From Isolation to Integration: UNDP’s Strategy for Transforming Landlocked Economies

The UNDP report urges landlocked developing countries to shift from commodity dependence to diversified, value-added economies through infrastructure, regional integration, and strategic trade reforms. It highlights the Awaza Programme of Action as a roadmap to seize emerging global trade opportunities amid rising uncertainties.

In a world where supply chains are shifting and protectionism is resurging, landlocked developing countries (LLDCs) remain disproportionately exposed to global economic shocks. A new report from the United Nations Development Programme (UNDP), drawing on research by UNCTAD, UNECE, the Growth Lab at Harvard University, and CEPII, highlights how the 32 LLDCs continue to suffer from structural disadvantages due to their geography. Without access to seaports, these nations face trade costs 1.4 times higher than their coastal counterparts and rely heavily on neighboring countries for transit, often through poor infrastructure and complex customs regimes. Their exports, 82% of which are unprocessed primary commodities, leave them highly vulnerable to external price fluctuations. As trade uncertainties mount globally, the pressure on LLDCs intensifies. But as the report argues, this moment also offers a rare opening to pivot towards resilience, regional integration, and economic diversification.

The Awaza Programme of Action: A Bold Strategic Shift

To confront these enduring obstacles, the UNDP proposes a strategic framework through the Awaza Programme of Action (APoA) for the decade 2024–2034. This initiative calls for LLDCs to look beyond traditional trade routes and commodity exports. Instead, it promotes a diversified, value-added economy that embraces regional integration and adapts to emerging global supply chains. The report outlines two possible futures. The first, an intensification of existing trade patterns, sees LLDCs continuing to export raw materials primarily to China, aided by projects under the Belt and Road Initiative (BRI). While this path might bring infrastructure investment and affordable imports, it risks reinforcing dependency and economic fragility. Already, China accounts for nearly USD 50.1 billion in imports from LLDCs, predominantly minerals, while supplying USD 78.3 billion in goods in return. The alternative is a more ambitious scenario: LLDCs break from commodity dependence by actively seeking out new trade partners, expanding into manufacturing and services, and investing in human capital and logistics infrastructure.

Missed Opportunities and the China Effect

The rebalancing of global trade is most visibly playing out in the triangle of the U.S., EU, and China. Recent U.S. tariff hikes, up to 40% on LLDC exports, have undermined what was previously favorable market access. Only copper has been identified for a sector-specific tariff so far, at a steep 50%. Meanwhile, China’s trade with LLDCs has expanded rapidly. In 2025 alone, Chinese exports to African markets rose by 12.2% year-on-year, while exports to the U.S. declined by 9.7%. Of the 32 LLDCs, 28 are now part of the BRI, through which China funds road, rail, and energy corridors. However, while Chinese engagement offers opportunities, it also carries risk. Countries like Lesotho, which sends 24% of its exports to the U.S., or Ethiopia, heavily reliant on Chinese trade, remain exposed to policy shifts in a few partner economies. Alarmingly, a study published in June 2025 found that none of the eight countries benefitting from the relocation of Chinese manufacturing, such as Vietnam, Indonesia, Mexico, or Turkey, were LLDCs. Without deliberate reform and investment attraction strategies, LLDCs risk being bypassed once again.

Turning Tariffs into Opportunity: The Diversification Imperative

Despite these challenges, the report identifies actionable pathways to transform LLDC economies. Ethiopia provides a case in point. By investing in industrial parks, it has managed to attract textile firms leaving China, creating tens of thousands of jobs. Analysts estimate that even a 1% shift in global apparel production to Africa could boost the continent’s apparel exports by 47%; a 5% shift could double them, adding USD 5.4 billion. Similarly, Central Asian LLDCs like Kazakhstan and Uzbekistan, with skilled workforces and abundant energy, could tap into manufacturing opportunities in food processing, chemicals, and textiles. LLDCs with critical minerals such as lithium (Bolivia) or uranium (Niger) may benefit from increased demand if China or other buyers redirect imports. But capturing these opportunities requires trade facilitation, legal certainty, and stronger logistics systems. Investing in Special Economic Zones, supporting SMEs to move up value chains, and digitizing customs processes can dramatically improve competitiveness.

Building Resilience Through Regional and Global Partnerships

The UNDP report emphasizes that LLDCs must not act alone. Regional initiatives like the African Continental Free Trade Area (AfCFTA) provide a foundation for scaling production and creating integrated regional value chains. Legally binding transit treaties, harmonized regulations, and participation in international transport conventions such as the TIR can ease goods movement and reduce trade friction. Development partners, from UNDP to multilateral development banks, have a key role to play by financing infrastructure, facilitating trade negotiations, and enabling digital exports like online services and IT products. Aid for Trade programs, South-South cooperation, and digital public infrastructure are presented as vital mechanisms to leapfrog geographic constraints. Finally, the report urges LLDCs to bolster economic resilience through better debt management, contingency planning, and investment in education and technology. Strategic foresight, for instance, planning for price collapses or demand surges in specific sectors, will help LLDCs not just survive but thrive amid global flux.