Trapped by Geography and Squeezed by Global Market Forces, Landlocked Nations Are ‘Invisible to Much of the World’

“These countries are invisible to much of the world,” not able to draw the attention needed to their unique challenges, said Rebeca Grynspan Secretary-General of the UN trade and development body, UNCTAD, speaking to UN News on the margins of the third UN Conference on Landlocked Developing Countries (LLDC3).

Without international attention and coordinated action, they will remain stuck in structural limbo, she emphasised.

High costs, low returns

One of the most persistent challenges they face is geography itself.

Without direct access to seaports, they must rely on neighbouring transit countries to move goods – often through outdated or inefficient infrastructure.

This translates into trade costs that are, on average, 1.4 times higher than those of coastal countries, according to UNCTAD.

In some cases, export procedures can stretch into weeks or months due to border delays, fragmented regulations and limited digital systems.

Ms. Grynspan highlighted that in customs procedures, digital tools can cut waiting times at borders from three days to three hours. To that end, regional agreements and digital initiatives have emerged as lifelines.

One standout example is the Framework Agreement on Facilitation of Cross-Border Paperless Trade, championed by the UN Economic and Social Commission for Asia and the Pacific (ESCAP).

Now in force among several Asia-Pacific countries, it helps reduce paperwork, automate customs and harmonise standards, making processes faster, cheaper and more transparent.

Paperless trade also has the potential to reduce corruption and ease language-related challenges.

ESCAP estimates that implementing cross-border paperless trade measures could reduce trade costs by up to 30 per cent for countries in the region without direct sea access and increase export potential for the whole of Asia and the Pacific by nearly $260 billion.

Infrastructure and integration

Even when goods reach border crossings, weak domestic transport networks further slow trade down. Roads and railways are often underdeveloped, underfunded or vulnerable to climate shocks.

“Regional infrastructure – like the African North Corridor – is crucial,” Ms. Grynspan said, citing examples where wait times at borders have dropped by more than 150 per cent due to corridor investment and coordination.

But infrastructure alone is not enough – it must be paired with digital systems and strong regional partnerships.

“For landlocked countries, regional integration is very important because when you integrate regionally, you are in a better position because goods pass through you…[making you] part of global value chains with value added.”

© ADB/Eric Sales | In landlocked countries like Bhutan (pictured), roads are a vital lifeline. But limited and costly transport infrastructure restricts mobility, inflates trade costs, and hinders access to markets, education, and healthcare.

Escaping the commodity trap

Another structural challenge is heavy dependence on commodities.

Over 80 per cent of landlocked developing countries rely on raw materials like minerals, oil or agricultural goods, making them highly exposed to global price swings and long-term decline in terms of trade.

“You educate your people, but then they have nowhere to work because commodities do not give you the quality jobs that you need for the future,” said Ms. Grynspan.

The path forward lies in economic diversification, especially toward value-added manufacturing, digital services and knowledge-based sectors – industries that are less constrained by geography.

The investment conundrum

Yet to realise that potential, these countries need investment and they are not getting enough.

Despite more than 135 legal and policy reforms aimed at attracting foreign capital, foreign direct investment has declined by an average of 2 per cent over the past decade.

ESCAP’s analysis confirms this gap: landlocked countries in Asia are receiving far less infrastructure investment per person compared with coastal countries, even though their transport requirements are proportionally higher.

“Governments are trying to make their countries more attractive [but] investment is not coming in,” Ms. Grynspan said.

High risk factors, lack of guarantees, and a reliance on short-term financing are deterring investors.

“Multilateral development banks need to help us,” she added. “We need long-term, affordable financing and lowered cost of capital.”