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  • 2009-2 ISSUES

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  • ISSUE 2/2009

                                                                                                                                                  2-2009 

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  • Patricia Francis, executive director of ITC, speaks candidly about aid for trade, opportunities in this financial crisis and the role of ITC.

    "The crisis has a human face," Pascal Lamy, Director General of WTO told participants attending the Second Global Review of Aid for Trade. "Poverty alleviation targets, whether as part of the MDGs (Millennium Development Goals) or otherwise, have become more challenging to achieve due to, among other things, the decline in export demand for goods.

    Export-led growth has seen the Asia and Pacific region prosper immensely over the past four decades, yet many countries still continue to experience lagging growth and severe poverty. The Asian Development Bank (ADB) estimates that as many as 900 million people in developing Asia live on less than $1.25 a day. Even within the more prosperous countries, rich and poor regions exist side by side, portraying the two faces of Asia as a striking reality.

    The Second Global Aid for Trade Review hosted by the WTO in early July revealed areas of consensus on the way forward. One after the other, heads of international organizations called for moving on to the implementation phase, resisting protectionism, more trade finance, a stronger role for the private sector and completing the Doha round. Strengthening the regional dimension of Aid for Trade, encouraging country ownership and better impact evaluation were also high on the agenda. "If Aid for Trade was urgent in 2007, it is essential today - it is the investment that will allow many developing countries prepare to exit the crisis by enhancing their trade capacity," stated WTO Director-General Pascal Lamy at the event.We believe in the importance of Aid for Trade in creating positive change within countries. It is our responsibility to translate the broader trade imperatives into reality for the private sector on the ground and to ensure that this brings benefits to those who need them most.

    The publications and online resources in the column on the right present the outcomes of the Second Global Aid for Trade Review and showcase examples of Aid for Trade activities implemented at regional and country levels.

    ITC's chief economist assesses the impact of the global financial crisis on developing countries, and recommends responses for international and domestic policy.

    Aid for Trade has met with controversy since its beginnings. Now further challenged by the economic crisis, it is essential that it develops new, forward-thinking mechanisms.Since its inception, Aid for Trade has spurred debate among stakeholders in a way few other developments could. Now, four years since it came to light in the 2005 Hong Kong Ministerial Declaration, Aid for Trade is still polarizing the opinions of political leaders and development economists worldwide.

    The Second Global Review on Aid for Trade held in Geneva on July 6-7, 2009 represented an important milestone to take stock of the gains made since the First Aid for Trade Global Review in 2007. The Inter-American Development Bank (IDB) is very proud to be a partner of this initiative in the Latin American and Caribbean region.

    As international designers race to find new inspiration and unique product sources for next season's line of ethical fashion items, they increasingly look towards Africa, its designers and its communities.In 2008, ITC approached leaders in the fashion community and distributors in Italy and in the United Kingdom to test the potential market for bags and accessories produced in Africa. The aim was to build a direct connection with a major fashion house.Creative Director of MaxandCo. (Max Mara Group), Luisa Laudi, decided to use some of the samples of materials presented to develop a small collection of bags and scarves. After a few weeks the first samples for the collection were received: bags, belts and bracelets worked in crochet using cotton yarn from Nairobi.

    With the help of private sector exporters, developing countries can trade their way out of poverty. Driven by this conviction, ITC projects are making a difference where it counts - on the ground.

    The Second Global Review of Aid for Trade brought together heads of international organizations, donor and beneficiary countries as well as experts from the public and private sectors. Hosted by the World Trade Organization (WTO) on 6-7 July, the conference reviewed progress and charted the future of the Aid for Trade initiative against the backdrop of the global economic and financial crisis.

    Comparative analysis shows that export-led programmes help to alleviate poverty in developing nations.

    At an ad hoc expert meeting on the contribution of migrant workers to development, hosted by UNCTAD on 29 July, high-level officials recognized the losses being suffered by the world's millions of migrant workers and the potential of using labour migration as a tool for recovering from the financial crisis.

    When Kim Arut's husband fell ill, she was left no choice but to leave her job and take over running the family business. In the three years since, Kumul Lodge in Papua New Guinea has been doing better than ever.

    As the economic crisis evolves, at least one emerging trend tells a positive tale: there is a growing awareness of Aid for Trade and its role in promoting economic growth worldwide.In the light of rapidly evolving economic recession, low-income countries are facing new challenges. But the crisis is also presenting these countries with opportunities to refocus their development strategies in this changing world economy.

    When it comes to expanding her fashion business, Samoan businesswoman Jackie Loheni is making the most of every opportunity and leading the way in improving conditions for women workers.

    On 16 July, a memorandum of understanding was signed for the Enhanced Integrated Framework (EIF), showing a firm interna-tional commitment to ensuring that least developed countries (LDCs) benefit from trade.

    Aid for Trade has long been recognized as a sure path to employment, investment and sustainable development. Now more than ever, says UNCTAD, developing countries depend on its guidance.

    Businesses in Tonga, like those in other small island states, face many trading challenges. Never deterred, 'Ofa Tu'ikolovatu is turning obstacles into opportunities for better business and the development of her country.