By Sanda Ojiambo
CEO and Executive Director, UN Global Compact
Landlocked developing countries (LLDCs) face unique economic challenges due to their geographic isolation. With no direct access to seaports, LLDCs rely on neighboring countries for trade routes, increasing transport costs and reducing competitiveness. Yet, these 32 countries, with a population of 570 million, represent a growing market expected to exceed 1 billion by 2060.
A central challenge is: how can LLDCs overcome these barriers and become competitive in the global economy? The answer lies in partnerships with the private sector, mobilizing investment, and fostering growth through innovation.
Transforming Infrastructure: The Path to Prosperity
A major obstacle for LLDCs is inadequate infrastructure. The cost of upgrading LLDC road and rail systems to global standards is over $500 billion. Such large-scale investments require more than public funds¡ªprivate sector engagement is essential. Companies in infrastructure, logistics, and finance must play a key role in connecting LLDCs to global markets.
Private sector partnerships can close financing gaps, provide expertise, and improve project delivery. For instance, logistics firms can optimize transport, while tech companies can introduce digital customs platforms to reduce trade delays. These innovations help LLDCs cut trade costs and boost competitiveness.
Infrastructure is the foundation for thriving economies. Improved roads, railways, and digital infrastructure enable LLDC businesses to access markets, spurring job creation and diversification.
Driving Innovation: From Agriculture to Digital Solutions
Beyond infrastructure, innovation will propel LLDC economies forward. Traditionally reliant on primary commodities like agriculture, LLDCs must diversify into higher-value industries to ensure sustainable growth. Here, private sector investment plays a critical role.
For example, artificial intelligence and digital agriculture tools¡ªsuch as precision farming and supply chain platforms¡ªcan transform agriculture, a key sector in many LLDCs. These technologies enable farmers to increase yields, access new markets, and adopt sustainable practices, benefiting the sector and creating investment opportunities for tech firms.
Similarly, investing in digital infrastructure is crucial for LLDCs to engage in the global digital economy. E-commerce platforms can link local businesses to international consumers, while digital financial services improve access to credit for small and medium-sized enterprises (SMEs). Private sector involvement is vital to providing the technology and capital needed for these advancements.
Financing Growth: Unlocking Investment for Development
Access to finance is one of the biggest challenges for LLDCs. Foreign direct investment (FDI) has been uneven, leaving many LLDCs without the capital to fund major infrastructure projects or support SMEs. To address this, innovative financial solutions tailored to LLDC needs are essential.
Private financial institutions, development banks, and impact investors must collaborate to provide capital that supports sustainable, long-term growth. Multilateral development banks like the European Investment Bank (EIB) are developing financing mechanisms to meet these needs, but further efforts are necessary.
Expanding digital financial services can also improve access to credit, especially for SMEs in remote areas. By creating a regulatory environment that fosters innovation in fintech, LLDCs can open new growth opportunities.
The Role of the UN Global Compact
The UN Global Compact plays a crucial role in helping businesses align with global standards on sustainability and governance. By joining the UN Global Compact, companies in LLDCs gain access to resources, partnerships, and opportunities that help them navigate challenges while promoting sustainable development. Our Ten Principles guide private sector investments to not only achieve economic returns but also drive long-term growth aligned with the Sustainable Development Goals (SDGs).
Through initiatives like the Africa Business Leaders Coalition (ABLC) and the Global Africa Business Initiative (GABI), the Compact fosters partnerships that position African LLDCs as sustainable investment hubs, promoting innovation and diversification.
A Call to Action: Partnerships for a Sustainable Future
The upcoming Private Sector Forum at LLDC3 in Botswana is a once-in-a-decade opportunity to rally support and investment for LLDCs. The Forum will bring together business leaders, policymakers, and international organizations to explore ways to mobilize private sector investment and build lasting partnerships.
These partnerships are not just about financing infrastructure¡ªthey are about building a sustainable, inclusive future for the millions of people living in LLDCs. By aligning private sector goals with LLDC development needs, we can unlock new pathways to prosperity that benefit businesses and local economies alike.
The private sector must lead the effort to help LLDCs overcome their geographic isolation and turn challenges into opportunities. With the right investments, innovations, and partnerships, LLDCs can thrive in the global economy and drive sustainable development.
The road ahead demands bold action, but through collective efforts from the private sector, governments, and international partners, we can create a transformative future for landlocked developing countries.
Sanda Ojiambo serves as the Assistant Secretary-General, CEO and Executive Director of the 51³Ô¹Ï Global Compact, the world's largest corporate sustainability initiative. Under her leadership, the UN Global Compact has expanded significantly, with membership nearly doubling to over 20,000 companies.
