overseas countries maydiscount theworldpriceofagivenland-locked developing I .•,A/44/588 English Page19 country's exports becausCl of"unreliabili tyofsupplies". Simill1rly, regional suppliers willtendtoinflate theimportpricesastheytrytoexploit their locational advantage. 40.Acomparison ofthebalance-of-payments accounts ofland-locked developing countries withtheaccounts ofotherdeveloing countries indicates, interalia, thatalargeproportion oftheforeign-exchange earnings ofland-locked developing countries isabsorbed intransport payments. Statistics onpayments toforeign carriers fortransport services arethemostreadily available directevidence of thecosts-that land-lock6d developing countries bearinanygivenyearbecause of theirgeographical situation. Recentstatistics indicat& thatpayments toforeign carriers represent amajordrainontheforeign-exchange earnings ofmany land-locked developing countries. Inasampleof17land-locked developing countries, suchpayments exceed 10percentofthevalueofexports ofgoodsand services in11ofthesecountries andin6theyexceed 25percent. Suchpayments absorbed 63percentofChad'searnings fromtheexpo~ts ofgoodsandservices in 1985,37percentofRwanda's in1985,55percentofMali'sin1985,28percent ofMalawi's in1982,29percentofCentral African Republic's in1985,and 40percentofBurkin~ Faso'sin1983. Formostofthecountries inthesample, payments toforeign carriers fortransport services farexceedtheaverage for otherdeveloping countries (seeappendix table8). 41.Theserecent stati~tics arenotabnormal andthemagnitude oftransport payments withinthecurl~nt-account balance ofland-locked developing countries exposes themtoapeculiar typeofexternal shocktowhichotherdeveloping countries arenotsubject, namely atransport shock. Tranport shocksoccurwhen therearemajordisruptions totransport tradethatincrease normalshipping costs andlengthen thenormaltransit timesandtheroutine delaysaffecting shipments. Intheextreme f~rmofsuchtransport shocks, overland tradeflowstoandfrom land-locked developing countries aretotally curtailed. Allland-locked developing countries haveexperienced transport shocksandtheeffectoftheseshocksontheir economies istoexacerbate thewaysinwhichtransit-transport difficulties actas aconstraint ongrowth. Thislinkage isbriefly analys~d he1ow. C.Geographical situatiQn andgrowth 42.ThecostsandrisksQftransit-transport aggravate thefQreign-exchange cQn~traint byreducing thevQlumeandvalueofexpQrts andinflating thecostsof impQrts. Thislimitsthecapacity toimportnecessary capital gOQdsandproduction inputs. Themedium-term effects offoreign-exchange shortages ongrowthare reinforced bytheeffects ofthelowlevelofexportactivity, lowexportprices andhighimportprices oneffective domestic demand andontheprofitability of production. Allthisleadstolowlevelsofincomeandeconomic activity, whichin turnimposetwofurther resource constraints onland-locked economiesl limited domestic savings andaweakcapacity tofinance pUblicexpenditure fromdomestic sources. Thesecombined factors caneasilysnowball intoaneconomic crisis similar toonethatmanyAfrican land-locked countries haveexperienced inrecent years. I .••A/44/588 English Page20 43.Atthebeginning ofthefirsttwoUnitedNations Development Decaa8s, the land-locked developing countries were,ingeneral, characterized byetreme conditions ofunderdevelopment. Thisreflected ahistory inwhichcoutinental interiors wereincorporated later,morepartially andmoreindirectly intothe worldeconomy. Inmanycases,theremoteness ofcontinental interiors setupa self-perpetuating cycleofneglect. Investment intransport infrastructure wasnot undertaken asresources werenotperceived tobeeconomically valuable, and resources werenoteconomically valuable because thetransport costsofgetting themtotheportsweretoogreat. Thereweresome nota~le exceptions. zimbabwe andthetraditional mineral producers. Bolivia andZambia, wererelatively wealthy intermsofaggregate gross dom~stic product. Butintheotherland-locked