whether the number of LDCs goes down in the coming years. (END/IPS)