Summary

This publication supports Australia's participation at the UN Fourth Conference on the Least Developed Countries in May 2011.

Description

This publication supports Australia's participation at the UN Fourth Conference on the Least Developed Countries in May 2011. The member countries will agree on a new 10 year program of action for the least developed countries–the Istanbul Program of Action.

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• Overview
• Supporting economic growth
• Map of LDC's where Australia provides support [PNG 325kb]
• Building human capital
• Reducing vulnerability and building resilience
• Governance

Ministerial foreword

For decades Australia and Australians have been helping to reduce the global burdens of
poverty, hunger, inequality and disease, and to achieve sustainable development for the
people of developing countries. Many countries have made extraordinary progress towards
the Millennium Development Goals through stronger economic growth and improvements
in the quality of basic services for hundreds of millions of poor people.

However, it is matter of great concern that some 880 million people in the 48 least
developed countries of the world still have few opportunities to lead full and productive
lives. These countries are still far from realising their full potential as nations in a truly
global economy.

In May 2011 in Istanbul, Turkey, Australia joins with other member countries of the United
Nations at the Fourth Conference on the Least Developed Countries in agreeing a new,
10-year program of action for the least developed countries–the Istanbul Program of
Action. This reflects the unique development challenges still facing this group of countries
and commits to new international, regional and national measures to help remove the
remaining obstacles to their economic and human development.

Australia has a substantial and growing overseas aid program–$4.3 billion in 2010–11.
Australia's aid to developing countries has doubled since 2005 and on current projections
will double again by 2015. We have kept our promises and we have kept to our timetable.

Around one-quarter of Australia's aid is currently provided to the least developed
countries. This share will grow. As I announced at the 2010 Millennium Development Goals
Summit in New York, Australia intends progressively to increase the proportion of its GNI
allocated to the least developed countries, toward a target of 0.15 per cent.

Over the five years from 2010 to 2015, based on current projections, Australia will invest
approximately $10 billion in programs supporting the development needs of the least
developed countries. This will include initiatives in education, health, food security and
infrastructure, as well as climate change adaption for small island developing states.

And Australia will continue to press for open trade because we believe that the free flow
of international trade and investment is one of the most powerful ways of lifting least
developed nations out of poverty.

Let the Istanbul conference be a real turning point. Let participating governments work
together over the coming decade to make a real difference.

The Honourable Kevin Rudd, MP

Minister for Foreign Affairs, Federal Member for Griffith

Overview

It has been 10 years since the world endorsed the Brussels Programme of Action for least
developed countries (LDCs) and 11 years since the internationally agreed Millennium
Development Goals (MDGs) were adopted. Over the past decade, Australia has helped
millions of people lift themselves out of poverty through an approach to development
assistance that aims to:

• enhance country ownership and leadership of programs
• build effective partnerships between governments, non-government organisations and
  multilateral organisations
• pay attention to small island nations, communities affected by conflict and natural
  disasters, and people who are marginalised.

However, the LDCs¹ are still a long way from achieving MDG targets and poverty reduction
goals. Structural weaknesses and difficulties in global economic integration have restricted
LDC development, exposing these countries increasingly to economic shocks. Per capita
income is extremely low, human development (including health and education levels) is
very weak and environmental vulnerability is high. As a result, only three countries have
graduated from LDC status since 1994² and the number entering the LDC category has
doubled over the past 40 years.³

Considerable challenges lie ahead. In specific terms:

• Insufficient food: Almost one billion people, primarily living in LDCs, have insufficient
  food. To meet the needs of the world's population by 2050, food production must
  increase by 70 per cent.
• Infrastructure: More than half of private firms in Africa list infrastructure as their biggest
  constraint. This particularly affects women who, on average, walk six km daily to access
  water, limiting the time available for economic participation.
• Barriers to trade: Tariffs and other constraints limit the ability of LDCs to export goods
  and services, restricting economic opportunities for local producers and service
  providers.
• Life expectancy: The average life expectancy for people in LDCs, at just 57 years of
  age–more than 12 years below the global average life expectancy–is largely a result
  of malnutrition and poor health care.
• Education: People in LDCs receive an average of just nine years education–25 per cent
  less than the global average–limiting their development.
• Climate change: LDCs are particularly vulnerable to the effects of climate change. By
  2050 the number of these countries facing water stress is expected to rise to 18, affecting
  600 million people.

Australian spending on international development assistance has
doubled over the past five years and is projected to double again by
2015. This includes:

• $5 billion on education
• $1.6 billion on women's and children's health
• $1.8 billion on food security
• $1.2 billion on climate change adaptation and mitigation, including in the 39 small
  island developing states most exposed to, but least responsible for, the impacts of
  global warming.

Australia supports all 48 least developed countries. Over the five
years from 2010 to 2015, based on current projections, Australia
will invest approximately $10 billion in programs targeting the
development needs of the least developed countries.

Australia will also work to open world markets to LDCs to enable private commerce, trade
and investment. Increased flows in these areas, accompanied by governance measures to
ensure transparency and accountability, are essential to building sustainable and resilient
economies.

Australia is committed to working towards providing 0.15 per cent of gross national income
in aid to LDCs, in line with international targets. Australia will be providing new programs
of assistance from 2011, responding to specific requests from LDCs for tailored support and
helping them tackle their unique development challenges.

Building on Australia's experience and expertise, this support will include:

International Development Association funding

• A 20 per cent real increase (for the period 2011–14) in Australia's contribution to the 16th
  replenishment of the World Bank's International Development Association (32 per cent
  in nominal US dollar terms), the primary multilateral vehicle for helping LDCs and other
  low-income countries.

Climate change

• Australia has committed $599 million over three years (2010–12) in fast-start climate
  change financing. Australia has given the highest priority to LDCs and small island
  developing states. One quarter of funding will benefit LDCs.
• This includes assistance (in 2011) to help LDCs adapt to the impacts of climate change
  through a $15 million contribution to the United Nations Framework Convention on
  Climate Change LDC Trust Fund, administered by the Global Environment Facility.

Natural resource management

• A contribution of $5 million (in 2011) to the International Monetary Fund's Topical
  Trust Fund to help resource-rich developing countries, including LDCs, manage their
  resources effectively.
• Support for improved governance and transparency in resource-rich countries (the
  majority of which are LDCs) through a contribution of $10 million over three years
  (2011–14) to the Extractive Industries Transparency Initiative, a coalition of governments,
  companies and civil society groups.

Aid-For-Trade

• A contribution of $2 million (in 2011) to the multi-donor Enhanced Integrated
  Framework. This program supports LDCs to become more active players in the global
  trading system by helping them tackle constraints to trade.

Food security

• Establishment of a $28 million West African food security and agricultural initiative
  (2011–14), drawing on the expertise of the Australian Centre for International
  Agricultural Research and the Commonwealth Scientific and Industrial Research
  Organisation, to build agricultural research capacity, improve how rural markets
  function and enhance the resilience of communities most vulnerable to food insecurity.

Through its increased commitment to LDCs, Australia is intensifying its efforts to help lift
the world's poorest out of poverty. And Australia is doing this in a spirit of partnership and
cooperation that places LDCs at the centre of their own development.

Supporting economic growth

Australia supports LDCs in building stronger, more sustainable, resilient and inclusive
economies. Through its aid program and broader trade and foreign policies, Australia
helps strengthen productive capacity of LDCs in two ways: financing investments needed
for economic growth, and developing institutions and policies needed for sustainable
development.

Key economic areas Australia supports, some of which are highlighted below, are:

• agriculture and food security
• infrastructure
• trade regional and global integration
• natural resource management (fisheries, forests, mining)
• financing for development
• private sector development
• debt relief.

Agriculture and food security

Agriculture plays a crucial role in almost all LDCs, but the sector faces significant
challenges, including climate change, environmental degradation and growing demand
from rising populations. Australia supports initiatives designed to improve agricultural
production, distribution and food security for LDCs. These include the:

• work by the Consultative Group on International Agricultural Research, Food and
  Agriculture Organisation, World Bank, World Food Programme, United Nations
  Conference on Trade and Development and other relevant international organisations
  to improve humanitarian food aid, address high food prices and promote agricultural
  productivity
• Rome Principles for Sustainable Global Food Security
• The Global Agriculture and Food Security Program, to which Australia has contributed
  $50 million in 2010 and 2011.

In total Australia has committed $500 million in new funding to food security programs
since 2008, including $100 million for programs in Africa and expects to commit $1.8 billion
between 2010–15.

In addition to contributing to global initiatives, Australia supports efforts to help the most
vulnerable in times of crisis, while laying the foundations for medium to long-term food
security. This includes increasing agricultural productivity and improving livelihoods
through rural development and social protection for vulnerable communities.

Infrastructure

A major challenge for LDCs is inadequate infrastructure for electricity, transport, information and communications technology and water.

Australia is working to improve transport infrastructure in a number of LDCs.

To expand rural electricity connections in seven central and southern provinces of the Lao People's Democratic Republic, the World Bank, with financing from AusAID, is helping Electricité du Lao implement a subsidised credit through a revolving funds mechanism targeted to poor households, especially those headed by women. The 'Power to the Poor' program will provide a loan voucher to households to reduce the cost of electrical grid connection. Activities funded by Australia under Power to the Poor are a mix of physical infrastructure, policy development and pilot projects.

Australian aid has been central to increasing access to telecommunications for people in rural Vanuatu. Australia supported the introduction of competition in telecommunications in 2008, leading to expanded mobile phone coverage, from 20 per cent of the population in 2007 to more than 90 per cent in 2010. This program continues to create new opportunities for social and family relationships, increase profitability for small and medium businesses, and enhance rural productivity.

Trade, regional and global integration

Open trade plays a critical role in increasing economic growth, reducing poverty and
meeting the MDGs. Australia helps LDCs gain fair access to its market through provision
of duty-free, quota-free market access for all LDC exports. For LDCs to take full advantage
of market access opportunities, Australia also recognises the importance of addressing
constraints to trade. Australia's aid-for-trade comprises around 15 per cent of its official
development assistance. By supporting trade development activities, Australia helps
LDCs to:

• better engage in the multilateral trading system and regional trade initiatives
• boost trade flows
• diversify trade activities
• improve economic integration, regionally and globally.

Financing for development

The lack of financial resources available to governments, businesses and households
in LDCs hampers economic growth and development. Australia supports financing for
development by:

• supporting governments to broaden their tax base and improve compliance
• supporting public debt relief initiatives and effective public financial management
• supporting governments to develop and manage private sector investment in building
  and delivering infrastructure and social services
• improving country capacity to attract and sustain private investment (foreign
  and domestic)
• strengthening the financial sector, especially improving financial services for low-income
  households and micro-enterprises and lowering the costs of international remittances.

Building human capital

Human capital (the skill sets people need to build strong and resilient economies) is the
fabric that ties societies together. Australia supports LDCs in building human capital through:

• access to education, including by supporting teaching of new skills and knowledge
• access to health care, including through treatment and vaccines and by developing
  public policy and managerial skills
• support of gender equality and women's empowerment, including through the
  development of entrepreneurial skills for small and micro enterprises
• improvements to water and sanitation.

Education

Education is critical to achieving all MDGs as well as other development outcomes.
Australia's education priorities include basic education, skills for growth and development
(focusing on increasing the number of work-ready graduates) as well as tertiary education
(focusing on higher education reform and leadership). Australia also provides scholarships
to women and men to ensure access to education. Empowering women can have a
multiplier effect on LDC development.

Australian aid is enabling 162 schools in Samoa with 38 600 students to meet minimum education service standards, by providing school fee grants. These grants have enabled the Samoan government to phase out school fees at all primary schools. This helps Samoa to achieve MDG 2 (primary education) and means poorer students, who would normally have missed out, can now attend school.

Australian aid provided 1320 teachers in 487 schools in the Lao People's Democratic Republic with teaching materials, benefiting 38 140 children. A total of 3484 tonnes of food for school-based meals were distributed to 106 653 students in 1181 schools across three northern provinces. Australian assistance in these provinces lifted enrolment rates from 73 per cent in 2006 to 89 per cent in 2009. This increase was nine percentage points greater than the national improvement.

Four hundred short and long term scholarships will be offered up to 40 African countries in 2011.

Since the 1960s Australia has offered more than 4000 scholarships to candidates from Africa. In 2010 Australia doubled the number of awards to Africa, and made them available for the first time to five West African nations (Gambia, Ghana, Liberia, Nigeria and Sierra Leone) bringing the total number of countries receiving awards to 20. Four hundred short and long-term scholarships will be offered to up to 40 African countries in 2011. By 2013 Australia will offer 1000 awards a year to African countries.

Health

Investing in health helps lay the groundwork for skilled and productive societies. As a result, it is critical for LDCs themselves to prioritise funding within their national health plans.

Australia supports LDCs' efforts to reduce child mortality, improve maternal health, combat major diseases (including HIV, malaria and tuberculosis) and tackle non-communicable diseases.

In Nepal, Australia helped reduce the under-five mortality rate from 61 per 1000 live births in 2006 to 50 in 2009. Deliveries attended by skilled birth attendants increased from 19 per cent in 2006 to 33 per cent in 2009. In Timor-Leste, where Australia remains the main donor in
health, infant mortality decreased from 60 per 1000 live births in 2003
to 44 in 2009. The percentage of
births attended by skilled health personnel increased from 35 per cent in 2008 to 46.7 per cent in 2009. The under-five immunisation rate improved from 35 per cent in 2003 to 53 per cent in 2009.

Australian funding through the United Nations Children's Fund has supported more than 300 000 orphaned or poor children in Malawi, Mozambique and Tanzania. A further 58 670 vulnerable children in Tanzania were provided with at least one form of basic support (food, nutrition, shelter, education or psychosocial) in 2009.

Australia has provided support to the Addis Ababa Fistula Hospital in Ethiopia for more than two decades, with substantial assistance of $7.3 million provided since 2000. Australian support to the Hamlin College of Midwives helps improve maternal health, particularly by preventing and treating obstetric fistula. This will increase access for women in rural areas to trained health personnel, helping to reduce the number of maternal and newborn deaths caused by complications in labour. In October 2010 the first 11 midwifery students graduated from this Australian-funded college and 53 students receiving training for four years will be
deployed over the coming years. In 2009 with Australian assistance, the hospital treated 2278 fistula patients, distributed 15 622 birthing kits to traditional birth attendants and health extension workers, and provided awareness training on preventing and treating obstetric fistula for 5677 community members.

Reducing vulnerability and building resilience

Responding to climate change and managing the adverse impacts of natural disasters
and conflicts are growing global challenges. Disasters and crises regularly undermine
development in many of the poorest countries, often with disproportionately high impacts
on the most vulnerable communities. Australia works to support LDCs to counter the impacts of disasters and crises through:

• disaster risk reduction
• responding to climate change
• social protection
• reducing the costs of international remittances
• peace-building.

Australia was a leading advocate for the inclusion of development on the Group of Twenty
(G-20) agenda under the Korean G-20 Presidency. Australia remains a strong supporter in
the G-20 of action to help developing countries reach their maximum economic growth
potential. This includes a partnership with Indonesia and Italy on resilient growth, to
reduce the impacts of crises on vulnerable communities, promote south-south knowledge
sharing and social protection, and to reduce the costs associated with international remittances. Australia will work to ensure LDCs' views are heard by the G-20.

In 2011 Australia will contribute $10 million to the Global Facility for Disaster Reduction
and Recovery, managed by the World Bank. This will support national disaster risk
reduction and climate change adaptation efforts by way of:

• hazard mapping and risk assessment
• investing in disaster-proofing infrastructure such as schools and hospitals
• building national capacity to self-manage disasters.

This funding is supporting the work of the facility in 16 LDCs.

Climate change

Australia helps developing countries to adapt to the impacts of climate change and recognises the need to prioritise assistance to the poorest and most vulnerable countries, particularly LDCs. In June 2010 Australia announced $599 million (2010–12) in fast-start climate change financing, supporting developing countries to adapt to, and mitigate, climate change. LDCs and small island developing countries are the highest priorities for this funding. Approximately one quarter of Australia's climate change funding will support LDCs, which contribute little to the greenhouse gas emissions driving climate change, but are particularly vulnerable to its impacts. Australia's support for adaptation will help LDCs develop effective responses and implement priority adaptation measures. Australia's mitigation support builds capacity to reduce greenhouse gas emissions while strengthening economic development.

Disaster risk reduction

The number of natural disasters experienced by LDCs has increased over recent decades,
devastating lives and livelihoods and reversing hard-won development and poverty
reduction gains. Disasters in 2010–including the earthquake in Haiti (which claimed more
than 220 000 lives) and flooding in 15 West and Central African nations (including Burkina
Faso, Senegal and Togo)–are a stark reminder of the urgent need to reduce disaster risks.
Recognising that much can be done to reduce the burden of disasters on developing
countries, Australia works with LDCs to reduce their vulnerability and enhance their
resilience to natural disasters.

Governance

Success in achieving sustained, inclusive and equitable economic growth, sustainable
development and the eradication of poverty depends upon good governance at national and
international levels, as well as on transparency in financial, monetary and trading systems.

Australia is helping to develop democratic societies including by:

• increasing capacity and transparency to help governments deliver better services
  to their people
• enhancing the role of civil society and media.

Australian Support through the Regional Assistance Mission to Solomon Islands (RAMSI)
has helped Solomon Islands better manage its economy and mitigate the effects of the
global economic crisis. Revenue collection increased from $72.5 million in 2007 to $123
million in 2010. The improved financial position enabled the government to maintain
spending on health and education services across the country.

Australia is committed to strengthening international law to prevent conflict and restore
peace and security. Australia supports the International Criminal Court and its goal of
ending impunity for the perpetrators of the most serious crimes. Australia has provided
assistance to states to help them ratify and implement the Rome Statute and has
contributed to the Court's Trust Fund for the Participation of Least Developed Countries.

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Footnotes

1. A country is classified as a Least Developed Country by the United Nations if it meets three criteria:

• low-income (three-year average GNI per capita of less than US $905, which must exceed $1,086 to leave the list)
• human resource weakness (based on indicators of nutrition, health, education and adult literacy)
• economic vulnerability (based on instability of agricultural production, instability of exports of goods and
  services, economic importance of non-traditional activities, merchandise export concentration, handicap of
  economic smallness, and the percentage of population displaced by natural disasters).

LDCs at the time of publication are: Afghanistan, Angola, Bangladesh, Benin, Bhutan, Burkina Faso, Burundi,
Cambodia, Central African Republic, Chad, Comoros, Democratic Republic of the Congo, Djibouti,
Equatorial Guinea, Eritrea, Ethiopia, Gambia, Guinea, Guinea Bissau, Haiti, Kiribati, Lao People's Democratic
Republic, Lesotho, Liberia, Madagascar, Malawi, Mali, Mauritania, Mozambique, Myanmar, Nepal, Niger, Rwanda,
Samoa, Sao Tome and Principe, Senegal, Sierra Leone, Solomon Islands, Somalia, Togo, Tuvalu, Sudan, United
Republic of Tanzania, Vanuatu, Uganda, Yemen, Zambia.

2. Countries that have graduated from LDC status are Botswana (1994), Cape Verde (2007) and the Maldives (2011).

3. The number of LDCs has increased from 24 in 1971, to 48 countries in 2011.