By Deodat Maharaj
GEBZE, Türkiye, Nov 14 2025 (IPS)

Artificial intelligence (AI) is rapidly changing our world. It has helped a few companies in developed countries set record-breaking profits. Last month, Nvidia, a leading US AI company, hit a market value of USD 5 trillion.

Nvidia, together with the other six technology companies known as the Magnificent Seven, reached a market capitalisation of USD22 trillion. This value easily eclipses the combined GDP of the world’s 44 Least Developed Countries (LDCs), Small Island Developing States and Landlocked Developing Countries.

These businesses continue to make massive investments in this transformational technology. Not only are investments being made in AI for the future, but benefits are also already being reaped as it accelerates global commerce and rapidly transforms markets.

According to the World Economic Forum, AI is streamlining supply chains, optimising production, and enabling data-driven trade decisions, giving companies a big competitive edge in global markets.

Thus far, the beneficiaries have been those living in the developed world, and a few developing countries with high technological capacities, like India.

By and large, developing countries have lagged far behind this technological revolution. The world’s 44 LDCs and the Small Island Developing States are those that have been almost completely left out.

According to UNCTAD, LDCs risk being excluded from the economic benefits or the AI revolution. Many LDCs and Small Island Developing States struggle with limited access to digital tools, relying on traditional methods for trade documentation, market analysis, and logistics. This is happening as others race ahead.

This widening gap threatens to marginalize these countries in international trade and underscores the urgency of ensuring they can participate fully in the AI-driven global economy.

AI holds transformative potential for developing countries across sectors critical to economic growth and trade. The World Bank has noted that in agriculture, AI-driven tools can improve crop yields, forecast market demand, and enhance supply chain efficiency. It can also strengthen food security and export earnings. In trade and logistics, AI can optimize operations, reduce transaction costs, and help local producers access new markets.

Beyond commercial applications, AI can bolster disaster preparedness, enabling governments and businesses to allocate resources efficiently and minimize losses. The use of AI can be a game changer in responding to massive natural disasters such as the one caused by Hurricane Melissa in Jamaica a few days ago.

Despite these opportunities, the poorest and most vulnerable countries face significant hurdles in accessing and benefiting from AI. The International Telecommunications Union has noted that many countries lack reliable electricity, broadband connectivity, and computing resources, impeding the deployment of AI technologies. This is compounded by human capacity constraints and limited fiscal space to make the requisite investments.

Given this, what is the best way forward for the world’s poorest and most vulnerable countries? Firstly, policy and governance frameworks for leveraging AI for development transformation are urgently, and we can learn from others.

For example, Rwanda, a leader in the field of using technology to drive transformation has developed a National Artificial Intelligence Policy. Another example is Trinidad and Tobago, which recently established a Ministry of Public Administration and Artificial Intelligence.

Secondly, capacity building, especially for policy leaders, is key. This must be augmented by making the requisite investments in universities and centers of excellence. Given the importance of low-cost and high-impact solutions, building partnerships with institutions in the global south is absolutely vital.

Finally, financing remains key. However, given the downward trends in overseas development assistance, accessing finance, especially grant and concessional resources from other sources will be important. Consequently, international financial institutions, especially the regional development banks, have a critical role to play.

Since the countries themselves are shareholders, every effort should be made to establish special purpose windows of grants and concessional financing to help accelerate adoption of relevant, low-cost, relevant and high-impact AI technological solutions.

In an adverse financing environment, achieving the above will be difficult. This is where Tech Diplomacy comes in and must be a central element of a country’s approach to foreign policy. This will be the subject of another piece.

In summary, AI is shaping and changing the world now. For the poorest and most vulnerable countries, all is not lost. With strategic investments, forward-looking and inclusive policies, and international cooperation via Tech Diplomacy, AI can become a powerful tool for their sustainable growth and development.

Deodat Maharaj, a national of Trinidad and Tobago, is presently the Managing Director of the United Nations Technology Bank for the Least Developed Countries. He can be contacted at: deodat.maharaj@un.org

IPS UN Bureau

Follow @IPSNewsUNBureau
  

Least Developed Countries account for less than 1 percent of world trade. Credit: Ali Mkumbwa/Unsplash

By Deodat Maharaj
GEBZE, Türkiye, Aug 22 2025 (IPS)

Artificial intelligence and the use of frontier technologies are already transforming trade and boosting prosperity, particularly for developed and some developing countries. This ranges from the digital exchange of documents, the digitalisation of trade processes and leveraging online platforms to fast-track cross-border trade.

The rapid adoption of new technologies will further consolidate the dominance of world trade by developed economies, which currently account for roughly 74 percent of global trade, according to the United Nations Conference on Trade and Development (UNCTAD). The world’s 44 Least Developed Countries (LDCs), with a population of an estimated 1.4 billion people, are seeing a different trajectory altogether. According to the World Trade Organisation, they account for less than 1 percent of the world’s merchandise trade. LDCs continue to reel from the relentless onslaught of bad news, including increased protectionist barriers.

Deodat Maharaj, Managing Director of the United Nations Technology Bank for the Least Developed Countries.

UNCTAD has estimated that tariffs on LDCs will have a devastating consequence, possibly leading to an estimated 54 percent reduction in the exports from the world’s poorest countries.

In this dire situation, exacerbated by declining overseas development assistance, what does an LDC do to survive in this difficult trade environment?

To start with, they must continue to advocate globally for fairer terms of trade. At the same time, they need to be more aggressive in addressing matters for which they have control. Otherwise, the status quo will leave their people in a perpetually disadvantageous situation. Imagine paying three times more than your competitors just to ship a single crate of goods across a border. For millions of entrepreneurs in the world’s LDCs, it is the everyday cost of doing business. Technology offers a way out in reducing these high costs.

Indeed, when the international community gathered in Sevilla for the Fourth International Conference on Financing for Development (FfD4) in July 2025, one truth stood out: Technology is no longer a luxury—it is a prerequisite for effective participation in global trade. The outcome document was clear that for the world’s 44 LDCs, bridging infrastructure gaps, building domestic technological capacity, and leveraging science, technology, and innovation are vital to unlocking trade opportunities.

So, given the challenges and opportunities, what forms the core elements of an action agenda for LDCs to leverage trade to generate jobs and opportunities for their people?

Firstly, there is a need to pivot to digital solutions, which can dramatically reduce trade costs and open new markets. According to the World Bank, paperless customs and single-window systems have been proven to cut clearance times by up to 50 percent, reducing bureaucracy that stifles commerce. In Benin, automating port procedures reduced processing time from 18 days to just three days (World Bank). E-commerce platforms, when paired with secure payment systems and targeted training, have shown remarkable potential.

Secondly, invest in digital infrastructure. The data suggest that LDCs still have a lot of catching up to do. The solution is for development partners and the international financial institutions to steer more resources in this area with a fixed percentage of resources, say, 15 percent of a country’s portfolio dedicated to boosting digital infrastructure.

Thirdly, focus on value addition and reduce transition away from the export of raw commodities. This in turn requires the human resource capacity to spur innovation and creativity. Boosting investment in research and development can pay rich dividends.

According to the World Economic Forum, LDCs invest less than 1 percent of GDP in research and development compared to developed countries. The Republic of Korea invests 4%.

Finally, for LDCs to enter the technological age, their businesses must lead the way. It is difficult to do so in some countries like Burundi, where internet penetration is a mere 5 percent of the population. The average internet penetration is around 38 percent. So, in addition to digital infrastructure, support must be provided to micro-, small and medium-scale enterprises to benefit from the opportunities provided by technology to boost trade, thereby creating jobs and opportunities. This includes the establishment of incubators to support this business sector, boosting their technological capacities to trade and profile their businesses on digital platforms, and helping them to deliver services created by the digital economy. Rwanda has been a pioneer in this regard.

Of course, technology alone will not address all the challenges faced by LDCs. However, by delivering cost-efficient solutions, it can help level the playing field and drive transformation. It is time for the international community and development partners to back their words with action in helping LDCs advance this agenda. Since LDCs represent an emerging market of 1.4 billion people, when they rise, everyone else will rise with them.

Deodat Maharaj, a national of Trinidad and Tobago is the Managing Director of the United Nations Technology Bank for the Least Developed Countries and can be reached at: deodat.maharaj@un.org

Follow @IPSNewsUNBureau
  

By Deodat Maharaj
GEBZE, Turkiye, Feb 17 2025 (IPS)

The 4th International Conference on Financing for Development could catalyse coordinated action to close the financing gap and set the stage for a STI-driven transformation in the world’s poorest countries.

The stark reality is that just over 250 weeks remain to go before the end of the decade, marking the endgame for achieving the Sustainable Development Goals (SDGs). With less than a fifth of the Goals on track, the Least Developed Countries (LDCs) or the world’s poorest countries urgently need bold, innovative financing for science, technology and innovation (STI) to re-set their development trajectories and salvage the 2030 Agenda.

In June/July this year, the Spanish city of Seville will host the 4th International Conference on Financing for Development, or FfD4. The last such summit was held in Addis Ababa, Ethiopia in 2015, the same year the SDGs were agreed.

Since then, the development financing gap has widened as has the divide between the richest and poorest countries across the globe. The financing gap – the amount of money required to achieve the SDGs and the resources that have been committed – is now estimated at $4.2 trillion annually.

The silver lining could be golden for the world’s most vulnerable

Notably, this past decade has seen astonishingly rapid developments in STI, spanning areas such as biotech, artificial intelligence, machine learning, green technologies and satellite connectivity. These breakthroughs, largely driven by digital technologies, have created immense wealth for a few.

According to Oxfam, five individuals will reach trillionaire status before the close of 2029, while the number of people living in poverty has remained stubbornly high since 1990. Yet for the 700 million people in the margins, this progress has not translated into better opportunities.

For them, these developments in STI could be truly transformational. There’s no better time than now to close the inequality gap and harness these assets for the benefit of all.

“There is nothing more powerful than an idea whose time has come”- Victor Hugo

The concept of a dedicated global fund for STI has never been fully operationalized at scale, but the idea is not new. The United Nations, UNESCO, the World Bank, the African Union, the G77 and China have all proposed the idea of an STI funding pool, suggesting growing momentum and backing for such a mechanism.

However, it is important to push the envelope and make the case for such a fund exclusively for the LDCs. June/July’s high-level summit on financing for development could provide the coordination and impetus it needs to get started. With the key global players in attendance, this summit could be a pivotal moment to bring the idea of a STI fund to life.

The 2024 Pact for the Future and its associated Global Digital Compact along with the Doha Programme of Action offer the policy foundation and moral imperative for such an initiative.

What the world’s 44 least developed countries (LDCs) need.

A global fund for STI should focus on financing three priorities: Boosting the capacity of institutions in LDCs; closing the skills gap; and creating an enabling environment for STI to flourish.

Economic resilience and structural change depend upon strong productive capacity which is driven by equally strong national institutions that can effectively implement pro-growth strategies and technology. Tech transfer and skills building will only support development if a country’s institutions can take advantage of the technologies they need. This aligns with the imperative to upskill and reskill workers in LDCs.

With just under half of their citizens having no access to electricity and only a third able to access the internet, it is imperative that countries are supported with vital, enabling development infrastructure. Additionally, a grant financing facility to bolster centres of excellence in the Global South would enable countries to effect game-changing outcomes in critical areas such as climate change, agriculture, and business development.

Why a global STI fund is a smart investment

Investing in the tech capacities of LDCs is not only a moral obligation but makes good business sense. High levels of inequality limit access to education and skills, undermining social mobility and economic growth in the world’s 44 LDCs. Rapid economic growth and development in these countries – with their massive market of over one billion people – represents an equally massive opportunity for countries in the global South and also for developed countries.

Investing in a dedicated STI fund would pave the way for long-term sustainable development in LDCs, providing opportunities for collaboration, harnessing the talent of their youthful populations and opening up new markets.

The Financing for Development summit as a catalyst for coordinated action

This decade began with a global pandemic that wrought havoc on economies worldwide, particularly the most vulnerable. Those who didn’t have the buffers to bounce back continue to struggle to meet basic development objectives and as a result, the SDG promises of 2015 remain elusive.

The 4th International Conference on Financing for Development presents a unique opportunity to focus on STI as an essential driver for development. The summit could catalyse coordinated action to close the financing gap and set the stage for a STI-driven transformation in the world’s poorest countries.

As we approach the final stretch of the 2030 Agenda, the need for solutions has never been more obvious. Investing in a global STI fund for LDCs is not just about making a big difference for the people in the poorest and most vulnerable countries, it also makes good business sense.

Deodat Maharaj is the Managing Direct0r of the United Nations Technology Bank for the Least Developed Countries and can be reached at: deodat.maharaj@un.org

IPS UN Bureau

Follow @IPSNewsUNBureau
  

The 2025 Annual Meeting of The World Economic Forum will take place at Davos-Klosters from January 20-24. The meeting brings together government, business and civil society leaders to set the year's agenda for how leaders can make the world a better place for all. It's relevance as a global gathering sits within and beyond the official programme. The importance of dialogue — often happening in private conversations — reveals an ever important mission to convene leaders when 'threats to world stability are multiplying'.

By Deodat Maharaj
GEBZE, Türkiye, Jan 15 2025 (IPS)

“It was the best of times; it was the worst of times.” Charles Dickens is more relevant today than ever.

The wealthy and powerful are meeting again this year in glamorous Davos, at an invitation-only event. They arrive in chartered aircraft and private jets to speak about our warming climate, among other global concerns.

The super-rich, politicians and celebrities gather for the World Economic Forum’s annual meeting later this month at a time when global inequity is at its highest. Last year saw a phenomenal growth of wealth in major economies with valuations of at least eight companies exceeding the trillion-dollar mark.

On the other hand, those at the margins are barely scraping a living and preoccupied with where their next meal is coming from. Globally, 733 million people are facing hunger, and 2.33 billion are food insecure. The situation is most dire in the 44 Least Developed Countries (LDCs).

Based on the data, it is getting worse for people living in the poorest and most vulnerable countries. According to Oxfam, the wealthiest 1% own almost half of the world’s wealth, while the poorest own just 0.75%. In addition to inequality, geopolitical tensions and external threats, including climate change are rising. At the same time, the global economic outlook remains subdued.

The 2025 theme for Davos, ‘Collaboration for the Intelligent Age,’ is particularly timely for wealthy countries as they reap rich dividends due to rapid technological advancements. Equally, the theme holds profound significance for people living in LDCs, where new and relevant technologies can permanently alter their development trajectory.

However, only 36% of their citizens have access to the internet, and digital infrastructure is weak. So, if we care about a more equal world, a necessary first step is to focus on the reality of those living on less than $1.90 a day.

In terms of solutions, the Davos gathering should look at concrete and practical ways to help these countries with financing and technical expertise to reduce this alarming gap where poor people are not just left behind but are completely left out.

The summit agenda outlines five priorities and their rationale – all pertinent for LDCs if the will, financing, and collaboration can be mustered.

Reimagining growth: The World Economic Forum notes that the digital economy has the potential to account for up to 70% of the new value generated globally in the next ten years.

This potential and attendant economic benefits will reside overwhelmingly in the wealthiest countries. Nonetheless, the digital economy provides an outstanding opportunity for the poorest countries to leapfrog in their development gains.

With support through technology transfer, financing, and capacity building in the LDCs, their development trajectory can change, creating new jobs and opportunities for their people.

Industries in the intelligent age: This thematic focus is invariably on the world’s largest businesses and economies. However, there is much that big business can do to help grow a global economy where everyone benefits. Sharing best practices and investing in LDCs are prime examples of ways to promote a more equitable transition into the tech future.

Business has an important role to play in enhancing the presence of these countries in global supply chains. They can also support small and medium enterprises by boosting their productive capacity at the domestic level. However, this has not happened thus far, and the time to change the focus is now.

Investing in people: Globally, education systems are struggling to adapt to fast-changing technologies, with just 54% of countries having digital skill standards. However, in the world’s poorest nations, 260 million people of primary and secondary school age did not attend school in 2020.

As long as LDCs spend more on servicing their external debt than on education, this appalling inequality will not change. Using low-cost, high-impact technologies to build human capital in LDCs is fundamental. There is much the wealthiest countries can do in this critical area.

Safeguarding the planet: Large pockets of the world’s poorest are starving due to climate-induced disasters and food insecurity. Climate financing action is vital for LDCs, which contribute less than 4% of global emissions but bear some of the most severe impacts of climate change.

Existing technologies, as well as new and emerging technologies that can help predict climate change and manage disasters, should be transferred to those who need it most. And of course, the developed world must meet its commitments on financing for climate action.

Rebuilding trust: There is much talk about global collaboration and multilateralism – at a time of rising global inequality and increasing isolationism. Davos could do well to foster greater inclusivity and, in doing so, build this much-needed trust and hope.

Those with great wealth and influence also have a great responsibility. Unless the World Economic Forum’s annual summit focuses on the more than one billion people living in the world’s poorest countries, it will remain an echo chamber for the privileged.

A global future rooted in equity, shared prosperity, and collective resilience is not only possible but essential for us all. Davos 2025 must seize the opportunity to redefine itself as a true forum for global progress.

Deodat Maharaj is Managing Director of the United Nations Technology Bank for the Least Developed Countries (LDCs) and can be reached at: deodat.maharaj@un.org

IPS UN Bureau

Follow @IPSNewsUNBureau
  

The African Continental Free Trade Area (AfCFTA) is a potential game-changer for promoting Africa’s inclusive growth and sustainable development. Credit: United Nations Office of the Special Adviser on Africa

By Deodat Maharaj
GEBZE, Türkiye, Dec 11 2024 (IPS)

Africa, the world’s youngest continent is brimming with creativity, talent and innovation. With more than 60% of its population under the age of 25, Africa’s youth are fueling entrepreneurship and job creation across the region.

Over the past five years, the number of businesses and start-ups has grown by 20% with 2021 seeing a record US$2.15 billion in tech investments. There are now more than 1,000 tech hubs across Africa catalysing digital, social and economic transformation and rewriting its development narrative. This is the story of Africa’s future, brimming with optimism.

Despite challenges, sub-Saharan Africa has made remarkable progress towards digital transformation. A World Bank report cited a 115% increase in Internet users between 2016 and 2021 while 191 million additional Africans made or received a digital payment between 2014 and 2021. 

Africa’s cities are also the fastest-growing and youngest in the world – and changing rapidly. This urbanisation coupled with The African Continent Free Trade Area (AfCFTA), the world’s largest free trade zone in terms of number of countries, create unparalleled opportunities for development and economic integration, according to the African Development Bank.

Harnessing Africa’s demographic dividend for economic growth

Across the continent, young entrepreneurs are tackling deep-rooted development challenges in sectors from healthcare and education to agriculture and finance:

Rwanda has just launched a HealthTech accelerator hub. This accelerator aims to advance health innovations across Africa to solve some of the continent’s health challenges, particularly in low-income and underserved communities. Etudesk, a Côte d’Ivoire-based Ed-Tech company, is an interactive platform designed to make professional training more accessible.

The platform offers a wide range of online courses in Business, IT, Economics, Civil Engineering, and Sciences. In Uganda, a young woman engineer has designed a backpack with solar-powered torches, so that students are able to study at night.

In Botswana, Brastorne Enterprises connects nearly 5 million underserved Africans across four countries to vital information using a suite of products that deliver internet capabilities to feature phones.

Mobile money platforms are flourishing with Africa hosting nearly half of the world’s mobile banking services and accounts. Zambian fintech company eShandi is on a mission to serve millions of unbanked adults in sub-Saharan Africa by leveraging artificial intelligence and mobile technology to break down traditional banking barriers, such as credit history checks.

It’s recently expanded its services to Kenya, South Africa and Zimbabwe and is a clear example of how technology has enabled communities in developing countries to leapfrog traditional service infrastructure.

As one commentator noted: ‘Banks’ customers don’t need face-to-face contact in Africa because they’ve never had it.’ Money transfer not only benefits individuals – it also benefits business and unlocks new forms of economic growth.

Technology, the enabler

Inclusive technology has the power to transform the lives of Africa’s 1.48 billion citizens and the potential to eradicate poverty. It can help bridge the education divide and expand access to healthcare. It can boost economic growth and foster new employment opportunities. And it can promote greater transparency in governments and improved public sector productivity – all good news for investors.

Yet there are very real barriers to overcome. Less than 40% of Africans have broadband internet access and rural areas are poorly served, while inadequate infrastructure and high data costs restrict connectivity. The global average for internet access stands at 66.2%.

In Least Developed Countries (LDCs) , the average smartphone costs 95 per cent of an average monthly income, making online access inaccessible to most.

The continent also faces a skills gap and gender disparity, with women disproportionately excluded from digital opportunities. The International Finance Centre estimates that some 230 million jobs in Sub-Saharan Africa will need digital skills by 2030. Closing these gaps is not just an opportunity, it’s an imperative for Africa.

Policy and partnerships

If the continent is to capitalize on its youthful entrepreneurship, it needs a policy environment that fosters and quickly delivers digital infrastructure development. It also requires focused investment in education with curricula integrating science, technology, engineering and mathematics and exposure to frontier technologies at an early age.

Partnerships are vital too, including with companies and universities both within the region, and internationally. Centres of excellence, which link academia and business also have an important role in promoting local solutions and creating that vital link between research and industry.

There are excellent best practices in Africa and in the Global South, so it is about time they start connecting and collaborating on a systematic basis. Of course, establishing and deepening partnerships with Centres of Excellence in the developed world will continue to be important.

Achieving these goals call for scaled up financing and collective effort from governments and development partners with business playing a vital role. Support to young entrepreneurs in the tech sector must be accorded a high priority since they have already demonstrated that even with the deck stacked against them, they can deliver innovation, creating jobs and opportunities for the continent.

Looking ahead, policy makers have a clear choice. Either it is business as usual or create the environment with incentives to let youth and innovation deliver on the promise of Rising Africa.

Deodat Maharaj is the Managing Director, United Nations Technology Bank for the Least Developed Countries and can be reached at: deodat.maharaj@un.org

IPS UN Bureau

Follow @IPSNewsUNBureau
  

Credit: Emdadul Islam Bitu / UNDP Bangladesh

By Deodat Maharaj
UNITED NATIONS, Nov 8 2024 (IPS)

The Paris Agreement on climate change is a decade old this month. While there has been progress – with new net zero pledges and new technological solutions, we are still grappling with the reality that global temperatures continue to soar. 2023 was the hottest year ever on record.

This alarming trend poses grave consequences for the world’s 45 Least Developed Countries (LDCs). These countries bear the brunt of the burden from the climate crisis even though they are the lowest carbon emitters on the planet. According to the World Bank, over the last decade, the world’s poorest countries have been hit by nearly eight times as many natural disasters, compared with three decades ago, resulting in a three-fold increase in economic damage.

Changing weather patterns, increasing droughts, flooding, crop failures, deforestation and sea level rise matter hugely to LDCs, which are largely agricultural economies. When climate change threatens farming productivity, the overall outlook for the people in these poor countries becomes even bleaker.

Policymakers meeting in Azerbaijan later this month for the United Nations Climate Change Summit (COP 29) urgently need to deliver on the financial, technical, and capacity building support that LDCs need to address the climate crisis. There is precious little time left.

Delivering results in these core areas with financing could make a difference:

Scale up early warning systems

Firstly, we need to scale up early warning systems linked to satellites and weather stations that can help forecast severe weather events such as cyclones, flooding, and droughts. Despite evidence that getting clear information on time can save both lives and livelihoods, the current capacity for monitoring and forecasting across Africa is low and in need of investment.

Early warning systems also need engagement from communities for communication and coordination and the technical training of local stakeholders to maintain and monitor them. In Fatick, in Senegal, for example, early results of a collaborative pilot project to forecast extreme heat show increased awareness and behaviour changes among the community and improved preparedness by the local health system.

Leverage cutting edge technology

Secondly, we need to leverage technology such as boosting access to climate modelling powered by artificial intelligence and big data analytics. This can provide important insights into long-term climate trends, identify patterns, and predict future changes. CLIMTAG-Africa, which is part of the Copernicus Climate Change Service, currently offers climate information for three African countries: Malawi, Mozambique, and Zambia with plans to expand it further.

The tool provides users with accessible climate information to support decisions about what crops to plant and when to plant them – vital to economies where small-scale subsistence farming is the norm. Similarly, it is about replicating and coming up with cost-efficient and relevant impact technological solutions in agriculture so salt-water resistant strains of rice can be planted in countries affected by sea level rise such as The Gambia.

Provide real-time weather data

Thirdly, we need to invest in low-cost, high impact innovations to provide real-time weather data and advice that can be readily shared. In Mali, the ‘MaliCrop’ App has become an essential resource for farmers in this drought-affected country. By accessing the app, farmers can receive forecasts and information in French and several local languages about weather predictions and even crop disease risks.

The project is used regularly by over 110,000 people. However, although mobile phone penetration is increasing in low-income countries, mobile infrastructure, and internet connectivity, particularly in rural areas, is lagging behind and is a barrier to access.

These are promising examples which will only have an impact if properly scaled up and supported. However, acutely limited access to finance remains a major obstacle especially for the LDCs. According to the 2023 UNFCCC Adaptation Finance Gap Update, the costs of adaptation for LDCs is estimated at US$ 25bn per year – or 2 per cent of their GDP. Actual financing to these already fiscally constrained and largely highly indebted countries falls woefully short of what is needed.

A decade ago, COP 21 in Paris offered LDCs much hope. Since then, the world’s poorest and most vulnerable countries are no better off in terms of financing. However, advancements in technology, including AI, provide a glimmer of hope. To deliver results for LDCs, COP 29 must commit to more funding, scaled-up technology transfer, strengthened partnerships and relentless capacity-building.

The people in the poorest and most vulnerable countries cannot continue to absorb the hits wrought by the developed world’s carbon emissions. The choice is clear, agreement on an action agenda for LDCs or a COP-out where everyone loses.

Deodat Maharaj is the Managing Director, United Nations Technology Bank for the Least Developed Countries and can be reached at: deodat.maharaj@un.org

IPS UN Bureau

Follow @IPSNewsUNBureau
  

Deodat Maharaj, Managing Director of the United Nations Technology Bank for Least Developed Countries

By Deodat Maharaj
UNITED NATIONS, Oct 18 2024 (IPS)

Last month, world leaders gathered at the time of the UN General Assembly in New York and agreed on a pioneering Pact for the Future. This global accord has implications across a broad range of issues that affect every country. It offers much hope for the poorest and most vulnerable countries on the planet, known as Least Developed Countries (LDCs).

The world’s 45 LDCs are home to a billion people who face systemic underdevelopment marked by poverty, inadequate health systems, poor infrastructure and limited access to education and technology.

While some progress has been made during the last decade, less than a fifth of the Sustainable Development Goals (SDGs) are on track to be met. For example, only around 60% of children in least developed countries complete primary school despite improving literacy rates across the globe. Healthcare disparities are also stark, with maternal mortality rates averaging 430 deaths per 100,000 live births in low-income countries compared to 13 per 100,000 in wealthier nations.

The Pact for the Future, along with its two annexes, the Global Digital Compact and the Declaration on Future Generations, offers an inclusive roadmap aimed at accelerating progress towards the SDGs. By also leveraging advancements in science, technology and innovation, the framework seeks to dislodge decades of stagnation and inequality.

Bridging the massive digital divide, which is most pronounced in poor and indebted countries, will be critical for accelerated progress. Only 36 percent of people in LDCs are connected online, and buying a smartphone costs 95 percent of an average monthly income. In general, low-income countries also have a lower level of educational attainment and fewer trained professionals in science, technology, engineering and mathematics.

The Pact for the Future outlines several key commitments: On digital cooperation, the Global Digital Compact presents targeted actions for a safer, more inclusive, more equitable digital world by closing the digital divide and expanding inclusion in the digital economy.

On sustainable development and financing for development, the Pact reaffirms the 2030 Agenda and places the eradication of poverty at the centre of efforts to achieve it. Amongst the proposed actions, it pledges to close the SDG financing gap and strengthen efforts to address climate change, which is disproportionately impacting LDCs.

On financial reform, the Pact seeks an overhaul of global financial systems, including by granting developing countries a greater voice in decision-making. It seeks to mobilize additional financing for the SDGs and generally making finance more readily available. The Pact also addresses the unsustainable debt burdens of many LDCs.

This novel Pact for the Future has the potential to give a push to the development agenda across the developing world, but especially so in LDCs. However, for success, there are some prerequisites. Firstly, there is the matter of financing.  It is good to see the welcome emphasis on boosting financing for developing countries and making it more accessible.  With finance, the possibilities are unlimited. Without finance, progress will once more be stymied. Therefore, the international community must match words with action.

Secondly, the role of business as an essential partner is key. A government-centric approach on its own cannot and will not work. More specifically, there must be attention to the micro, small and medium-scale enterprises sector, which accounts for the majority of businesses and generates the bulk of employment in most developing countries. Systematic support for digitalisation, innovation and the application of technology to this sector will create jobs and opportunities whilst boosting inclusive growth.

Thirdly, multilateralism is vital. The Pact for the Future has enormous potential, with the power to materially shift the dial for least-developed countries. However, it will require international cooperation, sustained political will and strong accountability mechanisms. If realised, this bold initiative could become the catalyst for new technological investments that can help shape an equally bold future for the world’s poorest.

At its core, the UN’s Pact for the Future is a blueprint for renewed cooperation in a fragmented world and offers much hope. There may not be another such opportunity. Let us seize the moment.

Note: Deodat Maharaj is the Managing Director of the United Nations Technology Bank for Least Developed Countries and can be contacted at: Deodat.Maharaj@un.org

IPS UN Bureau Report

Follow @IPSNewsUNBureau
  

A woman walks in the street of Roseau, capital of Dominica, which has struggled to overcome the severe impact of two category 5 hurricanes which tore through the region in September 2017. Credit: UNICEF/Moreno Gonzalez

By Deodat Maharaj
UNITED NATIONS, Jun 8 2018 (IPS)

As a new hurricane season approaches in the Caribbean, I attended last week’s dialogue focused on “Financing Resilience in SIDS” held in Antigua and Barbuda and sponsored by the host government and Belgium.

The gathering sought to identify the main risks facing Small Island Developing States (SIDS), especially in terms of financing and innovative solutions to the countries’ challenges.

These vastly different SIDS have much in common. There was a clear recognition that the splendor of their beauty, wealth of their culture and vibrancy of their people mask a deep vulnerability to both natural disasters and economic shocks, which are further exacerbated by climate change.

This is true for Caribbean countries and beyond. In addition to the Caribbean, participants at the event last week also included representatives from Africa, Indian Ocean and the Pacific, from their Permanent Missions to the UN.

The hurricanes of last September 2017 that devastated our host, Antigua and Barbuda, and other Caribbean countries provided a compelling testimonial to this “new normal”. Dominica lost 226 percent of its GDP and a generation of development gains in a matter of hours with the passage of Hurricane Maria.

In our host country, the island of Barbuda endured a similar fate just 10 days earlier after Hurricane Irma left a path of destruction. The story is very much the same in other SIDS, such as Vanuatu and Fiji, which suffered massive losses from Cyclones Pam and Winston in 2015 and 2016 respectively.

Notwithstanding the compelling narrative of adverse weather events, there are also other challenges, which hamper the ability to build resilient Small Island Developing States. As a UNDP presenter, I emphasized that resilience in the context of SIDS should be holistic and not exclusively associated with hurricanes and natural disasters.

The outcome document, “The St John’s Call for Action” clearly recognized that building resilience in the Caribbean is about managing the risks associated with natural disasters, but this entails much more than hurricanes, as our Human Development Report for the Caribbean also stressed.

One big challenge is accessing finance. SIDS are largely classified as middle or high-income countries with limited access to concessional financing and Overseas Development Assistance (ODA).

This is compounded by high levels of debt in places such as the Caribbean, which is one of the world’s most highly indebted regions. Indeed, its debt burden stands at an estimated $52 billion with a debt to GDP ratio of more than 70 percent. In some countries, debt levels are more than 100 percent of GDP.

At the same time, due to the small geographical and population size, SIDS invariably have a narrow tax base, limiting the ability to mobilize resources domestically. Mindful of these constraints, the St John’s Call to Action made some specific recommendations.

The role and importance of innovation was placed at the forefront on the way forward. Peter Thomson, the UN’s Special Envoy for Oceans made a compelling case for the blue economy—or boosting sustainable use of the ocean’s resources for gains in the social, economic and environmental realms—as a viable policy option.

The example of Seychelles and the launch of the World’s first Blue Bond was cited. Such Blue Bonds will help mobilize public and private resource to advance the Blue Economy, including through sustainable fisheries.

It was also noted that UNDP has started preparatory work to help Grenada launch a Blue Bond as well, which will be the first in the Caribbean. The outcome statement was clear on the importance of focusing on the green economy and transition to renewables.

Recognizing that innovation is required in financing, a call was made to rethink the role the diaspora plays in building resilience and providing the financial resources. In the Caribbean, remittances exceed foreign direct investment and ODA combined.

I made the point that the region needs to facilitate approaches that orient remittances toward investment instead of almost exclusively on consumption. Based on the experience of SIDS and the huge costs of recovery post disasters, the importance of new insurance products to help manage the risks faced by SIDS is a key issue.

The ”St John’s Call for Action”spoke to the need for sustained global advocacy for the recognition of SIDS’ vulnerability as a criterion to access concessional financing. At the same time, there must be a clear recognition that to attract the financing to build resilience and reach the SDGs, private capital is essential.

Attracting it is hard work; and creating an enabling environment is a necessary first step. Caribbean SIDS must work hard to improve the ease of doing business and lower energy costs, which represent major obstacles to attracting foreign direct investment. SIDS representatives also agreed on the importance not only of getting additional financing but also on the value of intensifying collaboration between and among the countries. UNDP with its global expertise and access has key role to play.

Therefore, teaming up, building partnerships and sharing innovative experiences, including through the UNDP-backed Aruba Centre of Excellence Sustainable Development of SIDS is a crucial and urgent step. There is no magic pill or easy solution.

The “St John’s Call for Action” by its very nature emphasized that the time to talk is over; the time to act is now. UNDP will continue to be a strong partner of SIDS, together, in the same boat.

Excerpt: