Assessing Aid for Trade in the Arab Region

William HynesOECD/DCD

12 December 2013

A BROAD AGENDA

Trade development

Trade policy & regulations

Trade- relatedinfrastructure

Building productivecapacity

Transport & Storage

Communications

Energy

Banking & Financial Services

Business & Other Services

Agriculture, Forestry & Fishing

Industry & Mining

Tourism

Othertrade-relatedneeds

Trade-related adjustment

ASSESSING AID FOR TRADE

Diverse Range of ProjectsDiverse Range of Projects

• Morocco: National Program for Rural transport infrastructure (problems due to unforeseen costs and institutional coordination). Export consortium in textiles developed with UNIDO increased exports by 22% from 2005 to 2008

• Tunisia: Customs and Logistics components of the export development program helped reduce cargo delays from 10 days in 2003-04 to 3.3 days in 2010

Diverse Aid for TradeDiverse Aid for Trade

• Jordan: IPR regulations in 2001 fostered expansion of a fledgling generic drug industry. By 2010 16 pharmaceutical countries had sales of USD 500 million in 60 countries

• Yemen: Export Strategy launched in 2010 but difficult to execute in light of the security situation and limited funding

• UNESCWA: Training for investment treaties and analysing FDI

AfT PRIORITIES: PARTNER COUNTRIES

AID FOR TRADE COMMITMENTS

AID FOR TRADE COMMITMENTS

AID FOR TRADE COMMITMENTS

Aid for Trade: ESCWA Members2006 to 2011, commitments

Aid for Trade to ESCWA Members, by donorcommitments

Aid for Trade: ESCWA Memberscommitments

Aid for Trade: ESCWA Members, 2011commitments

ASSESSING AID FOR TRADE

• Case stories and Self Assessment Questionnaires

• Empirical studies indicate aid for trade is broadly correlated with reductions in trade costs and trade expansion

• But evaluation practices need to be improved

• Impact Assessment

• Management for Trade and Development Results

EFFECTIVE AfT: PARTNER VIEWS

DONOR EVALUATIONS

• Most evaluations have concluded that the direct effects on export (growth) volumes are rather difficult to substantiate

• Improved understanding of the potential contribution trade can make to development, increased awareness and knowledge of trade policy issues (including WTO-related), and strengthened national dialogue (OECD, 2006)

• An OECD Meta evaluation of 162 AfT projects: “Trade impacts not considered,… rather mention of poverty reduction, gender…” (OECD, 2010)

ECONOMETRIC ANALYSIS

• Aid for Trade lowers trade costs and improves trade performance

• USD 1 in aid for trade increases exports from the poorest countries by USD 20 and USD 8 for richer developing countries. Findings are even higher for exports of parts and components.

• In well managed countries (proxied by “government effectiveness” indicator), aid for trade had strong impacts on exports…in poorly managed countries, the impacts were nil.

RESULTS-BASED MANAGEMENT

1.Identifying measurable objectives (results)

2.Selecting performance indicators

3.Setting targets for each indicator

4.Monitoring results

5.Reviewing and reporting results

6.Integrating evaluation to provide complementary performance information

7.Using performance information for accountability, learning and decision-making

Strategic planning

Performance measurement

Results-based management

CONCLUSIONS

• Monitoring and Evaluation of aid for trade is improving – Arab countries are engaged

• Evidence suggests aid for trade can help

• But important that such work makes a contribution to learning (for partner countries)

• Arab countries are diverse – policy advice, support and knowledge sharing are required