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Aid for Trade at a Glance 2019

Economic Diversification and Empowerment

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This edition analyses how trade can contribute to economic diversification and empowerment, with a focus on eliminating extreme poverty, particularly through the effective participation of women and youth. It shows how aid for trade can contribute to that objective by addressing supply-side capacity and trade-related infrastructure constraints, including for micro-, small- and medium-sized enterprises notably in rural areas.

The analysis is based on the views of 133 respondents – 88 developing countries, 35 donors, 5 providers of South-South trade-related support and 5 regional organisations – who participated in the 2019 aid-for-trade monitoring and evaluation exercise. They share the view that economic diversification is a gateway for economic empowerment, but also that empowerment is essential for economic diversification particularly when it enables youth, women and micro-, small- and medium-sized enterprises to engage in international trade.

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Export diversification at the time of slowbalisation

Export diversification remains an important development objective of many commoditydependent developing countries. Today’s global economic trends, however, suggest that the world may be entering a period of “slowbalisation”, signified by slower growth of trade, foreign direct investment and capital flows. Growing environmental concerns also raise questions over the viability of repeating the pattern of massive export growth enjoyed by some developing countries in the past several decades. Shifting patterns of economic growth call for a new focus in developing countries’ export diversification strategies. This chapter discusses that two areas - services trade and South-South trade – can provide developing countries with untapped potential for continuing export diversification. The chapter then discusses how South-South regional regulatory cooperation could enhance services trade and reduce the trade-distorting impact of non-tariff measures. To conclude, the chapter explores the role of Aid for Trade in enhancing export diversification through regional cooperation.

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