Wider Europe project: Aid for trade in Central Asia, South Caucasus, and Western CIS
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Sheila Marnie, Economist, Ashgabat, 12th November
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Wider Europe project: Aid for trade in Central Asia, South Caucasus, and Western CIS
- 2. • Supporting the link between human development and trade • UNDP’s focus: – To help developing countries build capacity to compete internationally by overcoming supply side constraints; – To help developing countries build capacity to negotiate, interpret and implement trade agreements (multilateral, regional and bilateral) in a manner that prioritizes poverty reduction and human development; and – To help developing countries incorporate pro-poor, development-centered trade policies into national development strategies, including poverty reduction programmes.
- 4. • Trade is a tool and does not automatically guarantee sustainable economic growth, poverty reduction and overall human development. Four essential consideration for HD considerations in trade: • Productivity: related to the improvement of human capabilities; • Equality: progressive access to opportunities for all members of society; • Sustainability: resource usage that does not compromise the welfare of future generations; • Empowerment: people’s capability to shape processes and events that affect their lives.
- 5. • Trade and private sector as a leverage and necessity for human development; • Interventions adapted to country/sub-regional context; • Intra-regional cooperation and partnership between project units;
- 7. CA coverage
- 8. Aid for Trade Needs Assessments under phase I Development of Aid for Trade Needs Assessments in 11 countries in Central Asia, South Caucasus and Western CIS: Objectives: • Identification of capacity gaps (institutional, human, etc.) and technical assistance needs; • Development of policy recommendations and action matrix for potential donor assistance; • Development of concrete project proposals for AfT interventions.
- 9. On the basis of the Aid for Trade Needs Assessments undertaken in SPECA countries the following areas were considered as critical by member states and adopted as focus areas in the Ministerial Declaration: – Supply side/within-border measures; – Cross-border cooperation; – The multilateral trading system . Cross- border cooperation: • Physical infrastructure; • Institutional trade infrastructure, with a focus on trade facilitation; • Market access.
- 11. Some examples from the project: Access to information is vital AIMS in Sughd (Tajikistan) – Web-portal www.agroinform.tj – Newspaper – Electronic boards – SMS system Since the inception of the portal on 1.07.2010 more than 45 813 individuals have visited it … a similar system was also established in Batken (Kyrgyzstan)
- 12. Some examples from the project: Environmental protection & business sense No artificial heating (clay) Cost of one: 17 000US$ (10K – loan and 7K contribution from farmer) Cost recovery: one year (2 season January-May 2011 and December 2011-March 2012 - 9 months) Drip irrigation Organic fertilizer (i.e. cow dung) Tonnage (collected: 7000kg tomatoes January - May 2011) Protecting the environment = PROFIT
- 13. Some examples from the project: Natural fertilizer in cotton production Bigger yields: Traditional cotton - 2.17 ton/ha ‘Organic cotton’ - 2.50 ton/ha Cost price: Traditional cotton – 907 US$/ha ‘Organic cotton’ - 904 US$/ha Profit: Traditional cotton – 314 US$/ha ‘Organic cotton’ - 891 US$/ha Protecting the environment = PROFIT
- 14. Some examples from the project: Improved services along the transport corridors: Establishment of a café along the Kyrgyz – Tajik border
- 15. Some examples from the project: Some bits from Batken - 120 tons of onions (Novosibirsk) - 65 tons of bird cherry - 53 tons of apricots - 29 tons of onions - 60 tons of potatoes (Kazakhstan) - 40 tons of peach (Russia) - 100 tons of preserved (Kazakhstan) - 225 tons of barley (Tajikistan) - 1200 kg of rice (Bishkek)
Editor's Notes
- UNDP takes the view that international trade can play an important role in raising levels of human development and achieving sustainable poverty reduction. From this perspective, trade is a means to an end, not an end in itself. Properly harnessed, international trade can create opportunities for growth, poverty reduction and human development through for example: Expanding markets: exports allow an economy to overcome the constraints of its domestic market;Raising productivity: increased returns to scale in production resulting from access to international markets; andAccelerated technological development: from increased exposure to new technologies and knowledge. However, none of this is automatic or inevitable. Appropriate policies are also required across several fronts and sectors. UNDP’s trade-related support has three main objectives:(i) To help developing countries build capacity to compete internationally by overcoming supply side constraints;(ii) To help developing countries build capacity to negotiate, interpret and implement trade agreements (multilateral, regional and bilateral) in a manner that prioritizes poverty reduction and human development; and(iii) To help developing countries incorporate pro-poor, development-centered trade policies into national development strategies, including poverty reduction programmes.
- Trade as a leverage for human development through: Employment and income generation; Knowledge and technology transfer; Improving productivity; Contribution to economic growth which can lay the foundations for a sustainable human developmentThe relationship between trade, economic growth and sustainable human development is highly complex and interconnected. It remains undeniable that it is difficult to enlarge human choices when income and consumption are decreasing. This has been clearly demonstrated during the transition recessions of the 90s in the countries of the CIS. It therefore is undeniable that we need to seriously integrate trade and business development into our poverty reduction and human development efforts and vice versa.
- Trade a multiplier effect for human developmentEnlarging human choices when income and consumption are decreasing is problematic=> Role trade can play in enlarging human choicesHowever, there does not exist an automatic link between trade and poverty reduction/human development
- The second focus area, cross-border cooperation, would have two main components: the physical and the institutional trade infrastructure and would include both cooperation among the SPECA countries and between SPECA countries and their (other) neighbours. In trade-related physical infrastructure development, cross-border cooperation may include joint projects (with two or more countries as partners) for the construction of works like roads, railways, oil and gas pipelines, electricity transmission lines, and irrigation canals. However, irrespective of how a particular infrastructure is financed and managed, cross-border cooperation is key for ensuring that major infrastructure investments are made with due consideration of the needs, interests and resources of all the countries concerned. Considerable savings in construction, maintenance and operation costs could be achieved if transport links within and between the SPECA countries were allowed to follow the most economic routes, as dictated by topography and the potential for trade development, rather than by the way borders have been traced. Similar considerations also speak for close cooperation on the design, capacity and management of facilities for electricity generation and irrigation, and the proper costing and pricing of inputs and outputs, so that demand in the region can be met at minimum cost. Addressing these aspects properly and at an early stage would help obtain financing, minimise costs and maximise benefits, and thereby secure the long-term success of physical infrastructure investment. Enhanced information exchange, regular consultations and harmonised planning of major investments across the region would, therefore, be important to launch at an early stage of cross-border cooperation on physical infrastructure in the Aid-for-Trade context and to maintain, as a key element, throughout the preparation and implementation of physical investment programmes. Cross-border cooperation in institutional infrastructure development complements physical investment as well as efforts to improve the business environment. This component would address a number of key issues for developing overall international trade and particularly between neighbouring countries in the region and with the region’s neighbours. The focus would be trade facilitation, i.e., the harmonisation and simplification of rules, procedures and practices for trade across the borders and their formalisation, where appropriate, through corresponding agreements, whether bilateral or multilateral. This could include, for instance, the exchange of customs related information and the mutual recognition of certificates, inspection reports and the like, so as to minimise the number, the time and the cost of interventions by authorities in the process and, thereby, facilitate the ability of the business community to profitably engage in mutually beneficial trade. Evidently, conformity with international practice would be of paramount importance, in particular as this may also be required for WTO accession. The important role of transit through and between the SPECA countries would need to be kept in mind; depending on the circumstances, facilitating transit may require adhesion to, or improved application of international agreements like the TIR convention, or the preparation of agreements specific to the region but in accordance with best international practice.
- With support of AfT activities