Preliminary Aid for Trade Evaluation Hints at Areas for Improvement

29 June 2011

Representatives from developed and developing countries, NGOs, and international organisations gathered last week to conduct a preparatory meeting in advance of next month's Third Global Review of Aid for Trade. While much of this 23 June workshop was devoted to the review of Aid for Trade case stories, there was also substantial discussion of areas needing improvement, such as monitoring and evaluation of on the ground results.

Last week's meeting, which was held within the context of the WTO's Committee on Trade and Development, featured 275 case stories from a range of sources. The results will feed into the upcoming Global Review on 18 and 19 July. Other factors under consideration will be data from the Organisation for Economic Co-operation and Development's (OECD) Creditor Reporting System, primarily on aid flows, along with self-assessment questionnaires from both donors and beneficiaries.

The Aid for Trade initiative began six years ago at the WTO Ministerial in Hong Kong, with the goal of providing financial and technical assistance to developing countries so that they can take a greater part in international trade.

The Global Review, which was previously held in 2007 and 2009, is the event where donors, recipient countries, international organisations, the private sector, and other actors gather to discuss the initiative's progress on the ground.

In 2009, resources allocated to the Aid for Trade initiative worldwide amounted to US$40 billion. According to OECD figures, this is a 60 percent increase from the 2002 to 2005 baseline period - though whether this growth is sustainable is one of the many issues on next month's Global Review agenda.

At a speech to the United Nations Conference on Trade and Development (UNCTAD) earlier this month, WTO Deputy Director General Harsha Singh praised Aid for Trade for "successfully plac[ing] the spotlight on trade as a centre-piece of development." This sentiment was echoed at the 23 June meeting, which was held within the context of the WTO's Committee on Trade and Development.

While the OECD in its presentation at the 23 June meeting stressed the initiative's success in increasing aid flows and country involvement, the organisation noted that recipient countries need to have more ownership in the process if donors and recipients wish to see more results.

Despite successes, challenges remain

The difficulties of monitoring and evaluating Aid for Trade's success at a country-by-country level were a recurring theme at last Thursday's meeting, with some attendees noting that the initiative is even harder to evaluate than more traditional types of foreign aid.

While the OECD figures show a substantial growth in resources allocated to Aid for Trade, and the initiative is being increasingly integrated into recipient countries' development strategies, its effectiveness on the ground - i.e. at the country level - remains largely unclear.

Critics cited the time lag in seeing results, along with the difficulties in attributing successes or failures to the programme, as some of the initiative's main problems. Despite having 275 case stories to review, attendees were in agreement that this collection only represents a snapshot of reality.

In an informal conversation with Bridges, a donor country delegate stressed the need for a shift from "anecdotal exercises" to a more "systematic approach" in evaluating the initiative's effectiveness, so that donors can "allocate resources better." Various donors and recipient countries reiterated this view at the meeting, calling for better monitoring mechanisms, training for conducting monitoring exercises, and the establishment of a concrete methodology for evaluations.

The need to align support with recipient countries' development strategies, along with the recognition of donor shortcomings, were both seen as essential toward improving Aid for Trade effectiveness. However, the OECD made clear that, while the donors are responsible for providing funds and expertise, implementation at the local level lies in the hands of recipient countries.

The United Nations Economic Commission for Europe (UNECE) also criticised the lack of Aid for Trade initiatives in Eastern Europe and Mediterranean countries. UNECE noted that, given that countries in this region tend to be in the middle income group, they often receive less attention from donors, who direct support more toward developing countries in Africa, Asia, and Central America. OECD figures find that the largest share of Aid for Trade resources goes to Asia, at 44 percent, followed by flows to Africa at 35 percent.

Meanwhile, China brought up the need to review not just Aid for Trade successes, but also the initiative's failures and the possible lessons that could be learned from the latter.

At the meeting, Canada also pointed towards the importance of "sequencing in [Aid for Trade] projects - from training to supply side development, to development of supportive national systems" for achieving more effective Aid for Trade programmes.

A Canadian delegate, speaking to Bridges after the event, asserted that the case stories show the "beginning stages of assessment of [Aid for Trade]" and that the Global Review should "ensure ongoing political-level focus on [Aid for Trade], coupled with a discussion on the best possible ways to monitor and evaluate its impact."

Despite these problems, attendees found that the Aid for Trade initiative has seen improvements since the last Global Review. Efforts to integrate the feedback from 2009 have resulted in better alignment with recipient country development strategies, increased recipient country ownership, improved predictability of funds, strengthened recipient country institutions, and increased private sector involvement.

ICTSD reporting.

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