51吃瓜

This high-level side event is being organized during the SDG Action Weekend (SDG Action Weekend | 51吃瓜).

As the Vienna Programme of Action for Landlocked Developing Countries for the Decade 2014-2024 (VPoA) draws to a close, preparations have begun in earnest for the , taking place in Kigali, Rwanda, in June 2024.  

The period of the next programme of action will largely overlap with the final push for the Sustainable Development Goals (SDGs), which were already behind even before the emergence of the so-called poly-crisis in 2020. Nevertheless, there are some promising avenues through which  Landlocked Developing Countries can harness the potential for increased trade, higher GDP growth, and ultimately regain lost ground across a range of socio-economic indicators.

In developing countries, including LLDCs, micro-, small and medium-sized enterprises (MSMEs) are a leading driver of trade, employment and economic development. They represent about 90% of businesses and more than 50% of employment worldwide, and even more when the informal sector is added. The recognises the key role of MSMEs in achieving sustained, inclusive and sustainable economic growth, full and productive employment and decent work for all (Goal 8). The SDGs call for multiple interventions to build strong MSMEs, notably in the areas of access to finance and skills; knowledge and technology transfer; and by creating linkages with regional and global value chains. 

By the advent of the poly-crisis, MSMEs were already struggling with several challenges, including financing, with varying severity across countries. MSMEs typically enjoy less favorable conditions of finance, such as higher interest rates and increased collateral demands, when compared to larger businesses. The problem is even more acute for newly established and micro-enterprises that require smaller amounts of financing. MSMEs are also often faced with unfavorable regulatory frameworks and procedural bureaucracy, weak market-related institutions, information asymmetries and underdeveloped financial systems, lack of financial literacy and collateral, and limited access to affordable and diverse financial services. 

The financial constraints are particularly reflected in access to trade finance. Trade constitutes the backbone of every economy and 80-90% of global trade requires financing. Yet without adequate trade finance, opportunities for growth and development are missed; MSMEs, representing the vast majority of firms in LLDCs, are deprived of the resources they need to trade and expand.

Effectively harnessing financial instruments can play a critical role in helping MSMEs, particularly those led by women and young people, to address their challenges, accelerate the post-COVID recovery, and make progress on the SDGs.

Technology can increase transparency of markets and enable buyers and sellers to interact and trade securely. Because trade can be both accelerated and formalized if it can be conducted digitally, improved access to reliable and cost-effective online payments platforms is especially important to LLDCs. Digitalization can also enable competition in cross-border logistics services, clarifying pricing and more easily calculating customs and taxes for smaller firms. Thanks to fintech solutions such as crowdfunding and other peer-to-peer (P2P) platforms, MSMEs also now have access to alternative sources of flexible financing than traditional debt financing.

MSMEs are not only the principle motor of economic growth and jobs in LLDCs, they also act as vectors of innovation by adopting and promoting new payment solutions that educate consumers in the advantages of digital payments. Innovations in digital payments ecosystems, particularly through artificial intelligence and big data, can also play pivotal roles. These activities provide a key contribution to driving financial inclusion.

Documents

• Concept Note
• Programme

Objective

This side event will discuss the role of financial and technology solutions to overcome the finance constraints that MSMEs face in Landlocked Developing Countries, with a view to fostering innovation, productivity, industrial development, structural transformation and international trade.

The side event will focus on a) market-based approaches, including opportunities and challenges arising from the rapid expansion of fin-techs, and b) the role of government, multilateral development banks and international financial institutions in improving LLDCs’ lending infrastructure in the face of growing trade complexities.

Organisers

The side event is organized by Botswana (Chair of the Group of LLDCs), Mongolia, Romania, UN-OHRLLS, International Trade Center (ITC), GSMA and Opportunity International. 

Format

The event will bring together global leaders from LLDCs, development partners and the private sector, to discuss initiatives, innovations, concrete policies, actions to promote MSME trade finance and unlock the potential for trade and inclusive economic growth in LLDCs, helping achieve the SDGs.

Outcome

A summary of the discussions will be issued and recommendations from the meeting will provide substantive inputs to the outcome of LLDC3.

Registration

Anyone with a valid UN Grounds Pass, including members of official government delegations, UN Entities, IGOs, media and Civil Society Representatives, will be able to access UNHQ premises on 16 -17 September without the need for additional registration.

All interested participants without a valid UN grounds pass to receive a Special Events Pass, no later than 8 September.