aid for trade: changing context and world bank’s efforts
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Aid for Trade: Changing Context and World Bank’s Efforts. Richard Newfarmer Special Representative to the WTO and UN World Bank Geneva. Experts Group Meeting Aid for Trade, WTO Sept 15, 2008. Total Aid for Trade Commitments 2002-06 Constant 2005 US$. US$ Billion. - PowerPoint PPT PresentationTRANSCRIPT
Aid for Trade: Aid for Trade: Changing Context and World Bank’s Changing Context and World Bank’s
EffortsEfforts
Richard NewfarmerRichard Newfarmer
Special Representative to the WTO Special Representative to the WTO and UNand UN
World BankWorld Bank
GenevaGeneva
Experts Group MeetingExperts Group Meeting
Aid for Trade, WTO Aid for Trade, WTO
Sept 15, 2008Sept 15, 2008
Total Aid for Trade Commitments 2002-06 Constant 2005 US$
0
5
10
15
20
25
30
2002 2003 2004 2005 2006
0
0.2
0.4
0.6
0.8
1
1.2US$ Billion
Source: Bank Staff calculations based on OECD, CRS databaseSource: Bank Staff calculations based on OECD, CRS database
Aid for Trade -Trade Policy sub-Aid for Trade -Trade Policy sub-component (right scale)component (right scale)
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006
2020
4040
6060
8080
100100
Aid for TradeAid for Trade
Sector allocable aidSector allocable aid
Total aid excluding debt reliefTotal aid excluding debt relief
US$ Billion
Total Aid for Trade Commitments 2002-06 Constant 2005 US$
Source: Bank Staff calculations based on OECD, CRS databaseSource: Bank Staff calculations based on OECD, CRS database
Word of caution…increases in aid for trade are not Word of caution…increases in aid for trade are not automaticautomatic
Aid for trade can only expand if overall development assistance expands – and recent increases in overall aid have stalled Growth in core development assistance was 4% in real in 2006 v.
10% in 2005 and 5% in 2002-2006 Global slowdown may put pressure on budgets of OECD donors
Recent food-energy crisis has shifted priorities of Finance ministers in nearly all developing countries…and budget pressures have increased: Expenditures to support emergency consumption of the poorest Reductions in tariffs on food imports Energy costs of government Rising interest rates
Context is less hospitable… global economy is slowing and collapse of the Doha round will naturally turn attention of policy makers to other issues
Challenge is for Trade Ministers is to make Challenge is for Trade Ministers is to make aid for trade a national priority as a central aid for trade a national priority as a central part of growth agenda… Challenge for part of growth agenda… Challenge for donors is to realize promises of Gleneaglesdonors is to realize promises of Gleneagles
World Bank Group: Aid for Trade Commitments 2002-08
Source: Bank Staff calculations based on World Bank, Business Warehouse databaseSource: Bank Staff calculations based on World Bank, Business Warehouse database
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
4,500
5,000
2002 2003 2004 2005 2006 2007 2008
IDAIDA
US$ MillionsUS$ Millions
World Bank Group: Aid for Trade Commitments 2002-08
Source: Bank Staff calculations based on World Bank, Business Warehouse databaseSource: Bank Staff calculations based on World Bank, Business Warehouse database
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
18,000
20,000
2002 2003 2004 2005 2006 2007 2008
IDAIDA
US$ MillionsUS$ Millions
World Bank Group: Aid for Trade Commitments 2002-08
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
18,000
20,000
2002 2003 2004 2005 2006 2007 2008
Source: Bank Staff calculations based on World Bank, Business Warehouse databaseSource: Bank Staff calculations based on World Bank, Business Warehouse database
IBRDIBRD
IDAIDA
US$ MillionsUS$ Millions
World Bank Group: Aid for Trade Commitments 2002-08
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
18,000
20,000
2002 2003 2004 2005 2006 2007 2008
Source: Bank Staff calculations based on World Bank, Business Warehouse databaseSource: Bank Staff calculations based on World Bank, Business Warehouse database
IBRDIBRD
IDAIDA
IFCIFC
US$ MillionsUS$ Millions
Much of Bank trade-related lending goes to Africa–
12%
16%
67%
2%
3%
AFRAFR
EAPEAP
SARSAR
ECAECALCRLCR
Breakdown by region, IDA and IBRD, 2008
(narrow World Bank definition of trade-related)
Source: Bank Staff calculations based on World Bank, Business Warehouse databaseSource: Bank Staff calculations based on World Bank, Business Warehouse database
Project examples…Project examples…
Transport infrastructure (US$870 m. in FY08) Central Afric Transport and Transit Facilitation Mozambique-Malawi Transmission
Interconnection Second Central Transport in Tanzania Northern Delta Transport Development in
Vietnam Road Reconstruction and Improvement in
Honduras
Future projects in the pipeline Abidjan-Lagos Transportation and Transit
Project Kenya Northern Corridor Supplemental Ethiopia and Kenya Regional Interconnection
Project
Aid for trade is more than money: multidimensionalAid for trade is more than money: multidimensional
TrainingTraining: Over FY 2006-07, the WBG held an average of 48 trade-related training : Over FY 2006-07, the WBG held an average of 48 trade-related training courses (around 14,000 participant training days per year), courses (around 14,000 participant training days per year),
Technical assistance activitiesTechnical assistance activities (free-standing): 36 per year in 2006-2007 (free-standing): 36 per year in 2006-2007 Analytical and policy adviceAnalytical and policy advice (policy notes, country studies, regional studies): 72/year (policy notes, country studies, regional studies): 72/year GuaranteesGuarantees to leverage private finance: to leverage private finance:
Global Trade Finance Program US$2.5 b. since 2005 in revolving fund to stimulate Global Trade Finance Program US$2.5 b. since 2005 in revolving fund to stimulate trade financial flows to developing countries trade financial flows to developing countries
Provided US$770 million of guarantees in FY07, set to increase to US$1.3 billion in Provided US$770 million of guarantees in FY07, set to increase to US$1.3 billion in FY08. FY08.
144 banks in 57 developing countries.144 banks in 57 developing countries. Tools, indicators, research: Tools, indicators, research:
Logistics Performance IndexLogistics Performance Index World Trade IndicatorsWorld Trade Indicators Research: Services, poverty reduction, intellectual propertyResearch: Services, poverty reduction, intellectual property
www.Worldbank.org/www.Worldbank.org/tradetrade
Partnerships are integral to nearly all our activities Partnerships are integral to nearly all our activities Trust funds
Standards Development Forum IF and EIF Multi-donor Trust Fund Laos and Cambodia multi-donor trade trust funds
Lending: Cofinancing or Parallel Financing Development Policy Loan to Mauritius ADB has asked Bank to finance part of the Trade Faciliation Action Plan in the
Greater Mekong Delta
Research, Data and Training Research with private academics, RDBs, ILEAP, UNECA Training with WTO, Columbia University Data efforts with UNCTAD, ITC and WTO
Conclusions…Conclusions…
International community is poised to provide more aid for trade, but increasing activities at the country level depends on “effective demand”.
World Bank is ramping up its activities – particularly in trade facilitation and in basic infrastructure.
But those interested in aid for trade are encountering new “head winds”, so we’ll all have to work harder.
References
World Bank and IMF “Coping with New Strains in the Global Trading System: Doha Round, Food Prices and Aid for Trade” Staff Paper Prepared for the Executive Directors, forthcoming October 2008
Aid for Trade: Aid for Trade: Changing Context and World Bank’s Changing Context and World Bank’s
EffortsEfforts
Richard NewfarmerRichard Newfarmer
Special Representative to the WTO Special Representative to the WTO and UNand UN
World BankWorld Bank
GenevaGeneva
Experts Group MeetingExperts Group Meeting
Aid for Trade, WTO Aid for Trade, WTO
Sept 15, 2008Sept 15, 2008