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Jacek CukrowskiJacek CukrowskiEconomic Development and Poverty Economic Development and Poverty Reduction Advisor, Reduction Advisor,

UNDP, Europe and the CISUNDP, Europe and the CIS

Bratislava Regional CentreBratislava Regional Centre

Aid for Trade (AfT) Needs Aid for Trade (AfT) Needs AssessmentAssessment

Third Meeting of Trade Ministers of Landlocked Developing Countries

Ezulwini, Swaziland, 21-22 October 2009

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OutlineOutline

Objectives of Objectives of AfT Needs AssessmentsAfT Needs Assessments

Main focus and messageMain focus and message

The The GuideGuide

Proposed structure Proposed structure

Current work on Current work on Aft Needs AssessmentsAft Needs Assessments in in Europe and the CISEurope and the CIS

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ObjectivesObjectives

Why Trade Needs Assessments?Why Trade Needs Assessments?

Identify and overcome existing barriers to tradeIdentify and overcome existing barriers to trade

Identify the cost of adjusting to current or anticipated trade agreements Identify the cost of adjusting to current or anticipated trade agreements / trade shocks/ trade shocks

Assess the impact of trade on poverty and human developmentAssess the impact of trade on poverty and human development

Tackle institutional and infrastructure capacity limitationsTackle institutional and infrastructure capacity limitations

Suggest action plans to remove bottlenecks and seize opportunities for Suggest action plans to remove bottlenecks and seize opportunities for the poorthe poor

Identify a set of policy recommendations and technical assistance needs aimed at improving the contribution of trade to human development

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What Trade Needs What Trade Needs Assessments should?Assessments should? Review of current trade and investment policies and Review of current trade and investment policies and agreements, the business environment and investment agreements, the business environment and investment climateclimate

Review country competitiveness and export performanceReview country competitiveness and export performance

Analyse the ways to promote key sectors of the economyAnalyse the ways to promote key sectors of the economy

Assess the impact of trade on poverty, inequality, and Assess the impact of trade on poverty, inequality, and social exclusionsocial exclusion

Identify opportunities to use trade for human developmentIdentify opportunities to use trade for human development

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Main focusMain focus

Impact of trade on human Impact of trade on human developmentdevelopment Trade can be a powerful source of economic growthTrade can be a powerful source of economic growth

……but while broadly based economic growth is necessary for human but while broadly based economic growth is necessary for human development, development, it is not enoughit is not enough

Human development also requires enlarging peopleHuman development also requires enlarging people’’s s choices and opportunitieschoices and opportunities——especially poor peopleespecially poor people’’ss

liberalizing trade does not ensure poverty reduction or human liberalizing trade does not ensure poverty reduction or human development, nor does it guarantee immediate economic growthdevelopment, nor does it guarantee immediate economic growth

The nature of resource allocation and social inclusion are The nature of resource allocation and social inclusion are important determinants of growth leading to poverty important determinants of growth leading to poverty reduction and human developmentreduction and human development

for women and those participating in the informal sector, especiallyfor women and those participating in the informal sector, especially

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It improves economic baseIt improves economic base It broadens a range of human choiceIt broadens a range of human choice

… … but there could be some short-term human but there could be some short-term human development risks that needs to be well development risks that needs to be well

understood and countries need to be prepared understood and countries need to be prepared to minimize possible negative impact of to minimize possible negative impact of

trade trade on selected social groupson selected social groups

Main messages

Opening trade is key for human Opening trade is key for human developmentdevelopment

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Main messagesMain messages

Trade should be integrated into Trade should be integrated into national development policy national development policy (development strategies)(development strategies) National ownership is criticalNational ownership is critical

Opportunities to use trade to reduce poverty and Opportunities to use trade to reduce poverty and promote human development should be identified promote human development should be identified

Human development risks related to trade shocks Human development risks related to trade shocks needs to be understoodneeds to be understood

Suitable institutions need to be developed to ensure Suitable institutions need to be developed to ensure multi-stakeholder participation in trade policy designmulti-stakeholder participation in trade policy design

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Trade and national development Trade and national development strategiesstrategies

If trade is to serve as an engine of economic growth If trade is to serve as an engine of economic growth countries must develop countries must develop a multidimensional strategy for a multidimensional strategy for trade expansiontrade expansion

Framed in an appropriate macroeconomic Framed in an appropriate macroeconomic environmentenvironment

Structural and social concernsStructural and social concerns should be treated equally with should be treated equally with macroeconomic and financial concernsmacroeconomic and financial concerns

Trade reforms should be an integral part of Trade reforms should be an integral part of comprehensive development frameworkscomprehensive development frameworks

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The GuideThe Guide

How to Conduct How to Conduct AfT Needs AfT Needs AssessmentsAssessments

http://europeandcis.undp.org

Regional guide

Global guide

http://www.undp.org/geneva/docs/trade-AFT%20web.pdf

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Contents of the GuideContents of the Guide

1. Introduction

2. Trade Mainstreaming 3. Trade and Human Development 4. AfT Needs Assessment: Structure and Process

5. Macroeconomic And Business Environment 6. Trade and Investment Policies 7. Trade Facilitation and Standards8. Sectoral Analysis 9. Trade Policies: An Impact Assessment

10. Final Remarks, Action Matrix and Launching the Study

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Proposed structure of Proposed structure of AfT Needs AfT Needs AssessmentsAssessments

(I) Introduction…. short country background, key analytical questions…(II) Macroeconomic and business environment… macroeconomic background (related to poverty, human development, trade and competitiveness) (III) Trade and investment policy… policies and trade and investment dynamics, institutions, trade agreements and market access (WTO accession; trade negotiation strategy…)(IV) Trade facilitation… customs procedures, transportation costs, red tapes and other behind-the-border barriers to trade… underlying causes of inefficiency(V) Sectoral analysis… sectors where trade has the biggest an impact on poverty reduction and human development (VI) Trade policy impact assessment (optional)… impact of trade policy options on poor(VII) Conclusions and action matrix… Recommendations in the form of an Action Matrix. Highlight capacity gaps and propose actions and technical assistance projects to overcome weaknesses….

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Action MatrixAction Matrix

Action recommendedAction recommended

Desired outcome and target indicatorDesired outcome and target indicator

Timeline for completion of actionTimeline for completion of action

Agencies involvedAgencies involved

Required resourcesRequired resources

Required donor supportRequired donor support

Important issues:• Action priorities• Matching with trade related technical assistance

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Current work on Current work on AfT Needs AfT Needs AssessmentsAssessments in Europe and the CIS in Europe and the CIS UNDP UNDP regional project: regional project: Wider Europe: AfT for Central Wider Europe: AfT for Central Asia, South Caucasus and Western CISAsia, South Caucasus and Western CIS (2009-2010) (2009-2010)

Project financed by the Government of FinlandProject financed by the Government of Finland

Component I: Component I: AfT in Central Asia: Identification of National AfT in Central Asia: Identification of National and Regional Prioritiesand Regional Priorities

Azerbaijan, Kazakhstan, Kyrgyzstan, Tajikistan, Azerbaijan, Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan Turkmenistan –– initiated (Uzbekistan initiated (Uzbekistan ––planned)planned)

AfT Road for SPECA Countries (Ministerial Conference AfT Road for SPECA Countries (Ministerial Conference planned for 2010)planned for 2010)

Component III: Component III: AfT Needs Assessments in South Caucasus AfT Needs Assessments in South Caucasus and Western CIS and Western CIS (planned for 2010)(planned for 2010)

Armenia, Belarus, Georgia, Moldova, UkraineArmenia, Belarus, Georgia, Moldova, Ukraine

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Thank you…Thank you…

UNDP UNDP Europe and the CIS Bratislava Regional CentreEurope and the CIS Bratislava Regional Centre

http://europeandcis.undp.orghttp://europeandcis.undp.org

Jacek.Cukrowski@undp.orgJacek.Cukrowski@undp.org

David.Luke@undp.orgDavid.Luke@undp.org

UNDP UNDP Geneva Trade and Human Development UnitGeneva Trade and Human Development Unit

http://undp.org/genevahttp://undp.org/geneva