AID FOR TRADE JOHN S. WILSON THE WORLD BANK JOHN S. WILSON THE WORLD BANK NEW YORK JULY 15, 2010 NEW YORK JULY 15, 2010

I -Aid for trade – why it matters II - Supply, demand, and effectiveness III – Looking Ahead - LDCs OBJECTIVE AND OVERVIEW 07/15/20102

WHAT AND HOW MUCH? Aid for trade – official development assistance Trade policy and regulatory reform Trade capacity Infrastructure Total aid for trade $40 billion (2008) About 27% of total official development assistance Aid for trade – official development assistance Trade policy and regulatory reform Trade capacity Infrastructure Total aid for trade $40 billion (2008) About 27% of total official development assistance 07/15/20103

AID FOR TRADE COMMITMENTS ODA commitments (constant 2008 US$ million) Source: OECD CRS ODA commitments (constant 2008 US$ million) Source: OECD CRS /15/20104

WHY AID FOR TRADE MATTERS to LDCs Supports trade as engine of growth Enhance diversification Fight protectionism and support for global and regional trade agenda Lowers trade costs – more critical given fragile and changed global demand; higher financing costs Supports trade as engine of growth Enhance diversification Fight protectionism and support for global and regional trade agenda Lowers trade costs – more critical given fragile and changed global demand; higher financing costs 07/15/20105

Performance Rankings: LLDCs / LDCs / OECD LLDCs*LDCs**OECD LPI (Average Score) DB Time to Export (days) DB Time to Import (days) DB Import (US$)3,4002,1451,146 DB Export (US$)2,7581,7731,090 07/15/2010 * Land Locked Countries ** Least Developed Countries Sources: Doing Business 2009; Logistics Perception Index

Gains to Reform and Capacity Building 07/15/2010 Sources: World Bank estimates in Portugal and Wilson,

QUESTIONS MOVING FORWARD Are countries most in need getting aid for trade? Is aid for trade effective? A new agenda for LDCs -- with G-20 support (Hoekman Wilson 2010) Are countries most in need getting aid for trade? Is aid for trade effective? A new agenda for LDCs -- with G-20 support (Hoekman Wilson 2010) 07/15/20108

DOES DEMAND MATCH SUPPLY? 07/15/20109

WHAT ABOUT AID EFFECTIVENESS? World Bank research. Examine rate of return on investment. Inform priorities – global level. $1 invested in trade policy & regulatory reform = $697 trade. World Bank research. Examine rate of return on investment. Inform priorities – global level. $1 invested in trade policy & regulatory reform = $697 trade. 07/15/201010

AID TYPES & RATES OF RETURN *Based on estimates in Helble, Mann, Wilson (2009). 07/15/201011

SUMMARY CONCLUSIONS Commitments on aid for trade solid. But critical gaps remain Basic data, analysis of effectiveness Need to leverage large infrastructure investment Greater clarity and coordination going forward Unique time to build on achievements to date and drive a high profile agenda. Commitments on aid for trade solid. But critical gaps remain Basic data, analysis of effectiveness Need to leverage large infrastructure investment Greater clarity and coordination going forward Unique time to build on achievements to date and drive a high profile agenda. 07/15/201012

PRIORITIES - AID FOR TRADE 1.Expand South-South knowledge exchange with strategic initiative of policy dialogue and advice by bringing middle-income G20 countries into the aid for trade initiative. 2.Create a new public-private partnership to harness the dynamism and expertise in the private sector. The World Bank is developing an Aid for Trade Facilitation Public Private Partnership which could serve as a model. 1.Expand South-South knowledge exchange with strategic initiative of policy dialogue and advice by bringing middle-income G20 countries into the aid for trade initiative. 2.Create a new public-private partnership to harness the dynamism and expertise in the private sector. The World Bank is developing an Aid for Trade Facilitation Public Private Partnership which could serve as a model. 07/15/201013

PRIORITIES - AID FOR TRADE 3.Provide dedicated financial support for a global program of monitoring and evaluation of aid for trade anchored in systematic data collection and research. 4.Promote market access for low income countries through a commitment by all G20 members to eliminate import restrictions for LDCs, thus stimulating South-South trade and leveraging return on aid for trade disbursements. 3.Provide dedicated financial support for a global program of monitoring and evaluation of aid for trade anchored in systematic data collection and research. 4.Promote market access for low income countries through a commitment by all G20 members to eliminate import restrictions for LDCs, thus stimulating South-South trade and leveraging return on aid for trade disbursements. 07/15/201014

JOHN S. WILSON THE WORLD BANK THANK YOU 07/15/201015