Frequently Asked Questions on Japan's Contribution to the United Nations Conference on Least Developed Countries

What are the UN Conferences on the LDCs?

Q1: What are the United Nations Conferences on the Least Developed Countries about?

A1: The U.N. Conferences on the Least Developed Countries (LDCs) are convened to provide an opportunity for representatives from LDCs, donor countries, international organizations and other groups gather together in order to formulate and adopt action programs for LDCs for the ensuing decade. These programs assist LDCs in trying to solve the various problems such as extreme poverty with which LDCs are struggling, thus enabling them to move their countries toward sustainable development. The first conference was held in Paris in 1981, the second also in Paris in 1990, and the third is scheduled to be held from 14 to 20 May in Brussels.

What are the LDCs?

Q2: What exactly are the Least Developed Countries?

A2: Among developing countries, the Least Developed Countries are those countries designated by resolution by the U.N. General Assembly- after deliberation by the U.N. Economic and Social Council based on criteria recommended by the U.N. Committee for Development Planning-as being particularly delayed in their development. At present, 49 countries worldwide are designated as LDCs (Africa: 34 countries; Asia: 9; Oceania: 5; Latin America: 1). (See Table 2-1, Map 2-1.)
The specific criteria for inclusion in the list of LDCs includes a GDP per capita of less than $800 and a total population of less than 75 million, according to the 1997 review of the LDC list, and a GDP per capita of less than $900 and a total population again of 75 million, according to the 2000 review.

[Table 2-1] Least Developed Countries (49 countries)

Africa (34):
Angola, Benin, Burkina Faso, Burundi, Cape Verde, Central African Republic, Chad, the Comoros, Democratic Republic of the Congo, Djibouti, Equatorial Guinea, Eritrea, Ethiopia, Gambia, Guinea, Guinea-Bissau, Lesotho, Liberia, Madagascar, Malawi, Mali, Mauritania, Mozambique, Niger, Rwanda, Sao Tome and Principe, Sierra Leone, Somalia, Sudan, Togo, Uganda, Tanzania, Zambia, Senegal

Asia (9):
Afghanistan, Bangladesh, Bhutan, Cambodia, Laos, Maldives, Myanmar, Nepal, Yemen

Pacific Islands (5):
Kiribati, Samoa, Solomon Islands, Tuvalu, Vanuatu

Latin America (1):
Haiti

[Map 2-1] The distribution of LDCs in the world

Past UN Conferences on the LDCs

Q3: What kinds of issues were discussed at the previous two LDC conferences? Also, have the action programs resulting from those conferences actually been carried out?

A3: At the first conference held in Paris in 1981, 155 countries, including Japan, participated, and the members unanimously adopted the Substantial New Program of Action for the 1980s for the Least Developed Countries. With the aim of assisting LDCs to overcome the absolute poverty in their countries, achieve self-reliant growth, and develop the capacities to meet basic needs for daily life, the 1981 conference considered modalities of development, including international cooperation necessary to achieve the goals mentioned above in a variety of fields.
At the 1990 conference also convened in Paris, 147 countries, including Japan participated, and the conference unanimously adopted the Program of Action for the Least Developed Countries for the 1990s. The conference discussed and approved policies for international assistance to LDCs based on the premise that LDCs should also carry out their own self-help efforts.
The first two action programs have been assessed as not being fully carried out. However, with the various problems engulfing the LDCs continuing to accumulate, it is essential that representatives from the LDCs, donor countries, and international organizations meet together again at one venue, and it is expected that the discussions at the third LDC conference will be of certain benefit for the development of LDCs.

The 3rd UN Conference on the LDCs

Q4: What kind of issues will be discussed at the third LDC conference? Also please provide some information about the various parallel events that are also scheduled to be held.

A4: The third conference will be convened from 14 to 20 May in Brussels as a ministerial-level conference with UNCTAD acting as the Secretariat and the EU hosting the conference. In addition to assessing the results on a national level of the Program of Action for the LDCs for the 1990s adopted at the second conference, the upcoming conference is expected to adopt the Program of Action for the LDCs for the Decade 2001-2010, which will incorporate national and international policies and measures for the sustainable development of LDCs and their integration into the global economy.
In addition to the plenary session that will adopt the above-mentioned action program, various sessions on good governance, agriculture, education, security, energy, international trade and investment, human resources development, infrastructure development, etc. are scheduled.
Moreover, roundtable discussions on business sector and other topics, as well as meetings on the digital economy, inter-city cooperation, which will be attended by mayors and town leaders from LDCs and non-LDCs among others are scheduled as parallel events.

Japan's Contribution to the LDCs

Q5: What kind of contribution is Japan making to the third LDC conference?

A5: Japan participated in the first (July 2000) and the second (February 2001) Intergovernmental Preparatory Committee Meetings for the third conference and will join the third such meeting scheduled in April. Through this involvement, Japan has been actively and positively contributing to the formulation of the Program of Action for the LDCs for the Decade 2001-2010.
In addition, Japan has been supporting the deepening of discussion for the development of LDCs, for example, by providing the funds for the holding of the Meeting on Gender from 21 to 23 March, which was one of the run-up events for the upcoming LDC conference.

Q6: Japan is the biggest ODA donor country, but what about its contributions to LDCs?

A6: Japan is currently the top donor country in the world for nine consecutive years since 1991 (see Graph 6-1, Graph 6-2, Table 6-1). For LDCs as well, Japan is also a major donor country (see Table 6-2). Among ODA schemes, there are bilateral assistance, which is provided directly to developing countries, and assistance that is extended through international organizations. In its bilateral assistance, Japan provides grant aid, technical cooperation, and loans known as yen loans. In particular, the share of grant aid, through which funds are provided for specifically agreed purposes without imposing an obligation for repayment, to LDCs and other developing countries suffering from severe fiscal conditions is increasing (see Table 6-3, Graph 6-3).
Moreover, The untied ratio for Japan, 96.4% (1999) is very high (see Table 6-4, Graph 6-4).Untied aid is assistance for which there is no restriction on the source of procurement of goods and services necessary for the implementation of a project; the "untied ratio" is the percentage of untied projects among all projects (except technical assistance).

Trade between Japan and the LDCs

Q7: Is there very active trade between Japan and LDCs?

A7: Geographically, many LDCs are in Africa. Although Japan is located in Asia, the amount of Japanese imports from LDCs compares somewhat favorably with that from other major developed countries. International trade not only allows LDCs to gain foreign currency but it also assists their development. Because Japan imports goods from LDCs, Japan is also contributing to the development of LDCs (see Graph 7-1).

Q8: What are preferential duties for LDCs? Is it true that the EU is adopting a progressive policy on preferential duties for LDCs?

A8: The policy of preferential duties for LDCs sets very low duties for, and gives favorable treatment to, products from LDCs in order to eliminate restrictions in trade that products from LDCs face from importing countries (because of obstacles on the consumption side in importing LDC products, LDCs have been unable to increase exports).
The EU has put forward an Everything but Arms Initiative, which eliminates tariffs and quotas on all products from LDCs except arms. Import duties and quotas are to be abolished for all products other than 25 arms and ammunitions products, bananas, sugar, and rice are being treated as exceptions, with the EU deeming that these products will be released in stages from 2002 to 2009.
The report from the Tariff Council states that it is appropriate to implement a new system that enables the Government of Japan to designate separately products originating in LDCs for duty free and quota free treatment. By this measure, about 99% industrial products, including all the textile and clothing products, from LDCs will be duty free and quota free. This measure will be implemented from 1st April 2001. The Tariff Council also states that the Government of Japan should enable substantial increase in import under duty-free and quota-free treatment from the LDCs by increasing the number of items under such treatment while taking account of progress in the WTO new round of negotiations and impact on domestic industry. Therefore, Japan is greatly opening its doors to products from LDCs.

Q9: Japan recently held the Okinawa Workshop on Capacity Building for Trade in March. Could you give us some details about the workshop?

A9: From March 2 to 4, the Okinawa Workshop on Capacity Building for Trade was held in Nago City in Okinawa Prefecture jointly by Japan, WTO, UNDP, and OECD/DAC.
At the first session, discussion was focused on the Integrated Framework (IF) for Trade-related Technical Cooperation to LDCs created by six international organizations (World Bank, IMF, WTO, ITC, UNDP, and UNCTAD). It was noted that the bilateral assistance should be coordinated and that the integrated approach be pursued. The second session focused on "agreement by agreement" approach; the third session on the "country by country" approach; and the fourth session on the future direction of efforts for capacity building, based on the discussions held in the previous three sessions.
This workshop was very unique in that it allowed persons from different backgrounds involved in development assistance and trade from advanced countries, developing countries, and international organizations to meet under one roof and exchange views, and it was highly evaluated by the participants as a new approach in this field. It is expected that the results of the Okinawa workshop will be reflected in the third LDC conference in May and other international conferences in the future.

Japan's Position and the LDCs

Q10: What are the Heavily Indebted Poor Countries (HIPCs)?

A10: Heavily Indebted Poor Countries are the world's poorest developing countries with the heaviest external debt burden. In 1996, the IMF and the World Bank set forth the following criteria for designating HIPCs.
1) Per capita GNP in 1993 was less than $695.
2) Net present value debt-to-export in 1993 was more than 220% or net present value debt-to-GNP was more than 80%. As of March 2001, 41 countries are designated as HIPCs ( see Table 10-1 ).

[Table 10-1] What is HIPCs ?

Heavily Indebted Poor Countries (HIPCs) are the developing countries, which are the poorest and have the heaviest external debt burden. In 1996, IMF and the World Bank designated HIPCs by the following standards.

(1) Per capita GNP in 1993 was less than $ 695.
(2) Net present value debt-to-export in 1993 was more than 220% or net present value debt-to-GNP was more than 80%. As of March 2001, 41 countries are designated as HIPCs

As of March 2001, the following 41 countries are designated as HIPCs.

• Middle East and Africa: 34 countries
  Yemen, Somalia, Ethiopia, Ivory Coast, Mali
  Kenya, Uganda, Rwanda, Ghana, Burkina Faso
  Burundi, Tanzania, Mozambique, Liberia, Benin
  Madagascar, Zambia, Angola, Senegal, Guinea-Bissau
  Democratic Republic of Congo, Republic of Congo, Central Africa, Guinea, Mauritania
  Cameroon, Sudan, Togo, Malawi, Sao Tome and Principe
  Chad, Niger, Sierra-Leone, The Gambia
• Latin America: 4 countries
  Guyana, Bolivia, Honduras, Nicaragua
• Asia: 3 countries
  Vietnam, Myanmar, Laos

(Note) If a country is recognized as a Heavily Indebted Poor Country, the country becomes a candidate of the enhanced HIPC Initiative. However, the following conditions must be met.

(1) The debt burden is unsustainable even after the full application of traditional debt relief measures;
(2) Prefer debt relief to new money;
(3) Implement structural adjustment programs of the World Bank and the IMF, and establish satisfactory track record;
(4) Making a PRSP (Poverty Reduction Strategy Paper).

Therefore, the enhanced HIPC Initiative is expected to be applied to some 20 countries among 41 HIPCs.

Q11: What is Japan's basic position toward the debt problems of HIPCs? Considering that Japanese citizens' precious tax money is spent on the debt relief for the HIPCs, should the government be careful about writing off all debts unilaterally?

A11: Difficulties facing the HIPCs must not be left unaddressed both for humanitarian reasons and from the view point of ensuring the peace and stability of the international community. Japan believes that prompt and effective implementation of the debt relief initiative for HIPCs (Extended HIPC Initiative) agreed upon at the Cologne Summit in June 1999 is an urgent task.
Agreement was reached at the Kyushu-Okinawa Summit that the G8 and financial institutions would strengthen their efforts for accelerated and effective debt relief for HIPCs and that 20 countries would reach their Decision Points by the end of year 2000. As a result, by the end of last year, 22 countries-more than what has been set as a target-were decided eligible for the enhanced HIPC Initiative. Japan's contribution to the debt relief of these 22 countries will come to approximately $3.8 billion, one of the largest contribution among the G7 countries (see Graph 11-1).