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Donors, recipients look at effectiveness of ‘aid for trade’

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Wednesday, 10 July 2013

Donors, recipients look at effectiveness of ‘aid for trade’

It is unclear whether ‘aid for trade’ (AfT) projects and programmes indeed impact on poverty, a recent study shows. It comes on the heels of a fourth Global Review of Aid for Trade – an event organized by the World Trade Organisation (WTO) to offer an opportunity to donors and to developing countries to look how Aft is helping people to trade - in Geneva on 8 July.
The report - commissioned by Traidcraft, a UK-based NGO fighting poverty through trade, and CAFOD, the official overseas development and relief agency of the Catholic Church in England and Wales - says that poverty reduction is only measured at macro-level and in the long-term perspective. In contrast, the impact of concrete projects on poor and excluded groups is typically not assessed.
The study is also critical of the EU decision making process, with too many players involved. It notes that the EU process of evaluation of projects, which is highly centralised, leaves little room for reflection on local circumstances and for the flexibility in project design.
However, according to the same research, the share of AfT of overall Official Development Assistance (ODA) did globally increased from 26% in 2006-2007 to 35% in 2010. AfT to sub-Saharan Africa has increased the most, compared to other regions, by almost 40%.
In the same time, this year's joint report ‘‘Aid for Trade at a Glance: Connecting to Value Chains’ - from the WTO and the Organisation for Economic Cooperation and Development, or OECD – shows that for every euro invested in Aid for trade produces between 8 and 20 euros in additional exports from developing countries, the EU commissioner for development aid, Andris Piebalgs – also present at the 8th July event in Geneve – said.

The Aid for trade (AfT) initiative, launched at the WTO Ministerial Conference in 2005, is assistance to support developing countries' efforts to expand their trade as a tool to help growth and reduce poverty. A total of $200 billion (€155 billion) have been mobilised since the inception of AfT in 2005, it is estimated.

Within the AfT initiative, in 2011, the share of EU and its member country contribution in the global Trade Facilitation accounted for 59% of the total effort.

Source: EurActiv