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Aid for Trade and Development Part II

Aid for Trade and Development Part II. Rajan Dhanjee Office of the Director Division on International Trade in Goods and Services, and Commodities UNCTAD. Obstacles to AfT (1/3). Low attention to trade as a tool of development in recipient countries and in donor agencies

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Aid for Trade and Development Part II

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  1. Aid for Trade and DevelopmentPart II Rajan Dhanjee Office of the Director Division on International Trade in Goods and Services, and Commodities UNCTAD

  2. Obstacles to AfT (1/3) • Low attention to trade as a tool of development in recipient countries and in donor agencies • Insufficient trade mainstreaming in national development strategies and Poverty Reduction Strategy Papers (PRSPs) • Lack of private-sector involvement in identifying trade needs • Limited absorptive capacity in recipient countries • Inadequate linking mechanisms and lack of predictability in donor response to trade priorities identified at the national and regional levels

  3. Obstacles to AfT (2/3) • Lack of coordination and coherence in donors’ trade-related responses • Slow, duplicative and bureaucratic processes in the assessment and delivery of trade assistance, including burdensome parallel structures within recipient countries • Lack of data on, and analysis of, trade policies and their impact on development, lack of easily available information on existing Aid-for-Trade instruments

  4. Obstacles to AfT (3/3) • Ineffective monitoring of trade-related country policies and donor activities; absence of rigorous, independent project and programme evaluation and impact assessment • Limited support for regional, sub-regional and cross-border trade-related programmes and projects • Inadequate support to address the adjustment costs of trade liberalization • Insufficient resources for infrastructure and productive capacity building • Uneven country coverage

  5. WTO Task Force report (1/2) • Urgency, success of Doha Round would increase need for AfT • Additional, predictable, sustainable and effective • Demand-driven, country ownership and country-driven approaches • Need to take stock of existing AfT • Monitoring/evaluation mechanism to build confidence increased AfTwill be delivered and effectively used • Providers’ and recipients’ responsibility to report on progress/results

  6. WTO Task Force report (2/2) • Guided by Paris Declaration on Aid Effectiveness on how to deliver and manage aid accompanied by monitorable action plans • Donors should increase attention to trade issues in aid programming • Greater donor/agency coordination and harmonization of procedures • Need to better match demand and response sides, e.g. through “National Aid-for-Trade Committee” and multi-stakeholder consultations – private sector involvement • Technical cooperation among developing countries valuable

  7. Post Hong Kong developments • WTO-coordinated follow-up processes: • D-G’s consultations on “appropriate mechanisms to secure additional financial resources for Aid for Trade” • Ad Hoc Consultative Group – Committee on Trade and Development – General Council • Regional reviews • Monitoring: • Global (2007, 2009) • Donor activities through self-evaluations • In-country self-assessments

  8. AfT implementation • Pledges made • Additionality - creation of new fund? • Grants or loans? • Emphasis upon aid effectiveness – best practices – prioritization – absorptive capacity – political economy – recipients’ responsibility for accessing

  9. AfT frameworks and flows • Bilateral: OECD Creditor Reporting System – rise by 10% in 2006 to $23 Billion? – demand-side and donor responses - incorporation into national development strategies and poverty reduction programmes? • Regional – involvement of regional development banks and commissions, international organizations, lead donors - Working Group (see above) to establish African AfT network • Multilateral: Enhanced Integrated Framework - international financial institutions’ activities

  10. Issues for discussion • Is the list of obstacles to AfT correct or complete – are these obstacles being suitably addressed? • How should the AfT flows and their adequacy, additionality, effectiveness in building trade capacity and impact in improving trade performance and development at national and regional levels be monitored and evaluated? • What institutional capacity and processes should be built up in developing countries to integrate AfT into national development plans/coordination structures, identify priorities and propose bankable AfT projects? • What should regional or South-South AfT focus upon – would it operate differently in practice – how could it be monitored and assessed?

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