High level Arab experts Meeting on the High level Arab experts Meeting on the preparation for the preparation for the

77thth WTO Ministerial Conference WTO Ministerial Conference

Elmostafa AITAMORElmostafa AITAMORBeirut, 11-12 November 2009Beirut, 11-12 November 2009

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Aid for TradeAid for TradeIslamic Development BankIslamic Development Bank

AfT: context and meaningAfT: context and meaning AfT and WTOAfT and WTO AfT monitoring framework AfT monitoring framework AfT and global reviewAfT and global review IDB Group & AfT: contributions and IDB Group & AfT: contributions and

targetstargets AfT & Arab regionAfT & Arab region

Aid for tradeAid for trade

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Aid for Trade: Aid for Trade: the contextthe context

Trade: necessary Trade: necessary not sufficient.not sufficient.

Associated costs: liberalization incurs Associated costs: liberalization incurs adjustment costs: necessary exporting adjustment costs: necessary exporting infrastructure, technology and knowledge infrastructure, technology and knowledge to meet product standards. to meet product standards.

Additional costs needed to realise the full Additional costs needed to realise the full benefits of new market opportunities.benefits of new market opportunities.

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Aid for Trade: Aid for Trade: the contextthe context

Doha Development Round 2001.Doha Development Round 2001.

Trade has the potential to be an engine for Trade has the potential to be an engine for growth.growth.

But many developing countries face But many developing countries face barriers that prevent them from benefiting barriers that prevent them from benefiting from the world trading system.from the world trading system.

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Aid for Trade: Aid for Trade: the contextthe contextSome of these barriers are in Some of these barriers are in export marketsexport markets

But But internal barriersinternal barriers : can be just as difficult for : can be just as difficult for exporters to overcome.exporters to overcome.

Targeting these “Targeting these “supply-sidesupply-side” constraints is what ” constraints is what Aid for Trade is all about.Aid for Trade is all about.

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What is Aid for Trade?What is Aid for Trade?

Aid for Trade is not a new global development fund Aid for Trade is not a new global development fund but part and parcel of normal programmable ODA but part and parcel of normal programmable ODA (grants and concessional loans). (grants and concessional loans).

There is no new funding mechanism involved. There is no new funding mechanism involved. Existing mechanisms will be used by multilateral, Existing mechanisms will be used by multilateral, regional and bilateral donors to disburse ODA.regional and bilateral donors to disburse ODA.

Aid for Trade is Aid for Trade is not a substitutenot a substitute, but a complement , but a complement . .

What is Aid for Trade ?What is Aid for Trade ?

Aid for trade involves the flow of Aid for trade involves the flow of development finance from rich to poor development finance from rich to poor countries for the purpose of enhancing countries for the purpose of enhancing the world trading system.the world trading system.

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Aid for Trade: Aid for Trade: coveragecoverage

Assistance for trade policy and regulation.Assistance for trade policy and regulation.

Improving infrastructure.Improving infrastructure.

Building productive capacity.Building productive capacity.

Adjustment assistance to deal with trade Adjustment assistance to deal with trade

liberalization.liberalization.

Aid for Trade & WTOAid for Trade & WTO

Aid for Trade initiative launched at Aid for Trade initiative launched at Hong Kong (Dec. 2005).Hong Kong (Dec. 2005).

Para 57 of the WTO HKMD invited the WTO Para 57 of the WTO HKMD invited the WTO DG to consult with “… international DG to consult with “… international organisations … with a view to report to the organisations … with a view to report to the General Council on appropriate mechanisms General Council on appropriate mechanisms to ensure additional financial resources for to ensure additional financial resources for Aid-for-trade, where appropriate, through Aid-for-trade, where appropriate, through grants and concessional loans.”grants and concessional loans.”

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Aid for Trade & WTOAid for Trade & WTO

2006: A Task Force to draw up 2006: A Task Force to draw up recommendations on how to operationalize recommendations on how to operationalize Aid for Trade:Aid for Trade:

““demand-side”,demand-side”, the donor “response”, the donor “response”, bridging the gap between “demand” and bridging the gap between “demand” and “ “response”. response”.

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AfT Monitoring FrameworkAfT Monitoring Framework

Global level Global level : using data compiled by the : using data compiled by the OECDOECD

Donor level Donor level : based on self evaluations : based on self evaluations

Country and regional level Country and regional level : based on self : based on self assessmentsassessments

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AfT Global Review AfT Global Review

Global review mechanism to monitor periodically Global review mechanism to monitor periodically what happens at country level and assess progress what happens at country level and assess progress in the implementation.in the implementation.

The first Global Review of Aid for Trade was held in The first Global Review of Aid for Trade was held in November 2007.November 2007.

The Review emphasized the need to improve The Review emphasized the need to improve monitoring and evaluation, including monitoring monitoring and evaluation, including monitoring impact of AfT.impact of AfT.

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AfT Global Review AfT Global Review : : RoadmapRoadmapMoving from commitment to implementationMoving from commitment to implementation

Reinforce the AfT regional dimension, Reinforce the AfT regional dimension,

– Maintain momentum on commitments Maintain momentum on commitments post 2010,post 2010,

Enhance the role of the private sector, Enhance the role of the private sector,

Focus attention towards evaluating the Focus attention towards evaluating the impact of AfT interventions. impact of AfT interventions.

OIC MCs tradeOIC MCs trade

2007 : overall trade of IDB MCs : US$ 2007 : overall trade of IDB MCs : US$ 2.6 trillion.2.6 trillion.

2004: 14% (333 billion).2004: 14% (333 billion).

2007: 17% (421 billion).2007: 17% (421 billion).

2015 target: increase intra-OIC trade 2015 target: increase intra-OIC trade to 20%.to 20%.

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IDB MCs TradeIDB MCs Trade Supply side constraints and obstaclesSupply side constraints and obstacles

Lack of investment;Lack of investment;Poor infrastructure;Poor infrastructure;Infrastructure management;Infrastructure management;Institutional capacities;Institutional capacities;Credit availabilities;Credit availabilities;Costly regulation;Costly regulation;tariff and para-tariff obstacles;tariff and para-tariff obstacles;Administrative procedures and banking;Administrative procedures and banking;

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IDB Group’s main role IDB Group’s main role

IDB assist its 56 Member countries to achieve IDB assist its 56 Member countries to achieve their economic and developmental goals:their economic and developmental goals:

Poverty reduction;Poverty reduction;

Growth;Growth;

Economic and social development.Economic and social development.

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IDB’s trade financing schemesIDB’s trade financing schemes

Export Financing Scheme;Export Financing Scheme;Import Trade Financing Operations; Import Trade Financing Operations; Islamic Bank’s Portfolio for Investment and Islamic Bank’s Portfolio for Investment and Development;Development;Unit Investment Fund;Unit Investment Fund;ICD (Private Sector).ICD (Private Sector).ICIEC;ICIEC;ITFC (2006);ITFC (2006);

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IDB Group’sIDB Group’sStrategic initiativesStrategic initiatives

Task force on raising trade;Task force on raising trade;ITAP (investment promotion Assistance ITAP (investment promotion Assistance Program);Program);Technical Assistance program for the TNC Technical Assistance program for the TNC and TPS-OIC.and TPS-OIC.

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IDB Group’sIDB Group’sRoad map (2008)Road map (2008)

Trade financing;Trade financing;

Trade promotion;Trade promotion;

Trade facilitation;Trade facilitation;

Trade capacity development;Trade capacity development;

Promoting and developing strategic commodities Promoting and developing strategic commodities originating from MCs.originating from MCs.

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IDB contributionIDB contribution

US$ 34 billion: IDB’s trade financing;US$ 34 billion: IDB’s trade financing;

2008: US$ 2.5 billion by ITFC;2008: US$ 2.5 billion by ITFC;

72 projects for trade promotion and Trade 72 projects for trade promotion and Trade facilitation in 36 MCs;facilitation in 36 MCs;

2008: US$ 347 million approved by ICD.2008: US$ 347 million approved by ICD.

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IDB’s contributionIDB’s contribution

Food crisis: 2008 Jeddah Declaration Initiative: Food crisis: 2008 Jeddah Declaration Initiative: 1.5 billion (a five years assistance package).1.5 billion (a five years assistance package).

Strengthens food security and revitalizes the Strengthens food security and revitalizes the agriculture sector.agriculture sector.

Financial crisis: scale up its operations, adding Financial crisis: scale up its operations, adding US$ 2.5 billion 2009-2011.US$ 2.5 billion 2009-2011.

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IDB targetsIDB targets

Food sector support;Food sector support;Focus on infrastructure: transport, Focus on infrastructure: transport, communication, energy;communication, energy;Focus on capacity development through Focus on capacity development through south-south cooperation;south-south cooperation;Co-financing large projects in sub-regions.Co-financing large projects in sub-regions.

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IDB Group new visionIDB Group new vision2009-20112009-2011

Five key areas for poverty reduction:Five key areas for poverty reduction:

1)1)Comprehensive human development;Comprehensive human development;2)2) Infrastructure development;Infrastructure development;3)3)Regional economic cooperation/integration;Regional economic cooperation/integration;4)4)Productive capacity development;Productive capacity development;5)5)Private sector development. Private sector development.

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IDB & AfT regionallyIDB & AfT regionally

Meeting SPECA region, march 2009, 2010Meeting SPECA region, march 2009, 2010

2010: ESCWA Road Map2010: ESCWA Road Map1.1. Arab region pArab region priority needsriority needs in relevant areas in relevant areas2.2. promote & support future AFT debatepromote & support future AFT debate

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AfT & Arab RegionAfT & Arab Region

3.3. Assist member countries and donors in Assist member countries and donors in surveying AFT surveying AFT

4.4. Monitor & assess the impact & efficiencyMonitor & assess the impact & efficiency of of tailored AFT funding on productive capacity & tailored AFT funding on productive capacity & trade performancetrade performance

5.5. Continue to provide target-oriented technical Continue to provide target-oriented technical assistanceassistance for member countries for member countries

6.6. Encourage dialogueEncourage dialogue between member between member countries, donors and relevant regional countries, donors and relevant regional organizationsorganizations

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Thank you for your attentionThank you for your attentionElmostafa AITOMARElmostafa AITOMAR

WTO ExpertWTO ExpertCooperation DepartmentCooperation Department

IDBIDBeaitamor@isdb.orgeaitamor@isdb.org

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