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Europe and CIS

Jacek Cukrowski

Team Leader,

UNDP, Europe and the CIS

Bratislava Regional Centre

Wider Europe:

AfT in Central Asia, South

Caucasus and Western CIS

“Wider Europe: AfT for Central Asia, South Caucasus, and Western CIS”Project Meeting

Bishkek, 9 March 2010

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Outline

Aid for Trade

UNDP human development agenda and trade

Wider Europe: AfT in Central Asia, South Caucasus and Western CIS - a framework

Project components in Central Asian countries Component I: AfT Road Map in Central Asia:

Identification of National and Regional AfT Priorities

Component II: Support to Economic Development along

Trade Corridors

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Aid for Trade

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AfT is part of overall development aid, but with the specific objective of helping least developed countries, to play an active role in the global trading system

to use trade as an instrument for growth and poverty alleviation

to overcome internal barriers lack of knowledge, excessive red tape, inadequate

financing, poor infrastructure

it is not a substitute for trade opening, but a necessary and increasingly important complement

Europe and CIS

What is about ?

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Increased trade,

competitiveness

and growth

Aid for Trade

trade reformentrepreneurship

private

investment

trade-related

capacity and

infrastructure

catalyst

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Key focus areas

Trade policy and regulation Europe and CIS

Building capacity

to formulate trade policy

participate in negotiations

implement agreements

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Key focus areas

Economic infrastructure Europe and CIS

Investing in the infrastructure – roads, ports, telecommunications, energy networks – needed to link products to global markets

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Key focus areas

Productive capacity building Europe and CIS

Strengthening economic sectors – from improved

testing laboratories to better supply chains – to increase

competitiveness in export markets

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Adjustment assistance Europe and CIS

Key focus areas

Helping with any transition costs from liberalization

loss of fiscal revenue

declining terms of trade

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0

5

10

15

20

25

30

2002-2005 2006 2007

Trade-related Adjustment

Trade Policy and Regulations

Building Productive Capacity

Economic Infrastructure

Aid for Trade commitments 2002-2007 (billions, constant 2007 dollars)

Source: OECD, Creditor Reporting System database

The biggest components: infrastructure and productive capacity Europe

and CIS

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20.8

1.2

7.1

1.7

0.4

5.2

3.1

1.7

0.3

0.6

1.0

11.6

1.2

2.6

1.1

0.9

2.4

2.9

0.4

0.1

0.6

0.5

0 5 10 15 20 25

Developing regions' total

Northern Africa

Sub-Saharan Africa

Latin America & the Caribbean

East Asia

South Asia

South-East Asia

Western Asia

Oceania

Transition countries of south-eastern Europe

Commonwealth of Independent States (CIS)

2007

2002

Source: OECD, Creditor Reporting System databaseNote: Four recipients of Aid for Trade (Croatia, Slovenia, St. Helena, Wallis & Futuna) are not included in any of these regions. They account forjust 0.4 per cent of total Aid for Trade commitments in 2007.

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Aid for Trade commitments

2002-2007 (billions, constant 2007 dollars)

AfT commitments by region

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UNDP human development agenda and trade

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World Trade Organization (WTO) sets the framework and provides a forum

run by its members

United Nations Conference on Trade and Development (UNCTAD)

technical assistance provider to governments

International Trade Centre (ITC) provides technical assistance to private sector (esp. SMEs) and trade

intermediaries

United Nations Development Programme (UNDP) ensures HD/MDG approach to trade issues

Role of multilateral organizations

in trade development Europe and CIS

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UNDP approach: Linking trade

and human development

Trade can be a powerful source of economic growth

…but while broadly based economic growth is necessary for human

development, it is not enough

Human development also requires enlarging people’s

choices and opportunities—especially poor people’s

liberalizing trade does not ensure poverty reduction or human

development, nor does it guarantee immediate economic growth

The nature of resource allocation and social inclusion are

important determinants of growth leading to poverty

reduction and human development

for women and those participating in the informal sector, especially

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Area Based Development Project UNDP approach to local development

Broad focus of the project components Agriculture, water management, microfinance, civil society, capacity building

of local administration

Lack of trade support component

Opportunities to support human and economic development through strengthening trade capacity and improving trade competitiveness

Trade marketing baseline assessment for export promotion interventions

Capacity building on trade mainstreaming

Establishing regional export promotion centers

Expanding SMEs´ access to financial services by developing trade-focused microfinance products (trade finance)

UNDP advantage: Area Based

Development Projects Europe and CIS

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Wider Europe: AfT in Central Asia, South Caucasus and Western CIS

- a framework

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BackgroundIn December 2008 the Finnish Ministry of

Foreign Affairs approved a proposal to

cooperate with UNDP Bratislava Regional

Centre in the following two areas

Trade for development in Central Asia

Kazakhstan, Kyrgyzstan, Tajikistan, Uzbekistan,

Turkmenistan

Aid for Trade project in Southern Caucasus and

Western CIS

Azerbaijan, Armenia, Georgia

Belarus, Ukraine, Moldova

In July 2009 project document was signed

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Wider Europe: Aid for Trade for Central Asia, South Caucasus and Western CIS

Project components

Component I Aid for Trade Road Map in Central Asia: Identification of

National and Regional AfT Priorities Aid for Trade Conference for SPECA countries proposed by the

Government of Azerbaijan

Component II Aid for Trade for Central Asia: Support to Economic

Development along Trade Corridors Kazakhstan (Semey)

Kyrgyzstan (Batken)

Tajikistan (Khojand)

Component III Aid for Trade Needs Assessments in South Caucasus and

Western CIS Armenia, Georgia, Belarus, Ukraine, Moldova

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Wider Europe: Aid for Trade for Central Asia, South Caucasus and Western CIS

Implementation framework

Time frame: 18 months: August 2009-January 2011

Budget Total 1st Phase: 1.6 mln Euro

Component I: 120,000, Component II: 792,000, Component III: 100,000

Core team in Bratislava Team Leader: Jacek Cukrowski

Project Manager: Massimiliano Riva (until December 2009)

Daniele Gelz (starting in March 21, 2010)

Support: Kim Boermans (since January 2010)

Project Steering Committee Tuula Yrjölä Ministry of Foreign Affairs of Finland

Director of the Unit for Eastern Europe

and Central Asia

Jens Wandel RBEC Deputy Regional Director

delegated to

Balazs Horvath Poverty Practice Leader at UNDP BRC

Rastislav Vrabensky UNDP Country Director in Tajikistan

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Component I: Aid for Trade Road Map in Central Asia:

Identification of National and Regional AfT Priorities

Component II: Aid for Trade for Central Asia: Support to

Economic Development along Trade Corridors

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Project components in

Central Asian countries

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Component I:

AfT Road Map in Central Asia:

Identification of National and Regional AfT Priorities

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Component I: Aid for Trade Road Map in Central Asia: Identification of National and Regional AfT Priorities

Background

AfT Ministerial Conference of SPECA Countries Conference proposed by the Governments of Azerbaijan and Kyrgyzstan

Supported by UNECE, ITC, WTO, UNDP, UNCTAD, EBRD, ADB, IDB…

Co-financed by Islamic Development Bank

Place and Timing (tentative): Azerbaijan, July [ November] 2010

Preparatory and Consultative Meetings Bishkek, March 2009; Geneva, May 2009, October 2009

Expert Meeting: Bishkek March, 2010

UNDP role Facilitate preparation of the background materials for the Conference

National AfT country studies

Regional review

Develop conference agenda

Coordinate efforts of all partners

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Aid for Trade Conference for SPECA countries

Objectives and focus

Objectives Identify national and regional priorities for trade

development

Call the attention of donors to these priorities

Focus The Economic Crisis and Post Crisis Recovery: AfT

Challenges in Central Asia (SPECA region)

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Component II:

AfT for Central Asia:

Support to Economic Development along Trade Corridors

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Component II: AfT for Central Asia: Support to Economic Development along Trade Corridors

Background: Trade Corridors Europe and CIS

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Component II: AfT for Central Asia: Support to Economic Development along Trade Corridors

Objectives Support economic development of the areas located

along selected transport corridors in Central Asia

Help small/micro entrepreneurs in urban and rural areas, farmers and associations of farmers to gain from the economic opportunities the new transport infrastructure will bring

Support local communities placed along transport corridors

promotion of international standards and procedures

identification of the products with the biggest trade potential

improvement of the understanding of market mechanisms

matching potential trading partners

improving the regions competitiveness, expanding trade and alleviating poverty

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Component II: AfT for Central Asia: Support to Economic Development along Trade Corridors

Next steps

Phase I Batken (Kyrgyzstan)

Khujand (Tajikistan)

Semey (Kazakhstan)

Phase II (2011-2013) ? strong expectations at UNDP BRC and RBEC HQ

donor’s interest

preliminarily ideas for continuation in Central Asia

… but Phase II depends on successful implementation of Phase I

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Thank you…

United Nations Development Programme,

Europe and the Commonwealth of Independent States,

Bratislava Regional Centre

http://europeandcis.undp.org

Jacek.Cukrowski@undp.org

Europe and CIS