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    Trade Development for LDCs: ITC's Perspective


    © International Trade Centre, International Trade Forum - Issue 4/2000

    The Oxford Analytica article describes well the formidable, but surmountable constraints to integrating LDCs into the multilateral trading system. It concludes that vitally needed financial and technical assistance for LDCs will materialize only if "potential donors can be convinced that trade-related assistance is central to the development process". The issue is real; it transcends LDCs, as overall trade-related technical assistance is relatively quite limited.

    Yet it seems evident that developing countries cannot sustain growth and development over the long term without broadly-based export development. Why then has support for trade development languished and what should be done about it?


    Advocacy in the 'aid industry' is strong - as it should be - for development of health, education, housing, governance and other issues; but it is lacking for trade development. There is no proliferation of NGOs to advocate or foster trade development. In many bilateral and multilateral development agencies, the low priority for trade development is reflected by relatively limited funds and concerned staff. Developing-country trade ministries lack strength and find it difficult to compete for minimal budgetary resources. Planning and finance officials naturally respect donors' assistance priorities, especially where official development assistance significantly contributes to GDP and to the availability of foreign exchange.

    Weak advocacy for trade development may be explained in some donor countries by concerns about assisting 'cheap labour' imports. Interest groups in both developing and industrialized countries have visibly raised various concerns about globalization and the WTO regime. Health, education and other development activities are not burdened by strong 'negatives' such as these.


    Integrating trade development alternatives and issues into country development strategies - referred to as 'mainstreaming' trade - is key to understanding the value of trade development in achieving national development objectives. Mainstreaming trade development could reveal, for example, the potential impact of alternative export strategies on poverty reduction, rural development and employment; and it should identify complementary requirements (infrastructure and human resources) to implement those export strategies. In process terms (such as in the context of consultative groups), mainstream-ing would allow trade development needs to be evaluated for funding against other development priorities. This is the direction the Integrated Framework is now taking.

    The assumption is that support will materialize for export strategies and programmes when it is shown that export development contributes significantly to national development objectives, particularly poverty reduction. But advocacy will be needed at all levels to explain this ultimately to the aid constituencies in donor countries.

    Martin Dagata is Director of ITC's Division for Technical Cooperation Coordination. He can be reached at dagata@intracen.org
    For more information on the Integrated Framework, contact Anant Vijay, Chief, Office of Least Developed Countries and Africa, ITC. E-mail: info@ldcs.org
    Internet: http://www.ldcs.org