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A New Year’s Resolution: Closing the Gap on Trade Research

John Wilson's picture
 Photo: istockphoto.com

New Year’s resolutions are always of the lofty – but often short-lived kind.  I will go to the gym more often, lose more weight, or volunteer more often than I do now.  One resolution made by a number of  us in the Research Group of the Bank – and elsewhere, has been to find a way to get more people excited about investing in data collection and analysis on trade.  I recognize this is not the most glamorous of topics at any time of the year – but nonetheless a resolution as important as any made each year for decades as the calendar turns another page.

Here is why 2011 is different and resolutions made can be kept, however, and why data and research should be high on anyone’s development and trade agenda.
There were a number of high level dialogues in 2010 and 2011 related to global finance, trade, and development issues.  These included the High Level Summit on the MDG’s in September 2010 and the G20 Summit in Seoul in November 2010.  These events provided important opportunities -- in the post-crisis environment – to inform priorities going forward on aid effectiveness and trade.  The President of the Bank, Mr. Zoellick, outlined in October 2010 -- in a very high profile speech at Georgetown University – a new vision of development economics which included new ways of looking at and advancing research tied to make aid more effective and inclusive.

The UN LDC-IV process in 2011 presents a unique opportunity to build on this momentum gained last year to review priorities in the global aid for trade agenda as they relate to informing aid effectiveness and trade for the poorest of the world’s citizens.  The post-crisis world demands lower trade costs for development as well as more effective and targeted aid solutions informed by research.

The World Bank is committed to attaining a better understanding of the channels through which aid for trade affects the LDCs.  Bank research suggests, for example, that aid targeted at trade policy and regulation reform has an average return on investment that is nearly 20 times greater than returns on infrastructure and trade development investments.  Meanwhile, other research here shows that if investment were focused to improve the infrastructure quality of Chad, for example, halfway to the level of South Africa, trade levels in Chad would increase by 79% (a comparable increase in exports would require a reduction of 58% in import tariffs).

The need to make investments in data and analysis on aid effectiveness and trade can’t be ignored.  We’ve taken good steps in 2010 – let’s not let the momentum slip away into the dust bin of resolutions made and broken.  The World Bank’s Research Department co-organized, with the UN, an official LDC-IV pre-Conference event in Geneva on December 13th.   We discussed concrete actions for the Bank and other institutions to act to: 1) assist the LDCs in increasing trade-related aid effectiveness and, 2) provide innovative research and analytical tools specific to the unique challenges faced by LDCs today in expanding trade opportunities. 

The World Bank delegation at the LDC-IV pre-Conference event was led by Managing Director, Mahmoud Mohieldin, and consisted of  Ishac Diwan, Country Director (AFR) and me.  Other participants included: Pascal Lamy, Director-General of the World Trade Organization; Cheick Sidi Diarra, U.N. Under-Secretary General and High Representative for the LDCs; Patricia Francis, Director, International Trade Centre; Dorothy Tembo, Executive Director, Enhanced Integrated Framework; Paul Collier, Economist; William Egbe, President, Coca Cola South Africa; and several LDC Ambassadors to the UN and WTO.

Mr. Mohieldin issued a challenge to the development community to “come together in support of innovative and concrete research, data, and knowledge tools tailored to the LDCs.” 

Let’s make this a New Year’s resolution for 2011 we can all take credit for keeping when we meet in Istanbul for UN LDC-IV in May.

For more information on the Bank’s LDC-IV pre-Conference event and the proposed research partnership, please visit DECRG’s Trade Costs and Facilitation project web page and the recent story on the World Bank’s main page. 

 

Comments

Submitted by Tracy Hart on
John: I find this particular blog quite optimistic. I am a strong believer in trade-aid research leading to stronger support for the right development interventions, and as one means for bringing together macro and sectoral/micro dialogues. I am puzzled thus why the World Bank is strengthening its trade capacities and the IMF is weakening its capacities at the same time, by disbanding its trade department. I'd like to hear your comments on why has happened and how this might affect LDC dialogue on the macro and aid levels.

Tracy: Thanks for your comment. The Bank's work on trade, including in LDCs, has been driven, I think, by a number of factors. These include rising demand by countries for technical assistance, especially to lower trade costs and advance regulatory reform. There is also an increase in demand for trade related infrastructure, also related in many cases to trade facilitation goals. The data and research that underpins trade work at the Bank -- and elsewhere -- can help inform priorities and projects. This includes aid for trade funding going forward, and that is why the proposal for a new Partnership outlined in Geneva on December 13th is timely and relevant. Regarding IMF,colleagues from the fund can answer your question better. However, I do know that, in regard to the UN LDC IV Conference,the IMF has been engaged in discussions on preparations for this. John