A I D F O R T R A D E A T AIDFORTRADE A G L A N C AT A GLANCE 2019 E 2 0 1 9 : E C ECONOMIC DIVERSIFICATION O N O M AND EMPOWERMENT IC D IV E R S IF IC A T IO N A N D E M P O W E R M E N T AIDFORTRADE AT A GLANCE 2019 ECONOMIC DIVERSIFICATION AND EMPOWERMENT 1 This work is published under the responsibility of the Secretary-General of the OECD. The opinions expressed and arguments employed herein do not necessarily reflect the official views of OECD member countries. This document, as well as any data and any map included herein, are without prejudice to the status of or sovereignty over any territory, to the delimitation of international frontiers and boundaries and to the name of any territory, city or area. Please cite this publication as: OECD/WTO (2019), Aid for Trade at a Glance 2019: Economic Diversification and Empowerment, OECD Publishing, Paris, https://doi.org/10.1787/18ea27d8-en. ISBN 978-92-64-40293-5 (print) ISBN 978-92-64-42951-2 (pdf) Aid for Trade at a Glance ISSN 2223-4403 (print) ISSN 2223-4411 (online) Revised version, September 2019 Details of revisions available at: http://www.oecd.org/about/publishing/Corrigendum_Aid_for_Trade_2019.pdf The statistical data for Israel are supplied by and under the responsibility of the relevant Israeli authorities. The use of such data by the OECD is without prejudice to the status of the Golan Heights, East Jerusalem and Israeli settlements in the West Bank under the terms of international law. Corrigenda to OECD publications may be found on line at: www.oecd.org/about/publishing/corrigenda.htm. © OECD and WTO 2019 You can copy, download or print OECD content for your own use, and you can include excerpts from OECD publications, databases and multimedia products in your own documents, presentations, blogs, websites and teaching materials, provided that suitable acknowledgement of OECD as source and copyright owner is given. All requests for public or commercial use and translation rights should be submitted to [email protected]. Requests for permission to photocopy portions of this material for public or commercial use shall be addressed directly to the Copyright Clearance Center (CCC) at [email protected] or the Centre français d’exploitation du droit de copie (CFC) at [email protected]. FOREWORD Economic diversification and empowerment are essential for achieving the Sustainable Development Goals. Both objectives also embody the rationale behind the Aid for Trade Initiative. Economic diversification offers a pathway for empowerment, while empowement allows women, youth and micro, small and medium sized enterprises to engage in trade. Growth in agriculture, manufacture and services offers entrepreneurial opportunities and generates productive jobs. In turn, this economic diversification contributes to rising incomes and human development more generally. We have seen this pattern of progress in many developing countries bringing substantive reductions in extreme poverty. However, the pace of economic diversification is uneven and the pattern evolving, while some economies face inherent challenges. This is especially true for small, island, landlocked or resource dependent countries and those that are affected by fragility and conflict. At the same time, rapid technological progress threatens to disrupt established pathways for economic development, but also offers new growth and development opportunities. Elevated environmental risks require new approaches to economic diversification. International trade can help. An open, rules based trading system contributes to global welfare. It helps diffuse goods and services, and also the technology and knowledge to manage environmental challenges. But turning trade opportunities into trade flows, requires us to redouble our efforts to tackle the numerous supply side constraints that many developing countries are still facing, particularly the least-developed countries. Much is already happening. Since the Aid for Trade Initative started in 2006, USD 409 billion in official development assistance and USD 346 billion in low concessional loans has been disbursed to help developing countries build their trade capacities. Almost another USD 100 billion in both flows combined is committed in 2017. In addition, South-South providers contributed USD 9 billion and foundation USD 100 million. The At a Glance report illustrates many examples of how this support helps developing countries improve their competitiveness, expand and diversify their trade, attract foreign direct investment, 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 economies. This report also highlights the scale of the challenge still ahead. We need to learn from these examples to reinforce the coherence between aid and trade that is required to address the challenges and opportunities of economic diversification and empowerment. Most of all we need to consider that the economic empowerment of youth and women is not the outcome of the process of economic diversification, but frequently the starting point. Angel Gurría Roberto Azevêdo Secretary-General, Director-General, OECD WTO AID FOR TRADE AT A GLANCE 2019: ECONOMIC DIVERSIFICATION AND EMPOWERMENT - © OECD, WTO 2019 3 AID FOR TRADE FACTS AND FIGURES AID FOR TRADE FACTS AND FIGURES FINANCING FLOWS Aid for Trade disbursements 45 US$ 410 billion disbursed from 2006 to 2017 40 US$ 154.9 billion to Asia st 35 c 7 1 US$ 146.2 billion to Africa 0 2 n, 30 o billi S$ 25 US$ 12.2 per capita in least-developed U countries (LDCs) in 2017 20 US$ 4.7 per capita in non-LDCs in 2017 15 Source: OECD Creditor Reporting 200620072008200920102011201220132014201520162017 System Database PROJECTS AND PROGRAMMES Aid for Trade projects since 2006 A total of 178,141 Aid for Trade projects have been funded since 2006. The median project size is US$ 98,400. The average project size is US$ 2.25 million. Number of projects per region Aid for Trade disbursements, by type 100% 3,325 Oceania 80% 12,649 42% 48% 58% 60% 59% Europe 63% 60% 62,030 Africa 51,731 40% Asia 58% 52% 20% 42% 40% 41% 37% 34,675 0% America 2006-08 avg.2009-11 avg.2012-14 avg. G2r0a1n5ts 2016Loans2017 Source: OECD Creditor Reporting System Database 4 AID FOR TRADE AT A GLANCE 2019: ECONOMIC DIVERSIFICATION AND EMPOWERMENT - © OECD, WTO 2019 AID FOR TRADE FACTS AND FIGURES TRADE OUTCOMES Export diversification Agriculture Industry 284 1128 2000 2017 2000 2017 es es ori 225 ori 859 eg 188 eg cat 174 175 181 cat 652 687 ct ct 558 u u 507 d d pro 92 pro ort 54 ort 227 p p 134 x x E E Africa America Asia Oceania Africa America Asia Oceania SSoouurrccee:: WWTTOO DDaattaabbaassee Progress in economic and export diversification is not uniform nor universal. According to the OECD-WTO Monitoring and Evaluation Exercise 2019, 53 per cent of developing countries reported progress in economic diversification since the launch of the Aid for Trade initiative in 2006 – 66 per cent for LDCs. Services is the sector with the second-most progress after agriculture, as reported by 33 per cent of developing countries. Sectors where respondents reported most progress Agriculture Industry Services 61% 45% 39% 42% 41% 32% 33% 34% 32% 33% 17% 21% Developing countries LDCs Landlocked developing Small island countries (LLDCs) developing states Source: OECD-WTO Monitoring and Evaluation Exercise 2019 IMPACTS Ninety per cent of developing country respondents recognized economic empowerment as a priority in their national or regional development strategy – 95 per cent for LDCs and landlocked developing countries (LLDCs). GDP per capita, PPP Human Development Index (constant 2011 international $) 0.8 0.6 20000 0.4 10000 0.2 0 0 Developing LDCs Developing LDCs 2006 2017 2006 2017 Source: World Bank – World Development Indicators, United Nations Development Programme - International Human Development Indicators AID FOR TRADE AT A GLANCE 2019: ECONOMIC DIVERSIFICATION AND EMPOWERMENT - © OECD, WTO 2019 5 ACKNOWLEDGEMENTS Aid for Trade at a Glance: Economic Diversification and Empowerment was prepared under the aegis of the OECD Development Assistance Committee and Trade Committee together with the WTO Committee on Trade and Development. The OECD and WTO Secretariats would like to express their appreciation to all the governments, intergovernmental organisations, nongovernmental organisations that participated in the 2019 aid-for-trade monitoring and evaluation exercise. The report has been prepared under the overall guidance of Frans Lammersen (OECD) and Michael Roberts (WTO). Managerial support was provided by Jorge Moreira da Silva, Ken Ash (OECD) and Shishir Priyadarshi (WTO). Chapter 1 was written by Justine Lan, Michael Roberts and Dayong Yu (WTO); Chapter 2 by Frans Lammersen (OECD); Chapter 3 by Nobuya Haraguchi (UNIDO); Chapter 4 by Luisa Bernal (UNDP) and Daria Shatskova (EIF); Chapter 5 by Paul Brenton, Ian Gillson and Pierre Sauvé (WBG); Chapter 6 by William John Gain, Brian O’Shea and Heidi Stensland (WBG), Evdokia Moïsé (OECD) and Pamela Ugaz (UNCTAD); Chapter 7 by Miho Shirotori and Cecilia Heuser (UNCTAD); Chapter 8 by Sarah Mohan and Valentina Rollo (ITC); and Chapter 9 by Kaori Miyamoto and Marianne Musumeci (OECD). The country profiles were prepared by Rainer Lanz (WTO) The aid-for-trade monitoring and evaluation exercise was conducted by Théo Mbise and Justine Lan. Statistical support was provided by Aussama Bejraoui (OECD). The report was designed by Peggy King Cointepas. The team was assisted by Najat Lachal (OECD). In addition, the following persons are acknowledged: Néstor Pelechà Aigües, Mark Baldock, Juan Casado Asensio, Freerk Boedeltje, Stacey Bradbury, Ana Fernandes, Tomas Hos, James Kim, Anne-Lise Prigent, Jan-Anno Schuur, Annelise Thim, Thierry Vebr (all OECD); David Cordobés, Eleonora de Falcis, Jennifer Freedman, Marion Jansen, Evelyn Seltier, Jasmeer Virdee, Matthew Wilson (all ITC), Ratnakar Adhikari (EIF); Riad Meddeb (UNDP), Pamela Coke-Hamilton, Poul Hansen, Jan Hoffmann, Brook Kidane, Samuel Munyaneza, Alessandro Nicita, Bonapas Onguglo, Ralf Peters, Mesut Saygili (all UNCTAD) Barbara Marcetich (WTO) Generous financial support for this work from the government of the Netherlands and from the government of Sweden for analysis underpinning Chapter 9 is gratefully acknowledged. n AID FOR TRADE AT A GLANCE 2019: ECONOMIC DIVERSIFICATION AND EMPOWERMENT - © OECD, WTO 2019 7