GENEVA – 3 JULY 2019 – The world’s 47 least developed countries (LDCs) are home to more than one billion people. Yet, their collective share of global trade is less than one percent. At a special event during the Aid for Trade Global Review 2019, six countries announced plans to commit nearly US$13 million to help better the trade situation and work to reduce poverty in LDCs.
Faster growth is essential to reducing poverty, but the latest forecasts from the International Monetary Fund and the World Trade Organization (WTO) see slowing global growth as well as shrinking trade. The new investments in LDCs will work to spur trade and help to alleviate any impacts during the current global uncertainty.
The governments of Australia, Denmark, Finland, Germany, Japan and Sweden announced the plans for commitments to the Enhanced Integrated Framework (EIF) during the biennial aid for trade event in Geneva. EIF works to improve trade in partnership with LDC governments, development institutions and NGOs, as well as the WTO’s Aid for Trade Initiative. The Aid for Trade Initiative aims to mobilize resources to build trade capacity and infrastructure in developing countries and in LDCs. EIF works directly with LDC governments to do so.
“Participation in global trade is important for development. However, there are a number of barriers and obstacles that need to be overcome for LDCs to participate meaningfully and equitably in international trade. These relate to both product quality, norms, standards, level of competitiveness, institutional capacity, market access and appropriate strategies and policies. Sweden is proud to be one of the donors contributing to the efforts of EIF in assisting LDCs in promoting trade as an engine for development, growth and poverty eradication,” said Cecilia Scharp, Assistant Director-General and Director of the Department for International Organizations and Policy Support at the Swedish International Development Agency (Sida), ahead of the event. Sida announced a contribution to EIF of 50 million SEK (US$5.4 million), bringing the total amount of Swedish support to 150 million SEK for 2017-2022.
The new planned commitments to EIF – a significant show of support for trade as a development solution – will work to directly address LDC trade constraints through a holistic approach that is a mix of evidence-based research, sectoral strategies aimed at economic diversification and government coordination that results in work directly on the ground.
LDCs are particularly vulnerable to outside shocks like commodity price volatility, while in most LDCs per capita GDP growth is significantly below the rates needed to eradicate extreme poverty. Amid current trade tensions, it is more important than ever that the world’s poorest countries are supported with the trade tools they need to succeed.
“Aid for trade to The Gambia has seen results, and is helping the diversification of our agriculture exports to new international markets for our goods. The Gambia is pleased to be an EIF partner in this effort, and to see donor countries recognizing both what has worked for LDCs and where there is more work to be done – knowing that success, that is, people getting out of poverty, is crucial," said The Gambia Vice President Isatou Touray, who attended the Geneva event.
EIF works from Africa and the Americas to Asia and the Pacific, having helped 41 countries integrate trade into their national development plans while supporting over 1,300 micro- small- and medium-sized enterprises and over 35,000 women. EIF’s unique partnership is designed to have the most impact, and also works as a catalyst for further funding to LDCs, ensuring support extends far and wide.
"These planned commitments from our donors will do so much to help LDCs as they work within a challenging and shifting global trade environment. For 10 years, EIF has been working with LDC governments, and we have seen success from Chad to Bhutan to the Solomon Islands. But more effort is needed, and we hope others will join us in putting LDCs in the drivers' seat of inclusive development," said EIF Executive Director Ratnakar Adhikari.