Cooperation between developing economies, also termed as “South–South cooperation”, can favourably be exploited to bring about efficient and stronger states among Least Developed Countries (LDCs).
This is one of the recommendations floated in a new UN Conference on Trade and Development (UNCTAD) report on LDCs due to be launched in Rwanda this week.
The report indicates that LDCs’ imports bill rose from US$ 42 billion in 2000 to almost US$ 144 billion in 2009, a reflection of growth and development in a significant decade.
The growth, according to the report, is a result of increased participation of LDCs in global trade.
“In order to improve their development impact, LDC governments need to formulate proactive strategies for deeper economic integration with other countries in the South,” the report suggests.
The Minister of Finance and Economic Planning, John Rwangombwa, said that Rwanda recognised the importance of partnering with other developing economies since they share similar characteristics.
“We partner with many LDC’s by sharing knowledge and experiences as well as policies in economic planning and development. We regularly send and receive delegations from countries like Togo, Zimbabwe, Burundi, DRC and others, to know how we can share ideas in trade and governance,” Rwangombwa said in an interview.
“Through the regional integration process of East Africa, Rwanda is optimistic that more economic benefits will come to it and to the region”.
Ndambe Nzaramba, the Deputy Director General of Export and Market Operations at the National Agricultural Export Development Board (NAEB), said that South-South cooperation can increase trade and overcome unfavourable conditions set by developed countries.
“Stringent conditions set by developed countries negatively dictate the pricing of imports from LDCs. Therefore, focusing on trade amongst LDCs is more tangible because they share similar challenges and can resolve to set favourable conditions amongst themselves,” he said.
According to Nzaramba, through mutual cooperation, LDCs have a chance to reduce transportation costs and other nontariff barriers, focus on specialisation and eventually promote value addition and competition.
UNCTAD recognises that Rwanda catapulted towards its vision of being a middle income country by 2020 through advances in agriculture, tourism and attraction of investors through ICT.
“Some critical challenges remain, including the availability of power and the shortage of skilled labour, but the government is taking measures to tackle them,” UNCTAD said in a press release.
It adds that the country’s securing environment with very low levels of crime, a very low incidence of corruption, a committed and development-oriented government as well as mild and pleasant climate could also be powerful attractions for many foreign investors, if they only knew about them.
As of January 1, 2011, the United Nations categorised 48 countries as least developed countries with 32 of them from Africa.