Finance Minister welcomes World Bank initiative on Trade
November 22, 2007
St. John's, Antigua
Minister of Finance and the Economy Dr. Errol Cort welcomed the initiative announced by World Bank Group President Robert B. Zoellick, in his keynote address to Ministers, heads of regional development banks and key organizations, who are currently meeting in Geneva for the first global review of the World Trade Organization's “Aid for Trade” initiative.
In his address, Zoellick said that the Bank will assist countries in expanding efforts on trade so as to enable them to take advantage of the global market to accelerate economic growth and overcome poverty.
"This announcement could not have come at a better time," said Minister Cort. "Right now, momentum is building on the aid for trade agenda, and international attention is being paid to the notion that developing countries need to develop their trade infrastructure, institutions and policies if there are to be successfully integrated into world markets," he said.
Zoellick told the high-level gathering that development assistance should be made available to countries undertaking reforms to lower their costs of trading and use exports for growth, and that the World Bank Group will be increasing its development support to trade activities. He announced several areas for additional trade-related efforts by the World Bank Group (WBG). These areas include:
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Increased support to country programs on trade and competitiveness, including policy analysis, lending and technical assistance;
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More resources for trade-related infrastructure;
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Expanded programs for financing trade through the Bank's private sector arm, the International Finance Corporation (IFC);
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Expanded assistance in trade facilitation, including logistics, transport and supply chains;
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More investments in training and capacity building for policy-makers, particularly in low-income countries;
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Greater work on tools to help countries analyze trade obstacles, as well as indicators comparing countries, such as the recently released Logistics Performance Indicators, to guide policy makers to areas in need of improvement. These tools will be made freely available to all countries; and
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Further development of knowledge on how to harness globalization for growth and overcoming poverty, and to inform key trade policy debates.
Zoellick said the exact amount of the increase in trade-related activities provided by the WBG will depend on country demand, and on whether countries make trade a priority part of their development strategy. Moreover, he indicated that a successful replenishment by donor countries of the International Development Association (IDA), which is the part of the WBG that provides interest-free loans and grants to the poorest nations, will also determine how much additional resources will be available for aid for trade.
Developing countries received as much as US$21 billion a year in aid for trade over 2002-2005, according to the definition now used in WTO/Organization for Economic Cooperation and Development (OECD) estimates. These estimates include all investments in transport, energy, and telecommunications infrastructure. The Bank is working with the WTO and OECD to refine the measurement of aid for trade.
About US$3.1 billion of this amount is provided by the International Development Association (IDA), the arm of the World Bank Group that provides grants and zero-interest loans to the world's poorest countries. However, the Bank's ability to help “depends crucially” on further replenishing IDA's financial resources. To this end, the World Bank Group expects to contribute some US$3.5 billion of its own resources to IDA, and has also asked the developed country donors to increase their contributions.
The Geneva conference is intended to take stock of what has been happening on the aid for trade front around the world and identify how additional aid can help low-income countries build their capacity to integrate into and benefit from global markets.
