Executive summary

Abstract

Research on trade from Landlocked Developing Countries (LLDCs) shows that the average cost of transporting a container from a landlocked country is more than double of what it would cost transporting the same container from a transit country. The high cost of trading due to their geographically disadvantaged position is a major factor that negatively affects the competitiveness of LLDCs in international markets, especially those that are also least developed. It is evident that to remain competitive in international markets, what a country produces and exports, how it produces and the efficiency in which it delivers export products matter. The more competitive goods are often associated with higher productivity levels and product distinctiveness that gives them special features as export products. This is particularly important for LLDCs, which suffer from structural and geographical disadvantages. One would expect, for example, as growth and economic expansion takes place, an LLDC will begin to engage in the production and exports of goods and services that are easier to transport and where production will be based on revealed and latent comparative advantages. This would involve exploring or prospecting the potential for developing niche or unique products for export specialization and shifting resources to the production and exporting of high-value and low-volume products as, for example, some landlocked countries in Africa have done by encouraging investment in high-value horticultural goods that are airlifted to high-income markets in Europe.