Enhanced Integrated Framework yet to become effective

The Enhanced Integrated Framework (EIF) programme of the World Trade Organisation (WTO) that appeared to have reached the dead end is going to have its mandate extended from 2016 into a new phase. Meant to facilitate the least developed countries (LDCs) with a range of support services in removing their asymmetries in global trade as a whole, the IEF, a multi-donor programme, despite much hype at its start way back in 1997, has not delivered what it was expected to. As the WTO Director General has said, "Trade can be an effective tool for economic growth and poverty reduction when the right conditions exist. The EIF was established precisely to help LDCs create those conditions."

The Integrated Framework was established in 1997 at the High-Level Meeting on the LDCs' Trade Development held at the WTO. The core partner agencies of the WTO included the International Monetary Fund (IMF), the International Trade Centre (ITC), the United Nations Conference on Trade and Development (UNCTAD), the United Nations Development Programme (UNDP) and the World Bank (WB). In a bid to help the LDCs in a wide range of activities, the broad framework of the objectives of the IEF were to:

n mainstream trade into national development strategies;

n set up structures needed to coordinate the delivery of trade-related technical assistance; and,

n build capacity to trade which also includes addressing critical supply side constraints.

It is well established that the LDCs are essentially characterised by constraints such as low per capita income, low level of human development, and economic and structural handicaps to growth that limit their resilience to vulnerabilities. The LDCs, with a total population of 880 million, represent the poorest and weakest segment of the international community. The share of the LDCs in world trade in goods at its present level is only 1.8 per cent, and is highly concentrated on a few export products. The LDCs' share in world trade in services remains at only 0.5 per cent.

In recognition of these, there was consensus among the donors to identify the precise areas where the LDCs needed the support most. It was then observed that lack of infrastructure, bottlenecks in transit transport, energy and communications, inadequate policy and regulatory framework severely affect the LDCs' capacity to harness their trade potential. Supply-side constraints such as limited productive capacity, reliance on primary commodities, poor value addition to exports, inability to meet international standards, inadequate technology and know-how and limited access to markets and finance strongly limit their competitiveness.

A separate package dubbed Aid for Trade (AFT) was also created to help the LDCs overcome the problems, most of which were embedded in the underdeveloped syndrome of these countries in varying degrees. The activities of the AFT and the EIF thus overlapped as the facilitating services were largely similar to both these programmes. Aid for Trade in general and the EIF in particular were designed to help the LDCs through interventions aimed at supporting national trade policy formulation and integration in national development strategies, improving productive capacities, addressing supply side constraints and ensuring coordination among the various development actors and in close consultation with the private sector.

Despite the lofty objectives, the WTO remains less than transparent in quantifying the services offered to and benefits gained by the target countries, and as a result, for most countries these are not at all visible. However, a few questions need to be answered, especially with regard to infrastructure development, standards compliance, improvement of productive capacities and increasing market access of manufactured goods.

In case of Bangladesh, for example, there has hardly been any initiative to improve trade-related infrastructure under the EIF programme. The same applies to the other actions that were supposed to be in place during the tenure of the programme. The current phase of the EIF is coming to an end in December 2015. It thus seems a trifle ironical when the WTO Director General, while addressing the recently-held EIF Steering Committee, has said that the next phase of the EIF beginning in 2016 will start from the achievements of the first phase of the programme. "Let's build on the successes to date, and undertake the necessary reforms to deliver more results, in a more effective, efficient and sustainable way", he said. Although the WTO-DG has claimed that the programme has been making a difference on the ground through increased private sector development and employment in some of the poorest countries, it is the LDCs who should speak out about the concrete gains they have so far attained from the programme.

Now that the EIF is set to enter its second phase, it is important for it to address the needed reforms in key areas in order to improve the efficiency, effectiveness and sustainability of the programme itself. In doing so, stock-taking of past activities (not just in numbers) and evaluation of tangible results will be helpful in framing future course of actions.

wasiahmed.bd@hotmail.com