International Conference on Linkages between Trade, Development & Poverty

Civil Society Organisations & Aid for Trade – Roles & RealitiesNairobi, Kenya, 15-16 March 2007

AfT Progress and ChallengesPresented by Margaret K. Chemengich

16th March 2007

AfT Progress and ChallengesWhat is the current state of progress in the AfT

process?

• Guidelines have agreed upon at the WTO level, indicators are yet to be agreed upon

• Sensitisation of many stakeholders at the international level, but limited stakeholder sensitisation locally

• Pledges by a number of countries continue to increase, Japan $10 billion over three years; USA $2.7 b by 2010; EU euro2b per year by 2010; UK $740 m. Access to the resources is yet to be operationalised

• Main issue is that the proposals are are of best endeavour

AfT Progress and Challenges (2)The current state of progress in the AfT process• Enforcement problems in light of suspended WTO

talks in spite of the position that AfT can continue while WTO is in suspension

• Donors are implementing AfT with optional rules, with the majority still insisting on priority areas which are conflicting with recent country priorities

• Demand driven support might deny a number of recipient countries the opportunity to use such resources. Most LDCs and developing countries have limited capacities to identify their priority issues

• Building AfT on existing initiatives, eg IF

AfT Progress and Challenges (3)The current state of progress in the AfT process

• A number of donors eg EC supports regional integration and trade related support. However, they influence the priorities of the region

• Wider involvement of stakeholders from the public, private and civil at national to regional level, but limited participation at international level

• Enforcement of the Paris Declaration on Aid effectivieness is still wantinga

What needs to be done at to take forward AfT?

• The critical issue that should be addressed by AfT is the paradym shift in which the LDC and developing countries trading performance is declining with the the advent of globalisation/regionalism providing wider market access/opportunities; and yet all other countries are experiencing growth, development and trade expansion.

• In nearly all the LDCs and developing countries poverty has deepened with liberalisation, privatisation and globalisation. There is therefore need to evaluate every critical issue with a view to turning around both structural and economic issues.

What needs to be done at to take forward AfT? (2)

These will call for some initiatives to be undertaken at the national and international level.

At the National level:• Improve analytical capacity with a view to

understanding the underlying issues to the trade performance and economic undergedelopmes

• Lack of productive capacities to respond and take advantage of market opportunities at global, preferntial opoortunities

• Inability to take advantage of niche markets, making use of inernate trade which provides equal access opportunities for the developed and developing countries

• Skills development

What needs to be done at to take forward AfT? (3)

Initiatives at the International level (Cont’d):

• Enforcement of pledges and make resources available to LDC and developing countries

• Enforce fair trade rules

• Avoid disinformation, eg carbon/miles for developing country exports when they already meet stringent standards

• Maintain coherence across key support institutions

What needs to be done at to take forward AfT?

Initiatives at the National level (Cont’d):

• Investing on technology, expanding FDI, pattnerships,

• Information dissemination using different modes of media to improve outreach

• Increase stakeholder participation in both policy making process and negotiations, prioritisation of the trade activities,

• Identify issues affecting competitiveness,• Analyse linkages between trade policies and

poverty reduction,• Identify supply capacity constraints, address trade

related infrastructure, adjustment costs associated with liberalisation

How AfT is linked to DDA and to development and poverty reduction?

• AfT will address supply capacity constrints which have been a major hindrance to increased trade flows in light of the increased trade opennings for LDCs and developing countries under globalisation

• In addition adjustment costs have also been incorporated in principle though in reality resource flow still remains a problem

• Addressing of supply responses and reforms in the policy and legal frameworks

Linking AfT to DDA and to development and poverty reduction?

• WTO advocacy role in committing developed countries to raise additional resources

• WTO monitoring roles and impact assessments to see if DDA rounds initiatives have been adhered to

• WTO to monitor aid effectiveness

• WTO advocacy with Ministers of finanace to put more resourses for trade and trade related issues

• Make enterprises competitive and mainstreaming of MSMEs

Incorporating Stakeholder views into providing AfT?

• Provide information to stakeholders

• Undertake capacity building activities at all levels of private, public and civil society

• Operate with same rules irresptive of who the donor is. This will ensure that resources are disbursed timely and less time is spent on beuracracy

• Employ basket funding and cut out on bureacracies in both directions

• Under take sector wide approaches to support trade sector

Incorporating Stakeholder views into providing AfT

• Improve on market signals so that resources are utilised effectively

• Improve analytical capacities of recipient countries, this would ensure demand driven approach

• Direct beneficieries to start paying for information and training

• Turning recipients to be consumers by way of ownership of programmes

Incorporating Stakeholder views into providing AfT

• Stronger voice of the civil society; institutionalise stakeholder participation

• Strong support institutions

• Tap into local knowledge of the economies

• Mainstreaming trade into development for policy coherence and improve on coordination

• Build on South-South corporation

Challenges

• Overall the challenges of involving the the south CSOs in AfT initiatives relate to limited capacities to analyse implications of situations on the ground, lack of resources to participate, limited partnerships with government, private sector, research institutions and academia, etc

• The preparatory process has taken quite long. There may be too shot a time for implementation