High level Arab experts Meeting on the preparation for the 7 th WTO Ministerial Conference

1. High level Arab experts Meeting on the preparation for the 7th WTO Ministerial Conference Aid for TradeIslamicDevelopment Bank Elmostafa AITAMOR Beirut, 11-12 November 2009

2. Aid for trade • AfT: context and meaning • AfT and WTO • AfT monitoring framework • AfT and global review • IDB Group & AfT: contributions and targets • AfT & Arab region

3. Aid for Trade: the context • Trade: necessary not sufficient. • Associated costs: liberalization incurs adjustment costs: necessary exporting infrastructure, technology and knowledge to meet product standards. • Additional costs needed to realise the full benefits of new market opportunities.

4. Aid for Trade: the context • Doha Development Round 2001. • Trade has the potential to be an engine for growth. • But many developing countries face barriers that prevent them from benefiting from the world trading system.

5. Aid for Trade: the context • Some of these barriers are in export markets • But internal barriers : can be just as difficult for exporters to overcome. • Targeting these “supply-side” constraints is what Aid for Trade is all about.

6. What is Aid for Trade? • Aid for Trade is not a new global development fund but part and parcel of normal programmable ODA (grants and concessional loans). • There is no new funding mechanism involved. Existing mechanisms will be used by multilateral, regional and bilateral donors to disburse ODA. • Aid for Trade is not a substitute, but a complement .

7. What is Aid for Trade ? Aid for trade involves the flow of development finance from rich to poor countries for the purpose of enhancing the world trading system.

8. Aid for Trade: coverage • Assistance for trade policy and regulation. • Improving infrastructure. • Building productive capacity. • Adjustment assistance to deal with trade liberalization.

9. Aid for Trade & WTO • Aid for Trade initiative launched at Hong Kong (Dec. 2005). • Para 57 of the WTO HKMD invited the WTO DG to consult with “… international organisations … with a view to report to the General Council on appropriate mechanisms to ensure additional financial resources for Aid-for-trade, where appropriate, through grants and concessional loans.”

10. Aid for Trade & WTO 2006: A Task Force to draw up recommendations on how to operationalize Aid for Trade: • “demand-side”, • the donor “response”, • bridging the gap between “demand” and “response”.

11. AfT Monitoring Framework Global level : using data compiled by the OECD Donor level : based on self evaluations Country and regional level : based on self assessments

12. AfT Global Review • Global review mechanism to monitor periodically what happens at country level and assess progress in the implementation. • The first Global Review of Aid for Trade was held in November 2007. • The Review emphasized the need to improve monitoring and evaluation, including monitoring impact of AfT.

13. AfT Global Review : RoadmapMoving from commitment to implementation • Reinforce the AfT regional dimension, • Maintain momentum on commitments post 2010, • Enhance the role of the private sector, • Focus attention towards evaluating the impact of AfT interventions.

14. OIC MCs trade • 2007 : overall trade of IDB MCs : US$ 2.6 trillion. • 2004: 14% (333 billion). • 2007: 17% (421 billion). • 2015 target: increase intra-OIC trade to 20%.

15. IDB MCs TradeSupply side constraints and obstacles • Lack of investment; • Poor infrastructure; • Infrastructure management; • Institutional capacities; • Credit availabilities; • Costly regulation; • tariff and para-tariff obstacles; • Administrative procedures and banking;

16. IDB Group’s main role IDB assist its 56 Member countries to achieve their economic and developmental goals: • Poverty reduction; • Growth; • Economic and social development.

17. IDB’s trade financing schemes • Export Financing Scheme; • Import Trade Financing Operations; • Islamic Bank’s Portfolio for Investment and Development; • Unit Investment Fund; • ICD (Private Sector). • ICIEC; • ITFC (2006);

18. IDB Group’sStrategic initiatives • Task force on raising trade; • ITAP (investment promotion Assistance Program); • Technical Assistance program for the TNC and TPS-OIC.

19. IDB Group’sRoad map (2008) • Trade financing; • Trade promotion; • Trade facilitation; • Trade capacity development; • Promoting and developing strategic commodities originating from MCs.

20. IDB contribution • US$ 34 billion: IDB’s trade financing; • 2008: US$ 2.5 billion by ITFC; • 72 projects for trade promotion and Trade facilitation in 36 MCs; • 2008: US$ 347 million approved by ICD.

21. IDB’s contribution • Food crisis: 2008 Jeddah Declaration Initiative: 1.5 billion (a five years assistance package). • Strengthens food security and revitalizes the agriculture sector. • Financial crisis: scale up its operations, adding US$ 2.5 billion 2009-2011.

22. IDB targets • Food sector support; • Focus on infrastructure: transport, communication, energy; • Focus on capacity development through south-south cooperation; • Co-financing large projects in sub-regions.

23. IDB Group new vision2009-2011 Five key areas for poverty reduction: • Comprehensive human development; • Infrastructure development; • Regional economic cooperation/integration; • Productive capacity development; • Private sector development.

24. IDB & AfT regionally • Meeting SPECA region, march 2009, 2010 • 2010: ESCWA Road Map • Arab region priority needs in relevant areas • promote & support future AFT debate

25. AfT & Arab Region • Assist member countries and donorsin surveying AFT • Monitor & assess the impact & efficiency of tailored AFT funding on productive capacity & trade performance • Continue to provide target-oriented technical assistance for member countries • Encourage dialogue between member countries, donors and relevant regional organizations

26. Thank you for your attention Elmostafa AITOMAR WTO Expert Cooperation Department IDB eaitamor@isdb.org