Operationalising 'Aid for Trade' initiative
Saturday, 29 September 2007
Ensuring equitable benefits from an inclusive process of globalisation is a pressing priority in order to enable the less developed economies reap the best dividends out of trade liberalisation. In this context, the need for restructuring the aid policy of both multilateral and bilateral donors to suit the needs of the least developed countries (LDCs), in particular, can hardly be overemphasised. Bangladesh has sought to draw the attention of the donor community to do the needful at the earliest for meeting this need at the recent conference -- Mobilising Aid for Trade: Focus Asia and the Pacific -- in Manila. If aid does not contribute to enhancing the capacity of the LDCs to export more to the international markets, then their economic plight will further worsen, depriving them of the benefits of globalisation. The share of the LDCs in global trade has not increased much over the years even after the operationalisation of the World Trade Organisation (WTO). On their part, the LDCs have embraced trade liberalisation as a matter of policy for better integration of their economies into, what is now called, the global village. But the rich nations as well as the relatively advanced developing economies have not yet redeemed their promises to the LDCs about unhindered market access, trade-creating supporting facilities.
In this backdrop, Finance Adviser Mirza Azizul Islam who led the Bangladesh delegation to the afore-mentioned Manila conference on aid for trade that was co-hosted by the Asian Development Bank (ADB), the WTO and the Philippine government, urged the major donors to extend "focused" aid to the less developed countries for enabling the latter "to prepare the groundwork for increased trade and derive the benefits of globalisation". Aid should, thus, be focused on supporting effective efforts of the LDCs for strengthening their infrastructural facilities in areas of roads, ports, power and telecommunications. Such infrastructural facilities are important for improving economic efficiencies of the LDCs and, thus, for expanding their capacities for increased trade. In this connection, the finance adviser rightly drove home the point that donors' money should be channelised, in support of such efforts by the less developed countries, as additional resources, not as reallocation from existing funds provided by the multilateral lenders. The pledge that was made by the major donors at the WTO Hong Kong Ministerial Conference in December, 2005, for providing $15 billion in additional assistance to the poor countries to help augment trade capacities of the less developed economies, has not yet been fulfilled.
Aid for Trade -- an initiative launched at the WTO Hong Kong Ministerial -- was clearly purported to enabling the LDCs to strengthen their capacities through outward market-oriented reforms in order to participate in a win-win, inclusive process of globalisation. This initiative should move forward to the operational level so that the Doha Development Round can make sense for the LDCs in terms of deriving some meaningful equitable benefits from globalisation. However, the importance of this 'Aid for Trade' initiative should not be considered in terms of mere funding support for strengthening and upgrading the capacity of, and the infrastructural support facilities in, the LDCs.
For the LDCs, trade and development issues are largely inter-related. This is more so in today's world where trade is considered the engine of growth. Therefore, such inter-related issues should be addressed in an integrated manner -- and not on a piecemeal basis. The Bangladesh side has rightly underlined the need for mapping out an appropriate 'aid for trade' strategy at the conference in Manila. This has to be done, keeping in view the diversity in economic structures of the less developed countries in this region and outside. If the strategy thereof is to deliver outcomes that are needed to help spur growth of the LDC and alleviate their poverty, then issues relating to trade and development should, indeed, be addressed through a set of comprehensible policy actions. The sooner, the better.
In this backdrop, Finance Adviser Mirza Azizul Islam who led the Bangladesh delegation to the afore-mentioned Manila conference on aid for trade that was co-hosted by the Asian Development Bank (ADB), the WTO and the Philippine government, urged the major donors to extend "focused" aid to the less developed countries for enabling the latter "to prepare the groundwork for increased trade and derive the benefits of globalisation". Aid should, thus, be focused on supporting effective efforts of the LDCs for strengthening their infrastructural facilities in areas of roads, ports, power and telecommunications. Such infrastructural facilities are important for improving economic efficiencies of the LDCs and, thus, for expanding their capacities for increased trade. In this connection, the finance adviser rightly drove home the point that donors' money should be channelised, in support of such efforts by the less developed countries, as additional resources, not as reallocation from existing funds provided by the multilateral lenders. The pledge that was made by the major donors at the WTO Hong Kong Ministerial Conference in December, 2005, for providing $15 billion in additional assistance to the poor countries to help augment trade capacities of the less developed economies, has not yet been fulfilled.
Aid for Trade -- an initiative launched at the WTO Hong Kong Ministerial -- was clearly purported to enabling the LDCs to strengthen their capacities through outward market-oriented reforms in order to participate in a win-win, inclusive process of globalisation. This initiative should move forward to the operational level so that the Doha Development Round can make sense for the LDCs in terms of deriving some meaningful equitable benefits from globalisation. However, the importance of this 'Aid for Trade' initiative should not be considered in terms of mere funding support for strengthening and upgrading the capacity of, and the infrastructural support facilities in, the LDCs.
For the LDCs, trade and development issues are largely inter-related. This is more so in today's world where trade is considered the engine of growth. Therefore, such inter-related issues should be addressed in an integrated manner -- and not on a piecemeal basis. The Bangladesh side has rightly underlined the need for mapping out an appropriate 'aid for trade' strategy at the conference in Manila. This has to be done, keeping in view the diversity in economic structures of the less developed countries in this region and outside. If the strategy thereof is to deliver outcomes that are needed to help spur growth of the LDC and alleviate their poverty, then issues relating to trade and development should, indeed, be addressed through a set of comprehensible policy actions. The sooner, the better.