Second LDC Trade Ministers' Meeting
Dhaka, Bangladesh, 31st May - 2nd June 2003
 

Trust Fund for LDCs

1. In accordance with the recommendations of UNCTAD IX that least developed countries will constitute a cross-cutting issue in the work of UNCTAD and with the focus assigned to them in UNCTAD's technical cooperation activities, the Secretary-General has established a Trust Fund for their benefit. Member States have expressed support for this initiative and the Trade and Development Board, at its forty-third session in October 1996, invited contributions to the Fund.

2. The Trust Fund will facilitate the start-up of new activities in the four main areas of the UNCTAD, namely: globalization and development; international trade in goods and services, and commodity issues; investment, enterprise development and technology; services infrastructure for development and trade efficiency.

A. Main activities to be covered by the Trust Fund

3. The Trust Fund will be used to provide technical cooperation to LDCs in the following areas:

(a) Support for implementing macro-economic reforms, particularly in the areas of trade policy and trade diversification, and financial and fiscal sector reforms, including for the mobilization of public and private resources for development of LDCs;

(b) Strengthening export supply capacities at the national level, to produce tradeable goods and services on a competitive basis. The focus will be on improved trade and investment supporting/promoting services, including in such areas as enterprise development, enhancing the role of women in the development process, trade efficiency, and technology;

(c) Promoting participation of the private sector in development, including in the context of UNDP round tables, and organizing country-level investment promotion meetings;

(d) Assisting countries in the preparation of projects and programmes in areas which strengthen their supply capacities;

(e) Providing support for national authorities in the evaluation of existing and new programmes in the areas of trade, investment and services; and

(f) Providing support to complement national programmes normally funded by IPFs but which require rapid agency response and support (e.g. requests for assistance on debt management, WTO accession, etc.).

B. Modalities for the operations of the Trust Fund

4. An important objective of the Fund would be to seek contributions from as many countries and institutions as possible. In particular, the Trust Fund should be seen as a collective endeavour involving all States members of UNCTAD and relevant NGOs. A broad-based Fund will provide a vehicle for drawing in some non-traditional developed donor countries as well as developing countries willing to share resources and experiences with least developed countries. If their participation were to materialize, some additionality to ODA flows to LDCs may be possible.

5. The Fund will have an initial target of US $ 5 million; the aim is to secure regular replenishments so as to maintain annual expenditures at around that level. Contributions will be sought from developed countries as well as from developing countries in a position to do so.

6. The Trust Fund will also provide an umbrella for different types of contributions from interested countries. For example, developing countries could make contributions in kind, by providing experts for work in LDCs, by facilitating training of LDC nationals in relevant institutions and by promoting the exchange of successful development experiences. Triangular cooperation is another area, covering cooperation between the beneficiary LDC and a developing country financed by a donor country.

7. The Trust Fund will also aim at obtaining financing from the non-governmental sector, for example development NGOs, foundations, and private companies seeking involvement in particular areas of UNCTAD's LDCs-related work (trade-supporting services, investment, sustainable development, etc.).

8. To accommodate donor interests and procedures, contributions to the Trust Fund will be either unearmarked or earmarked.

9. There will be a "core project", financed by unearmarked contributions to the Trust Fund. Such contributions will be allocated by the Secretary-General of UNCTAD to support the above-mentioned activities on the basis of either requests by LDCs (individually and collectively) or pursuant to relevant decisions of UNCTAD IX and of the Trade and Development Board regarding expanded technical cooperation for LDCs.

10. Earmarked contributions to the Trust Fund will be allocated to specific objectives and activities agreed with the donor. Separate reporting will take place on each project.

11. Substantive and financial reporting on the "core project" will be performed annually, it being understood that it will not be possible to determine which particular activities had been funded by which donor, given the unearmarked nature of contributions.

12. The Special Coordinator for LDCs will coordinate the "core project". The Divisions of the UNCTAD secretariat will implement "core project" activities, as well as activities funded by earmarked contributions, in accordance with their substantive responsibilities. Any residual functions not covered by the Divisions will be implemented by the Special Coordinator.

13. Operations of the Trust Fund will be guided by the financial regulations and rules of the United Nations and will be carried out by the secretariat in accordance with internal arrangements for UNCTAD's technical cooperation.

14. Beneficiaries of, and donors to, the Fund will meet for consultations regarding the activities financed by the Fund at the time of the annual consideration by the Trade and Development Board of issues relating to least developed countries.

15. Information on the Trust Fund, as well as on other activities concerning LDCs, will be included on a regular basis in the secretariat's annual report on technical cooperation submitted to the Working Party on the Medium-term Plan and Programme Budget and to the Board.

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