Post on 06-Apr-2018
8/3/2019 Aid for Trade and Ldcs
1/15
AID FOR TRADE AND LDCS
John S. Wilson, Lead Economist, World BankDecember 13, 2010
8/3/2019 Aid for Trade and Ldcs
2/15
Context: International Trade2
World trade has grown
twice as fast as global
domestic product
Trade: impact on health,
education, technology, etc.
Expanding trade raises
welfare and growth for
everyone (rich and poor)
8/3/2019 Aid for Trade and Ldcs
3/15
Complex Policy Agenda4
Many constraints to trade and competitiveness
lie behind the border
high-cost services inputs
supply-chain bottlenecks
Domestic policy
Trade facilitationcutting costs high on
agenda
8/3/2019 Aid for Trade and Ldcs
4/15
Trade Costs and Benefits?
Harrison and Rodriguez-Clare (2010)
Growth is more likely achieved through increase
exposure to trade than interventions that limit trade
(i.e., tariffs or domestic content requirements).
Freund and Rocha (2010)
A one day reduction in transit delays in Africaincreases exports by 7 percent.
8/3/2019 Aid for Trade and Ldcs
5/15
World Bank Group and Trade7
MULTIDIMENSIONAL AND CROSS-CUTTING
Technical Assistance
and Capacity Building
WBI South-South knowledge transfer programs
Investment climate advisory services, Trade Facilitation
Facility
Financing, Loans and Credits IDAleast developed (grants), focusing on export
competitiveness and trade facilitation (IBRD)
IFC investments and trade finance facilities
Global Programs and Partnerships Participation in the Aid for Trade initiative and Enhanced
Integrated Framework, New publicprivate partnership on
trade
Data, Indicators, Tools and Research
World Trade Indicators, World Integrated Trade Solution(WITS), TBT Database, Trade Facilitation Indicators
Working papers, reports, books, flagship reports
8/3/2019 Aid for Trade and Ldcs
6/15
FY 2003-2010 IDA and IBRD commitments
World Bank Trade Lending
8/3/2019 Aid for Trade and Ldcs
7/15
Why Aid for Trade Matters
Support trade as engine of growthespecially inleast developed countries
Enhance diversification
Can help lower global trade costsmore criticalgiven fragile and changed global demand; higherfinancing costs
Fight protectionism and support for global andregional trade agenda
9
8/3/2019 Aid for Trade and Ldcs
8/15
10
Source: OECD CRS 2010.
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
2000 2001 2002 2003 2004 2005 2006 2007 2008
Aid for Trade LDC vs. Non-LDCODA Disbursements (USD Millions)
Total AFT to LDC Total AFT to Non-LDC
8/3/2019 Aid for Trade and Ldcs
9/15
Where the money goes
Trade policy and regulation (US$ 481 million): Negotiations,
implementation of trade agreements; mainstream trade policy,
standards, customs, regulatory reform.
Production Capacity (US$ 9,339 million): Business
development, business climate, access to trade finance, and
trade promotion.
Economic Infrastructure (US$ 12,465 million): Improvement
of infrastructure for transport, storage, communications and
energy.
Source: OECD 2010
11
8/3/2019 Aid for Trade and Ldcs
10/15
Is Aid for Trade Effective?
World Bank research
Examine rate of return on investment
Inform prioritiesG-20
$1 invested in trade policy & regulatory reform =
$697 trade.
12
8/3/2019 Aid for Trade and Ldcs
11/15
Aid Types & Rates of Return
Return on Increase in Aid $ (USD)*Aid $ Spent (USD millions) 2007
*Based on estimates in Helble, Mann, Wilson (2009)
0
2,000
4,000
6,000
8,000
10,000
12,000
Total A4T Trade policy andregulation
10,466
117
0
100
200
300
400
500
600
700
Trade policy andregulation
All A4TF
697
5
8/3/2019 Aid for Trade and Ldcs
12/15
Aid appears to go
where firms say they
have most problems.
Aid also appears to
match country demand.
Portugal Wilson (2010)and Ferro Wilson
(2010)
Does supply match priorities?
Percentage of Firms that identified area as an obstacle
Trade Stability
Rule of Law Labor
Infrastructure Business
Access to Finance
Firm Percetions vs. Aid Disbursements
8/3/2019 Aid for Trade and Ldcs
13/15
Moving Ahead
Need to know much more about aid effectiveness
Country specific, sector specific, monitoring over time
Especially critical for LDCs
Build on G-20 Working Group on Development
Unique opportunity with UN LDC IV Conference
15
8/3/2019 Aid for Trade and Ldcs
14/15
Aid Effectiveness Partnership for Trade
1. Expand knowledge exchange and learning with new
partnerships for LDCs.
2. Meet expanding need for monitoring and evaluation
of aid for trade success in LDCs anchored in
systematic data collection and research.
3. Foundation to support trade success of LDC Program
of Action.
16
8/3/2019 Aid for Trade and Ldcs
15/15
Thank you
John S. Wilson
Lead Economist
World Bank
http://econ.worldbank.org/projects/trade_costshttp://econ.worldbank.org/staff/jwilson