TOPICS : Single export dependency bad for Asia’s poorest
Asia’s poorest countries are facing a mounting challenge to benefit from the international free-trade regime due to the lack of diversity in their export sector, says a senior UN official.
According to Anwarul Chowdhury, the UN under-secretary-general for the least developed countries (LDCs), landlocked developing countries and small island developing states, high dependency on one product — namely garments - has shut these nations out from tapping global markets. This dependency, he added, also prevents poor countries from taking advantage of the fall in trade barriers to get their other exports into the developed world.
These countries have become more vulnerable following the end of the Multifibre Arrangement (MFA) in December, Chowdhury pointed out during an interview with IPS. That arrangement created a quota system, enabling poor countries to capitalise on their cheap labour to produce clothes for markets in the US and Europe.
Bangladesh is typical among the poor nations coming to grips with this shift. “Developed countries need to take into account the weaknesses and vulnerabilities of least developed countries,” he added. “If not, the free market environment will prove hostile for LDCs.” Bang-ladesh, in fact, was among the leaders of the region’s poorest nations that focussed on the garment and textile sector to boost its exports.
Cambodia, an LDC in South-east Asia, offers numbers that are higher - 87 percent of the country’s exports are attributed to garments and textiles, according to a 2005 report on the region’s economies released last month by the Economic and Social Commission for Asia and the Pacific (ESCAP), a regional UN agency.
In other LDCs like Nepal, garments make up 50 percent of annual exports, while in Laos it’s 48 percent and the Maldives 32 percent.
China, with its army of cheap labour, seems to be gaining the most, because of the relocation of garment factories there. India, too, has emerged as another beneficiary. The 14 LDCs in the Asia-Pacific region are Afghanistan, Bangladesh, Bhutan, Burma, Cambodia, East Timor, Kirbati, Laos, Maldives, Nepal, Samoa, Solomon Islands, Tuvalu and Vanuatu. There are 50 LDCs across the world.
This week, at a regional conference for Asia and Pacific countries in Bangkok, Chowdhury called on the US government to help those 14 countries in the same way Washington has stepped forward to help the weak economies in Africa.
The US government should have an Asian version of the African Growth and Opportunity Act (AGOA), he told the meeting, which included government officials from Asia’s LDCs. Under that arrangement, Africa’s poorest countries have been guaranteed preferential access to the huge US market.
The lack of such support would drive down further the already low growth figures in the Asian LDCs, said another UN official. That would make it difficult for them to meet the development targets, including the aim to reduce global poverty by half in 2015. —IPS