Despite significant technological improvements in transport, landlocked countries in Africa and Asia continue to be less developed than countries that border the sea. While the poor economic performance of landlocked countries is often solely attributed to geographical distance from the coast, the situation is more complex. Landlocked countries must also face the challenges that result from their dependence on passage through another country to access global markets.

Research carried out by the Earth Institute at Columbia University and the United Nations Millennium Project attempts to understand the nature of these challenges. Based on data from a number of sources, the researchers highlight the relatively low development levels in landlocked developing countries and outline the problems they face.

Overall, landlocked countries have lower levels of human development and external trade compared with their maritime neighbours. Nearly all landlocked countries export between twelve and seventy per cent less than maritime countries. According to the Human Development Report (HDR) 2000, nine of the twelve countries with the lowest human development index ranking are land-locked. Average GDP per capita is approximately forty-three per cent lower, while life expectancy is three and a half years lower than their neighbours with access to the sea.

The authors argue that the relatively worse performance of landlocked countries is strongly related to their dependence on other countries’ transit routes for access to overseas markets. They identify four issues that may inhibit the economic development of landlocked countries:

• Dependence upon transit neighbours’ infrastructure to transport goods to port. This imposes direct costs on trade, particularly if the transit country’s infrastructure is weak due to lack of resources, mis-governance, conflict or natural disasters.
• The political relationship between landlocked and transit countries. If the two are in conflict, whether military or diplomatic, the transit neighbour can easily block borders or obstruct trade.
• Vulnerability to civil conflict within transit countries. Civil conflict can damage or close transit routes, which often means that trade corridors have to be rerouted or even that transit is stopped.
• High administrative costs due to transit, associated with border crossings, heavy paperwork and bureaucratic procedures. These often add the greatest amount to shipping costs.

Strategies to improve the economic performance of landlocked countries should involve reducing their dependence on their transit neighbours. Measures should also be taken to reduce the risk of disruptions in trade flows. The authors recommend the following policy measures:

• Landlocked developing countries need to emphasise the development of their internal transportation infrastructure.
• Regional infrastructure integration strategies are needed to develop active trade routes and expand market access for landlocked countries. This includes investment in building and maintaining efficient ports to serve entire regions.
• Regional integration strategies (e.g. the Southern African Development Community) need to focus on administrative co-ordination to standardise border procedures and reduce transport costs.
• Landlocked countries need to invest, where possible, in developing industries that are less affected by transport costs.

In order to invest in all four of the above areas, official development assistance (ODA) to developing countries should give special attention to the unique needs of those that are landlocked. In particular, ODA should recognise the requirement for increases in assistance to support large-scale investments in roads and railways. Such investments need to include improvements in operations and maintenance as well as in transport infrastructure itself.

Source(s):
‘The Challenges Facing Landlocked Developing Countries’, Journal of Human Development 5(1), March 2004, 31-68 by Michael L. Faye, John W. McArthur, Jeffrey D. Sachs and Thomas Snow

id21 Research Highlight: 21 December 2004

Further Information:
John McArthur
UN Millennium Project
One United Nations Plaza
21st floor Rm. 2160
New York, N.Y. 10017
USA

Tel:   +1 212 906 5735
Fax:   +1 212 906 6349
Contact the contributor: john.mcarthur@unmillenniumproject.org

United Nations Millennium Project

Other related links:
The Earth Institute at Columbia University

'If it’s good for the region it’s good for the nation. What can regional public goods do for Africa? '

'Uganda: the burden of being landlocked'