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AID FOR TRADE

AID FOR TRADE. JOHN S. WILSON THE WORLD BANK. NEW YORK JULY 15, 2010. OBJECTIVE AND OVERVIEW. I -Aid for trade – why it matters II - Supply, demand, and effectiveness III – Looking Ahead - LDCs. WHAT AND HOW MUCH?. Aid for trade – official development assistance

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AID FOR TRADE

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  1. AID FOR TRADE JOHN S. WILSON THE WORLD BANK NEW YORK JULY 15, 2010

  2. OBJECTIVE AND OVERVIEW I -Aid for trade – why it matters II - Supply, demand, and effectiveness III – Looking Ahead - LDCs

  3. WHAT AND HOW MUCH? • Aid for trade – official development assistance • Trade policy and regulatory reform • Trade capacity • Infrastructure • Total aid for trade $40 billion (2008) • About 27% of total official development assistance

  4. AID FOR TRADE COMMITMENTS ODA commitments (constant 2008 US$ million) Source: OECD CRS 2010.

  5. WHY AID FOR TRADE MATTERS to LDCs • Supports trade as engine of growth • Enhance diversification • Fight protectionism and support for global and regional trade agenda • Lowers trade costs – more critical given fragile and changed global demand; higher financing costs

  6. Performance Rankings: LLDCs / LDCs / OECD * Land Locked Countries ** Least Developed Countries Sources: Doing Business 2009; Logistics Perception Index 2009.

  7. Gains to Reform and Capacity Building Sources: World Bank estimates in Portugal and Wilson, 2010.

  8. QUESTIONS MOVING FORWARD • Are countries most in need getting aid for trade? • Is aid for trade effective? • A new agenda for LDCs -- with G-20 support (Hoekman Wilson 2010)

  9. DOES DEMAND MATCH SUPPLY?

  10. WHAT ABOUT AID EFFECTIVENESS? • World Bank research. • Examine rate of return on investment. • Inform priorities – global level. • $1 invested in trade policy & regulatory reform = $697 trade.

  11. AID TYPES & RATES OF RETURN Aid Spent (USD millions), 2007 Return on Increase in Aid (USD)* *Based on estimates in Helble, Mann, Wilson (2009).

  12. SUMMARY CONCLUSIONS • Commitments on aid for trade solid. • But critical gaps remain • Basic data, analysis of effectiveness • Need to leverage large infrastructure investment • Greater clarity and coordination going forward • Unique time to build on achievements to date and drive a high profile agenda.

  13. PRIORITIES - AID FOR TRADE • Expand South-South knowledge exchange with strategic initiative of policy dialogue and advice by bringing middle-income G20 countries into the aid for trade initiative. • Create a new public-private partnership to harness the dynamism and expertise in the private sector. The World Bank is developing an Aid for Trade Facilitation Public Private Partnership which could serve as a model.

  14. PRIORITIES - AID FOR TRADE • Provide dedicated financial support for a global program of monitoringand evaluation of aid for trade anchored in systematic data collection and research . • Promote market access for low income countries through a commitment by all G20 members to eliminate import restrictions for LDCs, thus stimulating South-South trade and leveraging return on aid for trade disbursements.

  15. THANK YOU John S. Wilson The World Bank jswilson@worldbank.org http://worldbank.org/tradehttp://econ.worldbank.org/projects/trade_costs

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