Aid for Trade in 2012: Increasing Volumes Hardening Terms CTD - PowerPoint PPT Presentation

Aid for Trade in 2012: Increasing Volumes Hardening Terms CTD Session on Aid for Trade WTO, 9 April 2014 Frans Lammersen, OECD

Aid for Trade in 2012 OUTLINE • How much Aid for Trade was committed and disbursed? • What does it support? • Who gets it? • Who provides it? • Conclusions

Commitments continue to expand… USD billion (2012 constant) 60 Commitments up 20% • 53.8 since 2011 and up 110% 47.4 50 44.6 since 2002-05 baseline 41.9 40 Economic infrastructure • 33.7 USD 31 bn up 125% 57% 30 25.8 of total flows 20 Building Productive Cap. • USD 21.6 bn up 92% 40% 10 of total flows 0 But support for trade • 2002-05 avg. 2006-08 avg. 2009 2010 2011 2012 policy and regulations has Trade Policy & Regulations Economic Infrastructure stagnated Building Productive Capacity Trade-related Adjustment Source: OECD-DAC, Credit Reporting System (CRS)

…increasing the share of AfT in overall ODA… USD billion (2012 constant) Share (%) 150 100 Share of AfT in Sector • Allocable ODA has 120 80 Total sector increased from 33% in allocable (left axis) past years to almost 40% 90 60 in 2012 60 40 Increases in AfT drove • AFT share (%) the overall rise in Total 30 20 Sector Allocable ODA in 2012 0 0 2002-2005 2006-08 avg. 2009 2010 2011 2012 avg. Source: OECD-DAC, Credit Reporting System (CRS)

…resulting in higher disbursements… USD billion (2012 constant) 60 Disbursements increased • to USD 39 bn as earlier 50 commitments are being 39.1 36.9 disbursed 40 34.1 30.5 USD 213 bn has been 30 • 24.2 disbursed since 2006 20 Growth rate slowing from • 10 an average of over 10% during 2010 and 2011 to 0 5% in 2012 2006-08 avg. 2009 2010 2011 2012 Trade Policy & Regulations Economic Infrastructure Building Productive Capacity Trade-related Adjustment Source: OECD-DAC, Credit Reporting System (CRS)

…largely benefiting Africa… (USD billion 2012 constant) 25 African share of aid for trade was • 30% during 2002-05 but this has 20 risen to 40% in 2012 USD 21.3 bn was provided in • 15 2012, almost 180% higher than the baseline and 55% higher 10 compared to 2011 5 Flows to Europe have also • expanded while they have stagnated to other regions 0 Africa America Asia Europe Oceania 2002-05 avg. 2006-08 avg. 2009 2010 2011 2012 Source: OECD-DAC, Credit Reporting System (CRS)

…and regional and global programmes… (USD million 2012 constant) 3000 Multi-country and regional • programmes reached USD 7.0 2500 bn in 2012 up from USD 2.3 bn during 2002-05 2000 1500 Increasing regional • programmes help expand 1000 markets by reducing the thickness of borders, 500 especially in Sub-Saharan 0 Africa Africa America Asia Europe Oceania 2002-05 avg. 2006-08 avg. 2009 2010 2011 2012 Source: OECD-DAC, Credit Reporting System (CRS)

…but LDCs are not keeping pace… USD billion (2012 constant) 35 • The large increase in aid for Low-income countries 30 trade was driven by Middle- of which : Least developed Income Countries with USD 25 Middle-income countries 31 bn (58% of the total) - 20 38% higher than 2011 15 • LDCs received USD 13.1 bn 10 (24% of the total) - 5 down 2% from 2011 0 2002-05 2006-08 2009 2010 2011 2012 avg. avg. Source: OECD-DAC, Credit Reporting System (CRS)

…and terms of assistance are hardening… USD billion (2012 constant) 40 • Traditionally aid for trade Grants Loans is split evenly between loans and grants 30 • However in 2011 and 20 especially 2012, loans have increased significantly while grants have declined 10 • In 2012, only 35% of aid for trade was in grant form 0 2002-05 avg.2006-08 avg. 2009 2010 2011 2012 Source: OECD-DAC, Credit Reporting System (CRS)

…with Middle Income Countries dominating Commitments, USD billion (2012 constant) 0.0 1.0 2.0 3.0 4.0 5.0 • Top 10 recipients received India 4.0 50% of total flows Turkey 3.3 • Recipients include: Vietnam 2.6 Kenya 2.3 – 7 Middle Income Countries Morocco 2.3 and only 2 LDCs Egypt 2.1  Africa (4) Ethiopia 2.0  Asia (4) Afghanistan 1.8  Europe (1) Pakistan 1.6  Americas (1) Brazil 1.3 2012 (50% of total allocated AFT) Source: OECD-DAC, Credit Reporting System (CRS)

…and 5 Donors providing the bulk of AfT… USD billion (2012 constant) 0 2 4 6 8 10 12 14 • Top 5 donors provide 66% of EU Institutions total aid for trade but mostly in Japan loans World Bank United States • The EU increased significantly France in 2011 and 2012 to reach USD Germany 11 bn AfDB • Japan (USD 8.7 bn) and World AsDB Bank (USD 7.9 bn) remain Netherlands major donors 2012 (83% of total AFT) United Kingdom Source: OECD-DAC, Credit Reporting System (CRS)

…mostly by expanding loan-financed programmes… commitments, USD billion (2012 constant) 0 2 4 6 8 10 12 14 • Some of the top donors have EU Institutions expanded their aid for trade Japan through greater use of loans World Bank • Traditionally the majority of France support provided by the EU Germany was in grant form but in 2012 AfDB its programme was dominated by loans AsDB Arab Fund • Multilateral donors typically Grants Loans Korea have a higher proportion of OFID loans Source: OECD-DAC, Credit Reporting System (CRS)

…in middle income countries Share of loans in income group (%) 100 • AfT provided to middle 90 income countries is almost 80 80% loans and this share has 70 been increasing since 60 2002-05 50 40 • For LICs, the share of loans 30 is much lower and relatively 20 unchanged at 40% 10 0 2002-05 avg. 2006-08 avg. 2009 2010 2011 Low-income loan share Middle-income loan share Source: OECD-DAC, Credit Reporting System (CRS)

Other official flows continue to decline… USD billion (2012 constant) 30.0 OOF have fallen in recent • years following a surge of 25.0 post-crisis lending in 2009 20.0 USD 37.4 bn was committed • 15.0 in 2012 – USD 21 bn for 10.0 economic infrastructure and USD 15.6 bn for building 5.0 productive capacity. Less than 0.0 USD 1 bn for trade policy and Trade Policy & Economic Infrastructure Building Productive regulations Regulations Capacity 2002-05 avg. 2006-08 avg. 2009 2010 2011 2012 Source: OECD-DAC, Credit Reporting System (CRS)

…and remain concentrated in MICs USD billion (2012 constant) 35.0 OOF fell 13% to USD 43 bn • after a large 2009 increase 30.0 25.0 Multilaterals provide most of • 20.0 the support 15.0 Indonesia, China, Brazil, • 10.0 Turkey and Kazakhstan are the 5.0 largest recipients 0.0 Mostly large projects in • LDCs OLICs LMICs UMICs better-off countries 2002-05 avg. 2006-08 avg. 2009 Source: OECD-DAC, Credit Reporting System (CRS)

Conclusions • Overall a mixed picture • Aid-for-Trade Commitments and disbursements continue to grow strongly • Financing major infrastructure and private sector development projects in Africa • But growing concern about the terms of assistance and the allocation to LDCs

For additional information: www.oecd.org/dac/aft Thank you