1 Jacek Cukrowski Economic Development and Poverty Reduction Advisor, UNDP, Europe and the CIS Bratislava Regional Centre Aid for Trade (AfT) Needs Assessment Third Meeting of Trade Ministers of Landlocked Developing Countries Ezulwini, Swaziland, October 2009

2 Outline Objectives of AfT Needs Assessments Objectives of AfT Needs Assessments Main focus and message Main focus and message The Guide The Guide Proposed structure Proposed structure Current work on Aft Needs Assessments in Europe and the CIS Current work on Aft Needs Assessments in Europe and the CIS

3 Objectives Why Trade Needs Assessments? Identify and overcome existing barriers to trade Identify and overcome existing barriers to trade Identify the cost of adjusting to current or anticipated trade agreements / trade shocks Identify the cost of adjusting to current or anticipated trade agreements / trade shocks Assess the impact of trade on poverty and human development Assess the impact of trade on poverty and human development Tackle institutional and infrastructure capacity limitations Tackle institutional and infrastructure capacity limitations Suggest action plans to remove bottlenecks and seize opportunities for the poor Suggest action plans to remove bottlenecks and seize opportunities for the poor Identify a set of policy recommendations and technical assistance needs aimed at improving the contribution of trade to human development

4 What Trade Needs Assessments should? Review of current trade and investment policies and agreements, the business environment and investment climate Review of current trade and investment policies and agreements, the business environment and investment climate Review country competitiveness and export performance Review country competitiveness and export performance Analyse the ways to promote key sectors of the economy Analyse the ways to promote key sectors of the economy Assess the impact of trade on poverty, inequality, and social exclusion Assess the impact of trade on poverty, inequality, and social exclusion Identify opportunities to use trade for human development Identify opportunities to use trade for human development

5 Main focus Impact of trade on human development Trade can be a powerful source of economic growth Trade can be a powerful source of economic growth … but while broadly based economic growth is necessary for human development, it is not enough … but while broadly based economic growth is necessary for human development, it is not enough Human development also requires enlarging people s choices and opportunities especially poor people s Human development also requires enlarging people s choices and opportunities especially poor people s liberalizing trade does not ensure poverty reduction or human development, nor does it guarantee immediate economic growth liberalizing trade does not ensure poverty reduction or human development, nor does it guarantee immediate economic growth The nature of resource allocation and social inclusion are important determinants of growth leading to poverty reduction and human development The nature of resource allocation and social inclusion are important determinants of growth leading to poverty reduction and human development for women and those participating in the informal sector, especially for women and those participating in the informal sector, especially

6 It improves economic base It improves economic base It broadens a range of human choice It broadens a range of human choice … but there could be some short-term human development risks that needs to be well understood and countries need to be prepared to minimize possible negative impact of trade on selected social groups Opening trade is key for human development Main messages Opening trade is key for human development

7 Main messages Trade should be integrated into national development policy (development strategies) National ownership is critical National ownership is critical Opportunities to use trade to reduce poverty and promote human development should be identified Opportunities to use trade to reduce poverty and promote human development should be identified Human development risks related to trade shocks needs to be understood Human development risks related to trade shocks needs to be understood Suitable institutions need to be developed to ensure multi-stakeholder participation in trade policy design Suitable institutions need to be developed to ensure multi-stakeholder participation in trade policy design

8 Trade and national development strategies If trade is to serve as an engine of economic growth countries must develop a multidimensional strategy for trade expansion If trade is to serve as an engine of economic growth countries must develop a multidimensional strategy for trade expansion Framed in an appropriate macroeconomic environment Framed in an appropriate macroeconomic environment Structural and social concerns should be treated equally with macroeconomic and financial concerns Structural and social concerns should be treated equally with macroeconomic and financial concerns Trade reforms should be an integral part of comprehensive development frameworks Trade reforms should be an integral part of comprehensive development frameworks

9 The Guide How to Conduct AfT Needs Assessments Regional guide Global guide trade-AFT%20web.pdf

10 Contents of the Guide 1.Introduction 2. Trade Mainstreaming 3. Trade and Human Development 4. AfT Needs Assessment: Structure and Process 5. Macroeconomic And Business Environment 6. Trade and Investment Policies 7. Trade Facilitation and Standards 8. Sectoral Analysis 9. Trade Policies: An Impact Assessment 10. Final Remarks, Action Matrix and Launching the Study

11 Proposed structure of AfT Needs Assessments (I) Introduction …. short country background, key analytical questions… (II) Macroeconomic and business environment … macroeconomic background (related to poverty, human development, trade and competitiveness) (III) Trade and investment policy … policies and trade and investment dynamics, institutions, trade agreements and market access (WTO accession; trade negotiation strategy…) (IV) Trade facilitation … customs procedures, transportation costs, red tapes and other behind-the-border barriers to trade… underlying causes of inefficiency (V) Sectoral analysis … sectors where trade has the biggest an impact on poverty reduction and human development (VI) Trade policy impact assessment (optional) … impact of trade policy options on poor (VII) Conclusions and action matrix … Recommendations in the form of an Action Matrix. Highlight capacity gaps and propose actions and technical assistance projects to overcome weaknesses….

12 Action Matrix Action recommended Action recommended Desired outcome and target indicator Desired outcome and target indicator Timeline for completion of action Timeline for completion of action Agencies involved Agencies involved Required resources Required resources Required donor support Required donor support Important issues: Action priorities Matching with trade related technical assistance

13 Current work on AfT Needs Assessments in Europe and the CIS UNDP regional project: Wider Europe: AfT for Central Asia, South Caucasus and Western CIS ( ) UNDP regional project: Wider Europe: AfT for Central Asia, South Caucasus and Western CIS ( ) Project financed by the Government of Finland Project financed by the Government of Finland Component I: AfT in Central Asia: Identification of National and Regional Priorities Component I: AfT in Central Asia: Identification of National and Regional Priorities Azerbaijan, Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan – initiated (Uzbekistan – planned) Azerbaijan, Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan – initiated (Uzbekistan – planned) AfT Road for SPECA Countries (Ministerial Conference planned for 2010) AfT Road for SPECA Countries (Ministerial Conference planned for 2010) Component III: AfT Needs Assessments in South Caucasus and Western CIS (planned for 2010) Component III: AfT Needs Assessments in South Caucasus and Western CIS (planned for 2010) Armenia, Belarus, Georgia, Moldova, Ukraine Armenia, Belarus, Georgia, Moldova, Ukraine

14 Thank you… UNDP Europe and the CIS Bratislava Regional Centre UNDP Europe and the CIS Bratislava Regional Centre UNDP Geneva Trade and Human Development Unit UNDP Geneva Trade and Human Development Unit