Aid for Trade at a Glance

Frequency :
Biennial
ISSN :
2223-4411 (online)
ISSN :
2223-4403 (print)
DOI :
10.1787/22234411
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This annual joint OECD-WTO publication provides a comprehensive analysis of trends and developments in aid that aims to help developing countries integrate into the global economy and benefit from trade opportunities. Case stories and self-assessments by partner countries, bilateral and multilateral donor agencies, providers of South-South co-operation, and regional economic communities provide the basis for this analysis, coupled with OECD aid data and findings from evaluations and econometric studies.

Also available in: French
 
Aid for Trade at a Glance 2009

Aid for Trade at a Glance 2009

Maintaining Momentum You or your institution have access to this content

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Author(s):
OECD, WTO
Publication Date :
15 July 2009
Pages :
316
ISBN :
9789264069022 (PDF) ; 9789264068827 (print)
DOI :
10.1787/9789264069022-en

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Numerous barriers prevent developing countries - in particular the least developed - from taking advantage of trade opportunities that could help them reduce poverty. The Aid-for-Trade Initiative has successfully built awareness of the support these countries need to surmount these barriers. As a result, more and more developing countries are raising the profile of trade issues in their development strategies and donors are responding by increasing the resources they provide to build trade capacity in areas such as policy, institutions and infrastructure.

This aid-for-trade monitoring report - the second of its kind - documents the success of the initiative to date. It examines trends and developments and presents a comprehensive analysis of donor and partner country engagement. In addition, it addresses the regional dimension of aid for trade and showcases three cross-border infrastructure projects. Finally, the report provides fact sheets that help in assessing the outcomes and impacts of aid for trade.

The main conclusions are positive. Nonetheless, the outlook is affected by the current global economic crisis. Aid for trade is now, and more than ever, essential to help suppliers from developing countries build capacity and penetrate global markets. The key message of the report is clear: aid for trade must remain an essential component of development assistance. It offers a number of steps, in this respect, that can advance the aid-for-trade dialogue.

Also available in: French, Spanish
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  • Mark Click to Access
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    Foreword
    We compiled this joint report in the midst of a global economic recession of momentous proportions that risks halting, or even reversing, sustained development gains, whether measured in terms of economic growth, poverty reduction, or human development. All economies have been hit hard in what is effectively the first global crisis since the WTO came into being.
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    Acknowledgements
    The Aid for Trade at a Glance 2009 : Maintaining Momentum was prepared under the aegis of the OECD Development Assistance Committee (DAC) and the OECD Trade Committee (TC) and in close co-operation with the WTO Committee on Trade and Development.
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    Acronyms
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    Executive Summary
    The Aid-for-Trade Initiative has succeeded in raising awareness about the support developing countries, and in particular the least developed, need to overcome the barriers that constrain their ability to benefit from trade expansion and reduce poverty. As a result partner countries are raising the profile of trade in their development strategies and donors are responding by providing increasing resources to build trade capacity – whether in terms of policies, institutions or infrastructure.
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    Introduction
    Successive rounds of multilateral trade negotiations have greatly expanded market access, including through a number of measures focused specifically to benefit developing countries. Yet, many low income countries continue to face difficulties in adjusting their economies to the changed circumstances and taking advantage of the potential benefits from market access opportunities. Governments, enterprises and other entities may lack the capacities – e.g. information, policies, procedures, or infrastructure – to compete effectively in global markets and avail themselves of the advantages provided through international trade.
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    The Impact of the Economic Crisis on Aid for Trade
    The global economic crisis is an exogenous shock for developing countries that affects them in different ways and through different transmission channels. World trade is experiencing its largest decline in generations. Foreign direct investment (FDI) and other private flows are also declining and remittances are expected to drop significantly. Developing countries are, therefore, not in a strong position to address the consequences of the current economic crisis.
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    Creating Fertile Ground
    Increasingly, partner countries are taking the necessary steps to participate fully in the Aid-for- Trade Initiative as evidenced by a number of positive developments. Almost all partner countries indicate that they have a national development strategy and the majority are also mainstreaming trade based on well-developed trade-related priorities. Although independent surveys raise questions about this positive assessment, it is, nevertheless, a clear indication of the growing awareness among partner countries that trade can play a positive role in promoting economic growth and reducing poverty. Partner countries tend to identify similar aid-for-trade priorities: network infrastructure; competitiveness; export diversification; and trade policy analysis, negotiation and implementation. The majority have operational strategies and many others are in the process of elaborating them. Nearly all partner countries discuss their traderelated financing needs with donors, through a combination of different approaches, including bilateral, regional and multilateral. However, partner countries face challenges in confirming the CRS approximation of their aid-for-trade flows; in the majority of cases, they were unable to compare the CRS proxies with their own data.
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    Charting the Flows
    In 2007, as was the case in 2006, aid for trade grew by more than 10% in real terms. Total new commitments from bilateral and multilateral donors in 2007 stood at USD 25.4 billion, while non-concessional lending provided an extra USD 27.3 billion in trade-related financing. The increase of USD 4.3 billion in aid for trade was not at the cost of social sector programmes, such as health or education. Furthermore, prima facie evidence indicates that a very large majority of commitments do result in actual disbursements.
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    Are Donors on Course?
    The first Global Aid for Trade Review revealed that most donors had developed – or were in the process of developing – aid-for-trade strategies, and that wider support for trade issues was expressed in many aspects of their regular work programme. This second OECD/WTO monitoring survey reveals a healthy momentum to keep this initiative in the forefront of donors’ development strategies. More donors took part in the second monitoring exercise and their responses clearly show that aid for trade holds growing importance in their programmes and is likely to be maintained, or even expanded, over the medium term.
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    The Regional Dimension
    International experience has demonstrated that regional trade integration can serve as a powerful catalyst to economic growth. However, developing countries sometimes face particular capacity constraints that limit their ability to capitalise on the full potential from such processes. For example, poor cross-border infrastructure may prove to be a particular challenge for low-income developing countries. This highlights the need for more and better aid to address such binding constraints to regional trade integration, a point increasingly affirmed by partner countries and donors alike.
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    The Way Forward
    The relationship between trade, growth and poverty reduction is complex. But it is clear that openness and integration can contribute to economic development and poverty reduction. The Aid-for-Trade Initiative has succeeded in raising awareness about these important links, but also about the binding trade-related constraints developing countries face that prevent them from benefiting from trade expansion. The initiative has also succeeded in mobilising resources to build trade capacities related to policies, institutions and infrastructure.
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    Bibliography
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      Aid for Trade at a Glance Fact Sheets
      The first Aid-for-Trade Global Review suggested developing a set of indicators on aid for trade to assess at a glance the progress being made in achieving the objectives of the initiative. As a follow-up to this recommendation, an Expert Symposium, organised by the WTO in September 2008, discussed with key stakeholders a set of possible indicators. The aid-for-trade fact sheets are based on a selection of these indicators and provide an overview of country specific aid-fortrade priorities, aid-for-trade flows, trade policy and trade performance. Together these indicators provide a sense of the progress and challenges at the country level. They complement the selfassessment reports and global flows.
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      Programme Indicator Sources
      Simple Average MFN applied tariff: Caculated as the simple average of the applied tariff rates that a country applies. The lower the percentage rate the easier it is for the exporter to enter the considered market. (Source: ITC)
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      Liberia
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      Madagascar
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      Malawi
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      Maldives
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      Mali
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      Mauritius
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      Moldova
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      Montenegro
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      Morocco
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      Myanmar
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      Namibia
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      Nepal
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      Nicaragua
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      Niger
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      Pakistan
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      Panama
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      Paraguay
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      Peru
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      Philippines
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      Rwanda
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      Saint Kitts and Nevis
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      Saint Lucia
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      Saint Vincent and the Grenadines
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      Samoa
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      Senegal
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      Seychelles
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      Sierra Leone
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      Sri Lanka
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      Suriname
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      Swaziland
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      Tanzania
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      Togo
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      Tonga
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      Trinidad and Tobago
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      Turkey
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      Uganda
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      Ukraine
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      Uruguay
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      Vanuatu
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      Viet Nam
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      Yemen
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      Zambia
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      Key Data
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      Methodological Notes
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      DAC List of ODA Recipients by Income Group
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      DAC List of ODA Recipients by Region
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      List of CRS Purpose Codes
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