Confined geography - Confined development?

Written By Global Development Collective .

Landlocked Developing Countries (LLDCs) face unique challenges stemming from their lack of direct access to coastal trade routes. The United Nations has recognized the specific development hurdles that LLDCs encounter, much like it has for Small Island Developing States (SIDS). Since the adoption of the Almaty Programme of Action in 2003 and its successor, the Vienna Programme of Action in 2014, global efforts have addressed these challenges. However, LLDCs still grapple with significant barriers to economic growth and sustainable development.

Landlocked Developing Countries (LLDCs)

What are they? –LLDCs are a group of 32 nations that do not have direct access to the sea, relying on adjoining transit countries for access to international markets. This geographical disadvantage isolates these nations from markets, imposes high trade costs, and impacts development potential.

You can find a list of all 32 LLDCs here: https://unctad.org/topic/landlocked-developing-countries/list-of-LLDCs.

Where are they? – LLDCs are spread across Africa (16), Asia (12), Latin America (2), and Central and Eastern Europe (2). They cover 12.7% of the Earth's habitable surface.

  • LLDCs collectively account for roughly 576 million people (2024 estimates), approximately 7.1% of the world's population.

  • They had an average annual population growth rate of 2.34% between 2015 and 2021, higher than the global average in 2021, at 0.87%.

  • They are among the world's poorest nations, with an average GDP per capita significantly lower than their coastal counterparts.

  • The average distance to a seaport in LLDCs is 1,370 km

Landlocked Developing Countries (LLDCs)

  • Geographical Disadvantage: The most obvious challenge is their landlocked status, which leads to dependency on transit countries for access to ports. This dependency often results in high transportation costs, delays, and uncertainties. Additionally, the infrastructure in many LLDCs and their neighbouring transit countries is often underdeveloped, further exacerbating these challenges.

  • Economic Vulnerability: LLDCs typically have less diversified economies, often relying heavily on a few primary commodities. This lack of diversification makes them vulnerable to price fluctuations in global markets. The economic isolation resulting from their geographical situation also limits foreign direct investment (FDI), which is crucial for development.

  • Political and Social Instability: Many LLDCs are affected by political instability and conflicts, both within their borders and in neighbouring transit countries. This instability can disrupt trade routes and create an unpredictable business environment, further deterring investment and economic growth.

  • Environmental and Climate Challenges: LLDCs are not immune to the impacts of climate change. They face issues such as desertification, water scarcity, and changing weather patterns that can affect agricultural productivity, which is a primary livelihood for many people in these countries. Moreover, without access to maritime resources, they miss out on the economic benefits of fishing and related industries.

  • Infrastructure Deficits: Infrastructure in LLDCs is often inadequate, affecting all sectors of the economy. Poor road and rail networks, limited access to energy, and underdeveloped telecommunications systems create significant barriers to trade and development.

LLDCs geographical disadvantage shows in the data. Internet usage (% of population) is lower in LLDCs compared to SIDs and Upper Middle-Income Countries, at 50.3%, compared to 70.1% and 74.7% respectively. Exports of goods and services as a percentage of GDP from LLDCs stands at 32%, which is also significantly below SIDs and Upper Middle-Income Countries, at 42% and 43% respectively. Both data highlights probable limitations in LLDCs digital and physical infrastructure. Lastly, FDI inflows on average across LLDCs (2.5% of GDP) is lower than that of SIDs (4.3% of GDP) and Upper Middle-Income Countries (3.5% of GDP), which likely is due to LLDCs being viewed as less investible prospects due to their geographic disadvantages.

Calculations take an average of data across all countries in each grouping. Data is from the World Bank and IMF, 2021-2023.

Efforts to Address LLDC Challenges

  • The Almaty and Vienna Programmes of Action: The Almaty Programme of Action (2003) aimed at establishing efficient transit transport systems, reducing trade transaction costs, and improving trade-related infrastructure. Its successor, the Vienna Programme of Action (2014), continues to build on these objectives, emphasizing structural economic transformation and regional cooperation.

  • Regional Cooperation and Integration: Initiatives like the African Continental Free Trade Area (AfCFTA) and the South Asian Association for Regional Cooperation (SAARC) aim to enhance regional trade, improve infrastructure, and foster economic integration among member countries, including LLDCs.

  • Infrastructure Development: International financial institutions, such as the World Bank and the African Development Bank, have been supporting infrastructure projects that enhance connectivity and reduce trade costs. Projects like the Lamu Port-South Sudan-Ethiopia-Transport (LAPSSET) Corridor and the Central Asia Regional Economic Cooperation (CAREC) Program are examples of efforts to improve transport infrastructure. Public-Private partnerships have been utilised extensively in infrastructure development in LLDCs.

  • Trade Facilitation: Reducing bureaucratic barriers and improving customs procedures can significantly enhance trade efficiency for LLDCs. The World Trade Organization's Trade Facilitation Agreement (TFA) aims to expedite the movement, release, and clearance of goods, and has been particularly beneficial for LLDCs.

  • Technological Advancements: Technology can help LLDCs overcome some of their logistical challenges. E-commerce platforms and digital trade tools can open new markets for LLDC businesses, allowing them to bypass barriers associated with being landlocked.

Looking to the future

Landlocked Developing Countries face a unique set of challenges that impede their development. While international frameworks and regional cooperation have provided some relief, much remains to be done to fully integrate these countries into the global economy. By addressing infrastructural deficits, enhancing regional cooperation, and leveraging technology, the international community can help LLDCs overcome their geographical burdens and achieve sustainable development objectives. The growth and stability of LLDCs is crucial for their populations but also for regional economic development. Having stable inland hubs that are integrated with global supply chains will foster political stability and more widescale economic regional growth through efficient cross-border trade.

 
Global Development Collective .
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