Mobilizing Aid for Trade in Latin America and the Caribbean
3.8. Mobilizing the Private Sector Giving the right incentives. The private sector can play an important role in making aid for trade operational. It can be a partner of governments in building consensus on a long-term trade strategy; it can be a direct recipient of aid-for-trade and development finance; and it can provide funding for trade-related development projects, exploiting the new drive towards corporate social responsibility. Nonetheless, the private sector’s incentive systems and ways of working are often only modestly consistent with those of governments and donors. There are some notable exceptions, including the multilatinas, transnational corporations originating in LAC, which have been contributing to trade integration strategies. But generally the private sector’s involvement in trade policy, and in the aid-for-trade initiative, has been limited. To increase the incentive for the private sector to become more involved in the initiative, and in global markets generally, governments and donors should find ways for the initiative to simultaneously address the costs of business internationalization and provide timely assistance to mitigate those costs. 3.9. Improving Donor Coordination Simplifying administrative requirements. The Task Force advocated donor coordination at the country, regional and global levels. For low-income countries highly dependent on aid, such coordination (ensuring that multi-donor funding of projects or multiple administrative requirements do not create inefficiencies) is as important as coordinated national budget funding. Administrative harmonization is also important for middle-income countries. All recommendations on aid for trade urge donors to coordinate their administrative procedures and reporting requirements, so that recipients do not have to establish separate systems for each donor; aid for trade is no exception. Making more organized efforts to fill funding gaps. But middle-income countries may also need a different form of coordination, as the Task Force recognized. Some of them will want financing for a particular need, rather than general sector or budget support, and thus they have to be sure that there is at least one agency for which that need, for that country, is part of its assistance mandate. It is desirable to ensure that every reasonable need identified through some agreed process is met. The Task Force suggested that a “clearing-house function” be established at the country and regional levels, and that multilateral donor/recipient sessions could be organized to connect outstanding trade-related assistance needs to donors willing to contribute to their fulfillment. Designing flexible donor coordination strategies. Countries with more specific trade-related needs, and those that depend less on aid, might also be best supported through less elaborate donor coordination strategies than those proposed for LDCs through the EIF, and by coordination efforts that focus on quick disbursements, rather than an institution-building process. One instrument mentioned in discussions of aid for trade, the Joint Integrated Technical Assistance Program ( JITAP), provides targeted aid in a few areas to its African beneficiaries,
Published on Sep 14, 2007
this report was prepared by the integration and trade sector (int) as a contribution to the regional meeting on mobilizing aid for trade: la...