Publication [ID: 119]

Aid for trade at a glance 2019: Economic Diversification and Empowerment

The latest edition of the report, jointly published by Platform members OECD and World Trade Organisation, highlights that over half of developing countries surveyed have made progress in diversifying their economies since the 2006 launch of the Aid for Trade Initiative. Diversification helps to economically empower marginalised groups.

The report titled „Aid for Trade at a Glance 2019: Economic Diversification and Empowerment“shares the findings of a survey of 88 developing countries. Most of the progress registered in 2019 was in the agricultural sector, followed by services and industry. The publication finds that every USD invested in aid for trade has generated USD 89 worth of exports in developing countries and nearly USD 20 of exports in Least Developed Countries (LDCs), depending on the country and the type of investment.

Turning trade opportunities into trade flows

Even though many developing countries still face supply side constraints, the report notes that open, rules-based trading contributes to global welfare by helping top diffuse goods, services, technology and knowledge. The authors emphasise that empowering small business, youth and women to participate in and benefit from trade is key for achieving the SDGs.

The 500 pagers report illustrates examples of how this support supports developing countries in improving their competitiveness, expand and diversify their trade, attract foreign direct investments, and create employment for men and women. Improvements in trade facilitation are a case in point. It highlights that support aligned around national priorities works best and contributes to an environment in which business can prosper, in particular the micro-, small and medium sized enterprises that are the backbone of most developing countries.

The report notes that the rate of progress is geographically uneven. LDCs, small island developing states (SIDS), landlocked developing countries and countries affected by conflict still face difficulties in using international commerce to diversify their economies. The authors call for paying greater attention to the social and economic impact of diversification through

  • Better incentive frameworks to attract more and better private investments;
  • Targeted social policies to support the reallocation of resources;
  • Government interventions addressing market, policy and institutional failures and
  • Policy reforms targeted at reducing trade costs, coupled with better access to infrastructure and health.

Links

Go back