How to build a sustainable framework for endogenous-led capacity development in the trade-related sector Phnom Penh, 5 February 2008 Fabio Artuso ( EC Delegation in Bangkok

Outline Overview on EU Trade Related Assistance Trade-Related Capacity Development (Doha, OECD/DAC, EC approach) The way forward

EU Trade Related Assistance Overview source: 2006 Joint WTO/OECD report on TRA

EU Trade Related Assistance “EU Aid for Trade Strategy”  “EU Strategy on Aid for Trade: Enhancing EU support for trade-related needs in developing countries” – published on 29/10/07  More, better and quicker aid for trade  Clear picture of how the EU intends to respond to the recommendations of the WTO 2006 Taskforce on AfT

EC Trade Related Assistance Disbursements OWNERSHIP is at the core of the new strategy: beneficiary countries must integrate trade- related needs into their development strategies and assistance requests

EC Trade Related Assistance The Paris Declaration Source: OECD/DAC

Trade-related Capacity Development The Doha Declaration Doha Declaration (2001): “We confirm that technical cooperation and capacity building are core elements of the development dimension of the multilateral trading system…” “We underscore the urgent necessity for the effective coordinated delivery of technical assistance with bilateral donors…”

Trade-related Capacity Development OECD/DAC Guidelines OECD/DAC “Guidelines on Strengthening Trade Capacity for Development” Trade Capacity Building enhances the ability of policymakers, enterprises and civil society in developing countries to: Collaborate in formulating and implementing a trade development strategy embedded in a broader national development strategy; Increase the volume and value-added of exports, diversify export products and markets and increase foreign investment to generate jobs and exports; Participate in – and benefit from – the institutions, negotiations and processes that shape national trade policy and the rules and practices of international commerce.

Trade-related Capacity Development OECD/DAC Guidelines The Guidelines suggest that donors and developing countries should seek to construct trade policy frameworks with the following elements: Coherent trade strategy  overall development strategy Effective mechanisms for consultation Effective mechanisms for intra-governmental policy co-ordination A strategy for the enhanced collection, dissemination, and analysis of trade-related information Trade policy networks Private sector linkages A commitment to outward-oriented regional and global strategies

Trade-related Capacity Development OECD/DAC Guidelines Suggestions to Donors: Co-ordinate more closely TCB activities are comprehensive in scope and integrated in execution Foster local ownership and participation Embrace approaches that strengthen the ability of partner countries to continue helping themselves once donors have left Strengthen donors' own trade-related capacities Commit significant financial and personnel resources

EC approach to Capacity Development - Consider organisations as “open systems” -

EC approach to Capacity Development - Focus on products and services - Look at the outputs of the organisation: products and services Capacity development must result in specific changes in output

EC approach to Capacity Development - Explore the context, the inputs – and then go inside - Before looking inside the organisation, explore structural and institutional drivers of and constraints to change in the context Look for stakeholders – they make and break change! Consider the Inputs and resources Then, finally, look at the rest of the “inside” elements

EC approach to Capacity Development - Dig deeper to get a solid diagnosis - Look for both formal and informal aspects of organisations Look for both the “functional-rational” dimension and the “political” dimensions of organisations

EC approach to Capacity Development - Change and CD are mostly domestic processes - External factors are often powerful drivers of capacity change – but committed insiders must lead A change strategy is required

EC approach to Capacity Development - Roles of and instruments for donors - Make sure that the partner can and will lead! Assist the partner to define realistic CD targets in terms of changes in organisational outputs Donors can play a catalytic role, engage to build up demand for change, provide access to knowledge, pilot different approaches, facilitate dialogue between domestic stakeholders

Trade-related Capacity Development The way forward TCD should build upon and foster the process for formulating and delivering trade policy What delivery mechanisms can be used to boost effectiveness of programmes supporting TCD?

The way forward How can we enhance TCD effectiveness? Need to improve donor- donor coordination donor- recipient coordination Fora for discussion and coordination Shared analysis / joint diagnostic reviews Use existing Government’s structures to channel TRA and provide support to strengthen them Use common arrangements and procedures: programmatic approaches to be supported through basket funding

The way forward Increase use of Sector Wide Approaches

They way forward SWAps and Basket Funding Arrangements Other Sector national budget revenues support ‘Pool Fund’ Donor X Donor Y Donor X Through Treasury Co-financed activities Projects Sector Programme Donor Z PPP Own funds

The way forward The role of UN agencies and IFIs Need to avoid duplication and competition Focus on areas where UN bodies have a respective comparative advantage UNCTAD XII: work on establishing a list of comparative advantages in TA provided among UN agencies [or establish a list of good practices or success stories for each organisation]

Thank you for your attention! Fabio Artuso