Massimiliano Riva Istanbul, 19 November 2008 Trade and Human Development How to conduct trade needs assessments in transition economies

How the guide should be used? A menu of options Further work needed PRESENTATION OUTLINE

How the guide should be used? Does the guide provide a predetermined format for conducting trade and HD needs assessments? Does the guide provide a regional outlook on trade in CIS and Eastern Europe? NO Does the guide identify country priorities and provide policy options? NO

How the guide should be used (continue)? Does the guide provide a framework for understanding the linkages between trade and HD? Does the guide provide tools for analyzing the linkages between trade and HD ? YES Does the guide provide hints and tools on how to design and conduct trade assessments ? YES

GUIDE CHAPTERS? Guide chapters 1. Introduction and overview 2. Trade Mainstreaming 3. Trade and Human Development 4. Aid For Trade 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

Macroeconomic and Business Environment A brief description of the macroeconomic environment to set the background for the analysis. It should include social macro variables, inequality, social expenditures, etc.. Tools described: Political Economic Social and Technological Business environment. The business environment section Should provide a picture of the country’s overall competitiveness and identify the main barriers and obstacles. Already existing survey should be used.

TRADE AND INVSTMENT POLICIES This chapter should review trade and investment policies and explain country specific dynamics… the main ain ingredients are Trade and investment statistics Institutional mapping Trade and investment policies Trade and agreements and accession to WTO

TRADE FACILITATION … traditionally defined as the simplification and harmonization of international trade procedures, including the activities… Poverty reduction and human development focus Reduce the “costs of exporting and importing goods” for small and micro entrepreneurs, farmers and associations of farmers… inclusive access to markets

SECTOR ASSESSMENTS Tools presented (more in the annexes): SWOT Value chain analysis Cluster analysis The analysis should identify linkages with human development by looking at new opportunities that will spring from increased trade Traditionally most direct linkages are related to employment opportunities and working conditions.

SECTOR ASSESSMENTS gender equity, wage inequality quality and “security” of generated jobs threats towards the environment and cultural resources productivity in FDI access to service, trade finance

Growing Inclusive Markets Initiative

TRADE POLICIES: AN IMPACT ASSESSMENT Human Development Impact Assessment (HDIA) Poverty and social impact assessment (PSIA) Strategic Environmental Assessments (SEA) Qualitative vs Quantitative methods for trade analysis Participatory poverty assessments Partial equilibrium models Computable General Equilibrium Gravity models Stakeholder Analysis

Human Development Impact Assessment (HDIA) Ten key questions grouped in four sections: (i)trade policy change and expected effects (ii) transmission channels and expected trade related outcomes (iii) implementation considerations and constraints (iv) post-assessment considerations.

Human Development Impact Assessment (HDIA) (1) Which trade policies are being analyzed? (2) What are the expected effects or changes? (3) Which groups are most likely to be affected and how? (4) How are the impacts likely to be channelled? (5) What will be the impact on the institutional, legal and regulatory environment? (6) Which institutions will affect the outcomes? (7) What are the measures of human development being assessed? (8) What are the data and knowledge constraints? (9) What will be the impact on policy space? (10) What monitoring and mitigation measures will be needed?

SUMMARY: some suggestions Prioritize on country needs Identify data constraints Identify different suitable methodologies and chose the most suitable for each context and research objective Assure a participatory approach from early design Be innovative at looking at sector analysis Read numbers with human development lens Think about follow up actions when preparing recommendations

The tools available to disclose the black box between trade, growth and poverty are still not sufficiently developed and should be expanded. FURTHER RESEARCH NEEDED The tools and strategies presented in the guide need to be tested on the ground and learn from a wider spectrum of experiences. There is a need to produce quality economic research form academia on the topic. There are few forerunners, but also a long tradition…

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