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DEVELOPMENT: SPECIAL EVENTS
Integrated framework (IF) joint core agency seminar on the policy-relevance of mainstreaming trade into country development strategies: perspective of LDCs

Statement by Mr.Jonathan Fried, Senior Assistant Deputy Finance Minister of Canada

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In Panel F: the Wrap-up session, the seminar noted the concluding remarks by Mr Jonathan Fried, Senior Assistant Deputy Finance Minister of Canada, on his personal responsibility. The remarks are as follows:

A sustainable development strategy requires, among other things, approaches that are both pro-poor and pro-growth, as the means to achieve the globally agreed poverty reduction targets for 2015. Pro-growth, because private savings and investment are necessary to generate the wealth necessary for governments to fund public goods and investments in social infrastructure. Pro-poor, because developing the appropriate macroeconomic, fiscal, regulatory frameworks necessary for pro-growth approaches entails significant adjustments in society, particularly, in developing countries in a globalizing economy. As a result, it is clear that government investments in health, education, social infrastructure are necessary to protect the most vulnerable in society, and to better ensure the equitable distribution of income that should flow from pro-growth approaches.

Improving the ability of LDCs to take advantage of the benefits that liberalised trade can provide is, in most countries, subject to the empirical evidence, a key element that supports the creation of a pro-growth environment.

As a result, trade should properly be mainstreamed into national development plans, and trade should be integrated into development strategies. This position was evident in the course of the seminar, against the backdrop of the efforts already undertaken by many LDCs to lower barriers autonomously.

  • Acknowledging also that there are discussions at the WTO on mainstreaming development into trade; and,

  • Noting that there are prospects for significantly improving market access in all countries through the early launch of new trade negotiations.

Mainstreaming trade must be seen as, only one part, of a more comprehensive pro-growth development strategy. Trade plays a supporting role in back stopping a stable macroeconomic and fiscal policy framework and pro-competitive, pro-private sector activity, regulatory policies and the rule of law, through the enforcement of contracts, etc.

Sequencing is key. Trade benefits will not likely flow to LDCs unless trade liberalisation is synchronized with the development of a sound economic framework at home, alongside the development of appropriate social infrastructure.

To achieve these objectives, country ownership is essential. Many participants emphasised this point and supported it with first hand experience both from recipient governments and from involved agencies. Country ownership requires, in turn, effective coordination across ministries in government, and requires partnership between governments and private sector participants in the economy as well as partnership between the recipient government and the donor agencies involved.

Donor coordination among bilateral donors, within and between multilateral and regional agencies and even at the country level, on the ground, is lacking and in need of significant improvement. There are too many reports, too many frameworks and too little coordination.

Given the challenge of coordination, the general mood of the seminar suggested that the IF provided, at least, a promising platform that, if implemented well, as a shared responsibility, among donors, recipients and multilateral agencies alike, could promote the mainstreaming of trade and improved donor coordination within a country-owned Poverty Reduction Strategy Papers (PRSPs) framework, particularly through the Country Assistance Strategy (CAS) process. It might also provide a model for cost saving through improved coordination.

Funding, through a trust fund, to permit an improved IF process to be tested on a pilot project basis, was broadly supported.

As with any well administered program, there was a sense in the room that ongoing evaluation will be essential. Various panels had reviewed a number of case studies in various regions, the Asia-Pacific and Sub-Saharan African countries. Each of the examples provided important lessons for future programs and for the future implementation of an improved IF including, in particular, the lesson of the autonomous liberalisation already undertaken and proposed by both developed and developing countries.

The Trade Policy Review (TPR) process could be enhanced to provide better guidance to LDCs on trade rules and on liberalisation within a broader context of national development plans. The World Bank, the IMF and other country directors could be invited to participate in the TPR.

Improved statistics would be of immeasurable assistance to donors and recipients alike.

It would be useful if the results of the seminar, as well as the papers and presentations that formed the analytical foundation for the discussions, were forwarded to those who are responsible for the preparation for Third United Nations Conference for Least-Developed Countries (LDC-III), to those responsible for the UN Conference on Financing for Development and to ensure that they are forwarded and distributed to bilateral donors, to the regional and multilateral donor agencies who may not be represented at the seminar, such as the regional banks who are also partners in the Poverty Reduction Strategy Papers (PRSPs) process.

 
Note

Participants agreed to request the Director-General to circulate the outcome of the seminar to:

  • The Okinawa Workshop on Trade-Related Capacity-Building, 2-4 March 2001;

  • Third United Nations Conference for Least-Developed Countries, Brussels, 14-20 May 2001;

  • The Meeting on Financing for Development (FFD); and to,

  • Other multilateral and regional institutions and bodies.

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