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Aid for Trade in the Asia-Pacific: Its Role in Trade-Driven Growth

Aid for Trade in the Asia-Pacific: Its Role in Trade-Driven Growth. Report from Co-Chairs of the Regional Technical Group Regional Review on Aid for Trade 14 June 2011 Jakarta. Aim of the Report. Where are we? How aid-for trade contributes to trade-led development Where are we going?

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Aid for Trade in the Asia-Pacific: Its Role in Trade-Driven Growth

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  1. Aid for Trade in the Asia-Pacific: Its Role in Trade-Driven Growth Report from Co-Chairs of the Regional Technical Group Regional Review on Aid for Trade 14 June 2011 Jakarta

  2. Aim of the Report Where are we? How aid-for trade contributes to trade-led development Where are we going? Future of Aid-for Trade in Asia and the Pacific 2

  3. Main Issues Historic links between FDI, ODA, growth and development Aid for Trade flows since 2005 Role of national development strategies in supporting regional approach Aid for Trade: what works best Way forward 3

  4. Main Messages “Factory Asia” derives from export-led growth model FDI key—led to production networks/supply chains ODA set stage: capacity, investment climate, and infrastructure—all components of Aid-For-Trade Despite swift recovery, “two faces” remain Aid-for-Trade up since 2005—but low per capita Regional approach backed by national strategies optimal—ODA and non-concessional finance Regional Technical Group a forum for strategic thinking and fostering partnerships 4

  5. Rise of “Factory Asia” 40 years of outward-oriented development transformed a handful of economies into global factories Key drivers: FDI Improved business climate Skills and technology Regional infrastructure ODA crucial for capacity, investment climate, and infrastructure The region’s share of world exports tripled to 24%; intra-regional trade in East Asia over 50% 5

  6. Emergence of Factory Asia Source: ADB. Emerging Asian Regionalism. 6

  7. Upturn in Asia’s Trade Annual Average Growth Rate of Merchandise Exports (% per year) Sources: ADB, Asian Development Outlook 2011 (http://www.adb.org/documents/books/ado/). 7

  8. Beyond Crisis, Risks Remain Growth rate of GDP (% per year) Note: 2011 and 2012 are forecasts Sources: ADB, Asian Development Outlook 2007, 2011 (http://www.adb.org/documents/books/ado/). 8

  9. “Two Faces”: the Challenge High-performing economies: PRC, India, NIES The rest: Resource-Rich, Low Income, and LDCs and Small States Factors: landlocked, fragmented markets, single-resource dependency, post-conflict, weak capacity, policy gaps. 9

  10. Asia Home to 2/3 of World’s Poor Drop in poverty in just a few countries… …but poverty increased in many others Source: PovcalNet Database (World Bank); accessed 6 April 2010. 10

  11. Aid for Trade growing, but less per capita Aid for Trade Flows (annual averages), Constant 2007 $ billion 2007 AfT Flows Per Capita, Constant 2007 $ Source: staff estimates using OECD CRS data as of April 2010. 11

  12. Regional Approach Backed by National Strategies Integrated Approach infrastructure corridors reforms and WTO accession trade finance competitiveness trade capacity Mainstreaming Trade • public-private partnerships • donor coordination • ODA and non-concessional finance • effective monitoring and evaluation 12

  13. Going Forward Regularize RTG process Develop work program beyond 2011 Expand cross-regional dialogue to share experiences Gradually expand membership Disseminate RTG work at WTO and other forums 13

  14. Contents of the Report 1. INTRODUCTION 1.1 The Importance of Trade and the Role of Aid for Trade 1.2 Purpose of the Report 1.3 Structure of the Report 2. TRADE, FDI, ODA, AND GROWTH IN THE ASIA–PACIFIC 2.1 Emergence of “Factory Asia” 2.1.1 Trade as an Engine of Growth in Asia–Pacific 2.1.2 FDI and ODA as Factors in Asia–Pacific’s Growth 2.1.3 FTAs as Drivers of Regional Integration 2.2 The “Two Faces” of the Asia–Pacific 2.2.1 “First Face”: High-Performing Asian Economies 2.2.2 “Second Face”: Resource-Rich, Low-Income, and LDCs and Small States 2.2.3 Geographic Sub-divisions of the Asia–Pacific 2.3 Challenges Faced by the “Second Face” of Asia–Pacific 2.3.1 State of Play: Gaps in Trade Performance and Growth 2.3.2 High Trade Costs and Infrastructure Deficiencies 2.3.3 Uneven FDI Flows 2.3.4 Social Vulnerabilities and Poverty 2.3.5 Post Global Financial Crisis Developments 2.4 Sustaining Trade-led Growth in Asia–Pacific’s Second Face 2.4.1 Trade-Led Growth Through Balanced Openness 2.4.2 Using FTAs as Drivers of Regional Economic Integration 2.4.3 Improving the Business Environments 2.4.4 Enhancing Export Competitiveness 3. AID FOR TRADE FLOWS IN THE ASIA–PACIFIC 3.1 Aid for Trade Financing: Concessional, Non-Concessional Public Financing, and Private Sector Financing 3.2 Mapping Aid for Trade Flows 3.3 Assessing Quality of Aid for Trade 4. AID FOR TRADE ON THE GROUND: A REGIONAL APPROACH BACKED BY NATIONAL STRATEGIES 4.1 Why a Regional approach is Important 4.2 Aid for Trade Initiatives 4.3 Aid for Trade Implementation Principles 5. WAY FORWARD 14

  15. Full RTG report available from 10 July 2011 at http://aric.adb.org/aid-for-trade-asia/ http://aienetwork.org Contact RTG Secretariat at http://aric.adb.org/aid-for-trade-asia/feedback.php 15

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