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Aid for Trade: Promoting Trade Development and Poverty Reduction in Transition Economies

Chisinau, Mart 30, 2011

Europe and CIS

Jacek CukrowskiAfT Team Leader, UNDP, Europe and the CISBratislava Regional Centre

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Outline

Why Aid for Trade?

Key focus areas

Support to AfT initiative in transition economies

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Why Aid for Trade (AfT)?

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Trade can be an engine for growth that

lifts millions of people out of poverty

… but many developing countries face barriers that prevent them from benefiting from the world trading system

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Internal barriers – lack of knowledge,

excessive red tape, inadequate financing, poor infrastructure – can be very difficult for exporters to overcome

Targeting these “supply-side” constraints is what Aid for Trade is all about

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One objective....

Ensuring that developing countries can harness trade to raise living standard, improve health and education, protect the environment, alleviate poverty, and secure their development

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Key focus areas

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Trade policy and regulation

Building capacity to formulate trade policy participate in negotiations implement agreements

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Economic infrastructure

Investing in the infrastructure – roads, ports, telecommunications, energy networks – needed to link products to global markets

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Productive capacity building

Strengthening economic sectors – from improved testing laboratories to better supply chains – to increase competitiveness in export markets

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Adjustment assistance

Helping with any transition costs from liberalization preference erosion loss of fiscal revenue declining terms of trade

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AfT commitments reached USD 41.7 bn in 2008

2002-05 2006 2007 20080

5000

10000

15000

20000

25000

30000

35000

40000

45000

Trade-related AdjustmentBuilding Productive CapacityEconomic InfrastructureTrade Policy & Regulations

Source: OECD/CRS (millions of 2008 US$)4

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2008: + USD 5.3 bn

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AfT resource allocation Europe and CIS

Source: OECD

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Support to AfT initiative in transition economies

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AID FOR TRADE FOR CENTRAL ASIA, SOUTH CAUCASUS AND WESTERN CIS

Promoting Trade Development and Poverty Reductionin Partnership with Finland´s Wider Europe Initiative

Phase I: 2009-2011 (2.3 million USD)

Phase II: 2011-2013 (6.3 million USD)

Armenia, Azerbaijan, Belarus, Georgia, Moldova, Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan, Ukraine, Uzbekistan

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Wider Europe: Aid for Trade for Central Asia, South Caucasus and Western CIS

Phase I: Project components

Component I Aid for Trade Road Map in Central Asia: Identification of National

and Regional AfT Priorities Azerbaijan, Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan, Uzbekistan Aid for Trade Conference (Ministerial Meeting) for SPECA countries hosted by

the Government of Azerbaijan (December, 2010) http://www.unece.org/trade/SPECA-AfTBaku2010

Component II Aid for Trade for Central Asia: Support to Economic Development

along Trade Corridors Kazakhstan (Semey) Kyrgyzstan (Batken) Tajikistan (Khujand)

Component III Aid for Trade Needs Assessments in South Caucasus and Western

CIS Armenia, Georgia, Belarus, Ukraine, Moldova

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AfT Needs Assessments

http://europeandcis.undp.org/poverty/trade/show/8BD35D19-F203-1EE9-B08767E3833D66C6

Methodology presented in regional guide: How to Conduct Trade Needs Assessment

Focus: Impact of trade on human development, living standards and poverty reduction

Purpose: Highlight capacity gaps and propose actions and technical assistance projects to overcome weaknesses…

Recommendations: Action Matrix

Role of UNDP: methodological support, facilitation of the process

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Key issues

Focus on the link between trade and human development

analyze an impact of trade on living standards and poverty reduction

consumer prices, job creation, budget revenues environment, gender equality, health, knowledge and

education, etc.

Identify gaps and develop an action matrixactions recommended, desired outcomes and target

indicators, timeline for completion of actions, agencies involved, required resources

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Thank you…

United Nations Development Programme, Europe and the Commonwealth of Independent States,

Bratislava Regional Centre http://europeandcis.undp.org

Jacek.Cukrowski@undp.org

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