How to build a sustainable framework How to build a sustainable framework for endogenous-led capacity for endogenous-led capacity development in the trade-related sectordevelopment in the trade-related sector

Phnom Penh, 5 February 2008

Fabio Artuso ( Fabio.Artuso@ec.europa.eu )

EC Delegation in Bangkok

OutlineOutline

Overview on EU Trade Related Assistance

Trade-Related Capacity Development

(Doha, OECD/DAC, EC approach)

The way forward

EU Trade Related AssistanceEU Trade Related AssistanceOverviewOverview

Commitments TRA by donor 2001-2005

4,985, 56%2,327, 26%

209, 2%

261, 3%

168, 2%

136, 2%

429, 5%

370, 4%

EU

USA

Japan

Switzerland

Canada

Norway

World Bank

Others

source: 2006 Joint WTO/OECD report on TRA

EU Trade Related AssistanceEU Trade Related Assistance“EU Aid for Trade Strategy”“EU Aid for Trade Strategy”

“EU Strategy on Aid for Trade: Enhancing EU support for trade-related needs in developing countries” – published on 29/10/07

More, better and quicker aid for trade

Clear picture of how the EU intends to respond to the recommendations of the WTO 2006 Taskforce on AfT

EC Trade Related AssistanceEC Trade Related AssistanceDisbursementsDisbursements

OWNERSHIP is at the core of the new strategy: beneficiary countries must integrate trade-related needs into their development strategies and assistance requests

EC Trade Related AssistanceEC Trade Related AssistanceThe Paris DeclarationThe Paris Declaration

Source: OECD/DAC

Trade-related Capacity DevelopmentTrade-related Capacity Development

The Doha DeclarationThe Doha Declaration

Doha Declaration (2001):

“We confirm that technical cooperation and capacity building are core elements of the development dimension of the multilateral trading system…”

“We underscore the urgent necessity for the effective coordinated delivery of technical assistance with bilateral donors…”

Trade-related Capacity DevelopmentTrade-related Capacity DevelopmentOECD/DAC GuidelinesOECD/DAC Guidelines

OECD/DAC “Guidelines on Strengthening Trade Capacity for Development”

Trade Capacity Building enhances the ability of policymakers, enterprises and civil society in developing countries to:

Collaborate in formulating and implementing a trade development strategy embedded in a broader national development strategy;

Increase the volume and value-added of exports, diversify export products and markets and increase foreign investment to generate jobs and exports;

Participate in – and benefit from – the institutions, negotiations and processes that shape national trade policy and the rules and practices of international commerce.

Trade-related Capacity DevelopmentTrade-related Capacity DevelopmentOECD/DAC GuidelinesOECD/DAC Guidelines

The Guidelines suggest that donors and developing countries should seek to construct trade policy frameworks with the following elements:

Coherent trade strategy overall development strategy

Effective mechanisms for consultation

Effective mechanisms for intra-governmental policy co-ordination A strategy for the enhanced collection, dissemination, and analysis of

trade-related information

Trade policy networks

Private sector linkages

A commitment to outward-oriented regional and global strategies

Trade-related Capacity DevelopmentTrade-related Capacity DevelopmentOECD/DAC GuidelinesOECD/DAC Guidelines

Suggestions to Donors:

Co-ordinate more closely TCB activities are comprehensive

in scope and integrated in execution Foster local ownership and participation Embrace approaches that strengthen the ability of

partner countries to continue helping themselves once donors have left

Strengthen donors' own trade-related capacities Commit significant financial and personnel resources

EC approach to Capacity DevelopmentEC approach to Capacity Development- Consider organisations as “open systems” -- Consider organisations as “open systems” -

EC approach to Capacity DevelopmentEC approach to Capacity Development- Focus on products and services -- Focus on products and services -

Look at the outputs of the organisation: products and services

Capacity development must result in specific changes in output

EC approach to Capacity DevelopmentEC approach to Capacity Development- Explore the context, the inputs – and then go inside -- Explore the context, the inputs – and then go inside -

Before looking inside the organisation, explore structural and institutional drivers of and constraints to change in the context

Look for stakeholders – they make and break change!

Consider the Inputs and resources

Then, finally, look at the rest of the “inside” elements

EC approach to Capacity DevelopmentEC approach to Capacity Development- Dig deeper to get a solid diagnosis -- Dig deeper to get a solid diagnosis -

Look for both formal and informal aspects of organisations

Look for both the “functional-rational” dimension and the “political” dimensions of organisations

EC approach to Capacity DevelopmentEC approach to Capacity Development- Change and CD are mostly domestic processes -- Change and CD are mostly domestic processes -

External factors are often powerful drivers of capacity change – but committed insiders must lead

A change strategy is required

EC approach to Capacity DevelopmentEC approach to Capacity Development- Roles of and instruments for donors -- Roles of and instruments for donors -

Make sure that the partner can and will lead!

Assist the partner to define realistic CD targets in terms of changes in organisational outputs

Donors can play a catalytic role, engage to build up demand for change, provide access to knowledge, pilot different approaches, facilitate dialogue between domestic stakeholders

Trade-related Capacity DevelopmentTrade-related Capacity DevelopmentThe way forwardThe way forward

TCD should build upon and foster the process

for formulating and delivering trade policy

What delivery mechanisms can be used to boost effectiveness of programmes supporting TCD?

The way forwardThe way forwardHow can we enhance TCD effectiveness?How can we enhance TCD effectiveness?

Need to improve donor-donor coordination donor-recipient coordination

Fora for discussion and coordination

Shared analysis / joint diagnostic reviews

Use existing Government’s structures to channel TRA and provide support to strengthen them

Use common arrangements and procedures: programmatic approaches to be supported through basket funding

The way forwardThe way forwardIncrease use of Sector Wide ApproachesIncrease use of Sector Wide Approaches

They way forwardThey way forwardSWAps and Basket Funding ArrangementsSWAps and Basket Funding Arrangements

Other Sector national budgetrevenues support

‘Pool Fund’Donor XDonor Y

Do

no

r X

Through Treasury

Co-financed activities

Projects

Sector Programme

Do

no

r Z

PPP

Own funds

The way forwardThe way forwardThe role of UN agencies and IFIsThe role of UN agencies and IFIs

Need to avoid duplication and competition

Focus on areas where UN bodies have a respective comparative advantage

UNCTAD XII: work on establishing a list of comparative advantages in TA provided among UN agencies [or establish a list of good practices or success stories for each organisation]

Thank you for your attention!

Fabio Artuso

Fabio.Artuso@ec.europa.eu