1. Aid for Trade and Pacific Development Dr Chakriya Bowman Director, Economic Governance Programme PACIFIC ISLANDS FORUM SECRETARIAT

2. Pacific Plan for Strengthening Regional Cooperation and Integration Leaders believe the Pacific region can, should and will be a region of peace, harmony, security and economic prosperity, so that all of its people can lead free and worthwhile lives. We treasure the diversity of the Pacific and seek a future in which its cultures, traditions and religious beliefs are valued, honoured and developed. We seek a Pacific region that is respected for the quality of its governance, the sustainable management of its resources, the full observance of democratic values and for its defence and promotion of human rights. We seek partnerships with our neighbours and beyond to develop our knowledge, to improve our communications and to ensure a sustainable economic existence for all. PACIFIC ISLANDS FORUM SECRETARIAT

3. Pacific Plan for Strengthening Regional Cooperation and Integration Goal: Enhance and stimulate economic growth, sustainable development, good governance and security for Pacific countries through regionalism. Economic Growth Objectives: 1. Increased sustainable trade (including services), and investment 2. Improved efficiency and effectiveness of infrastructure development and associated service delivery 3. Increased private sector participation in, and contribution to, development PACIFIC ISLANDS FORUM SECRETARIAT

4. Cairns Compact on Strengthening Development Coordination in the Pacific Outcome of 2009 Forum Leaders Meeting in Cairns, Australia Recognises that: – Despite high levels of aid, the Pacific is off-track to meet its Millennium Development Goals and the need to significantly improve development outcomes; – Broad-based private sector-led growth is essential for economic development and poverty alleviation – Country leadership, mutual accountability and mutual responsibility between Forum island countries and development partners is fundamental to successful development outcomes Focus on harmonisation, alignment and aid effectiveness through shared monitoring and reporting mechanisms PACIFIC ISLANDS FORUM SECRETARIAT

5. Operating Framework Economic development supports social development – Pacific Plan prioritises fostering economic development and promoting opportunities for broad-based growth – Increased employment and income creates wealth to spend on health, education for both individuals and governments – Economic empowerment helps women to escape violence, strengthens equality Private sector growth is a priority and a challenge for the Pacific – Need to diversify away from aid dependency – Supports national sovereignty and autonomy – Creates jobs for communities – Stops brain drain and migration PACIFIC ISLANDS FORUM SECRETARIAT

6. Pacific Aid for Trade Strategy Developed in 2009 and endorsed by Pacific ACP Trade Ministers Based on OECD/DAC Aid for Trade framework Provided guidance for early work on Aid for Trade Highlighted the need to improve access to and use of aid for trade in the region – Particularly in regard to country integration in national plans. Refresh and Renew process underway in 2011 to strengthen the strategy in light of EPA, PACER Plus, WTO accessions Roadmap for the development of a regional Facility – Based on significant and strong consultative processes with all stakeholders to ensure needs are met and agreement can be reached. – Progress in tandem with a strengthened and refreshed Pacific Aid for Trade Strategy PACIFIC ISLANDS FORUM SECRETARIAT

7. Pacific Aid for Trade: A New Framework Cairns Compact provides the framework – Aid effectiveness compact based on Paris and Accra – Supported by Australia, New Zealand and EU – Commitment to the close alignment of regional aid efforts with regional priorities – as identified by Leaders, including through the Pacific Plan and Leaders other initiatives on regional trade and economic integration Climate Change initiatives will lead the way – Significant and focused international efforts to create mechanisms for donor coordination – Volume of aid, importance of issues means this will be focused on and progressed in a way that has not been possible with Aid for Trade PACIFIC ISLANDS FORUM SECRETARIAT

8. Challenges: Securing Aid for Trade Many development partners – Australia, New Zealand, European Union – WTO, World Bank/IFC, ADB – Investment Banks Many programs under many development partners – e.g EU has Tradecom, Hub and Spokes, ACP MTS, EDF Regional and Bilateral, Proinvest, – All have differing application processes PACIFIC ISLANDS FORUM SECRETARIAT

9. Challenges: Improving Implementation Many Aid for Trade projects, particularly technical assistance, are not regarded as successful – Limited outcomes, little obvious capacity built – Capacity building vs capacity supplementation – Private sector particularly cynical Must dramatically improve management, reporting, evaluation of Aid for Trade projects if we are to continue to receive funds from donors PACIFIC ISLANDS FORUM SECRETARIAT

10. Challenge: Creating Regional Resources Aid for Trade Advisory Team at Forum Secretariat – Funding is almost secured to establish by end of 2011 – Will provide assistance in identifying, applying for and managing Aid for Trade projects Coordinating donors and countries as Aid for Trade projects are undertaken Providing training and technical assistance for securing and implementing projects at both regional and national level Will move to help partners build project management, evaluation and reporting skills Focus on those programs implemented by Ministries and Departments of Trade, Customs, Commerce Will not address infrastructure or energy issues. – Will work with a dedicated Aid for Trade Officer at the Forum Office in Geneva To focus on liaison and cooperation with EU-based institutions PACIFIC ISLANDS FORUM SECRETARIAT

11. Challenge: Making Better Use of Market Access Trade promotion is essential to help countries take advantage of agreements and frameworks negotiated – But it is complex, requires a private sector focus, innovative approaches, and deep export market knowledge Pacific Islands Trade and Invest – Auckland, Beijing, Sydney, Tokyo – Innovation Lonely Planet initiative to promote small-scale and independent tourism Creative Industries work through Sydney office – Integrated with Intellectual Property/Traditional Knowledge approaches – New frameworks and approaches Internships for Pacific trainees Partnerships with the private sector, regional representative organisations and trade promotion agencies in development partners PACIFIC ISLANDS FORUM SECRETARIAT

12. Way Forward Pacific recognises the importance of Aid for Trade to its development and future economic prosperity Strengthened and refreshed Pacific Aid for Trade Strategy will guide the regions work – Under the Pacific Plan and Cairns Compact frameworks Regional approaches will increase support for identifying and securing Aid for Trade – And will provide capacity development to ensure aid effectiveness Private sector engagement, particularly in trade development and promotion, will be the key to success – Must help the region to make full use of the agreements negotiated. PACIFIC ISLANDS FORUM SECRETARIAT