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

OUTLINE

• How much Aid for Trade was committed

and disbursed?

• What does it support?
• Who gets it?
• Who provides it?
• Conclusions

Aid for Trade in 2012

Commitments continue to expand…

• Commitments up 20%

since 2011 and up 110% since 2002-05 baseline

• Economic infrastructure

USD 31 bn up 125% 57%

• f total flows
• Building Productive Cap.

USD 21.6 bn up 92% 40%

• f total flows
• But support for trade

policy and regulations has stagnated

25.8 33.7 41.9 47.4 44.6 53.8 10 20 30 40 50 60 2002-05 avg. 2006-08 avg. 2009 2010 2011 2012 USD billion (2012 constant)

Trade Policy & Regulations Economic Infrastructure Building Productive Capacity Trade-related Adjustment

Source: OECD-DAC, Credit Reporting System (CRS)

Total sector allocable (left axis) AFT share (%)

20 40 60 80 100 30 60 90 120 150 2002-2005 avg. 2006-08 avg. 2009 2010 2011 2012 Share (%) USD billion (2012 constant)

…increasing the share of AfT in overall ODA…

• Share of AfT in Sector

Allocable ODA has increased from 33% in past years to almost 40% in 2012

• Increases in AfT drove

the overall rise in Total Sector Allocable ODA in 2012

Source: OECD-DAC, Credit Reporting System (CRS)

…resulting in higher disbursements…

• Disbursements increased

to USD 39 bn as earlier commitments are being disbursed

• USD 213 bn has been

disbursed since 2006

• Growth rate slowing from

an average of over 10% during 2010 and 2011 to 5% in 2012

24.2 30.5 34.1 36.9 39.1 10 20 30 40 50 60 2006-08 avg. 2009 2010 2011 2012 USD billion (2012 constant)

Trade Policy & Regulations Economic Infrastructure Building Productive Capacity Trade-related Adjustment

Source: OECD-DAC, Credit Reporting System (CRS)

…largely benefiting Africa…

• African share of aid for trade was

30% during 2002-05 but this has risen to 40% in 2012

• USD 21.3 bn was provided in

2012, almost 180% higher than the baseline and 55% higher compared to 2011

• Flows to Europe have also

expanded while they have stagnated to other regions

5 10 15 20 25

Africa America Asia Europe Oceania (USD billion 2012 constant)

2002-05 avg. 2006-08 avg. 2009 2010 2011 2012

Source: OECD-DAC, Credit Reporting System (CRS)

…and regional and global programmes…

• Multi-country and regional

programmes reached USD 7.0 bn in 2012 up from USD 2.3 bn during 2002-05

• Increasing regional

programmes help expand markets by reducing the thickness of borders, especially in Sub-Saharan Africa

Source: OECD-DAC, Credit Reporting System (CRS)

500 1000 1500 2000 2500 3000

Africa America Asia Europe Oceania

(USD million 2012 constant)

2002-05 avg. 2006-08 avg. 2009 2010 2011 2012

…but LDCs are not keeping pace…

• The large increase in aid for

trade was driven by Middle- Income Countries with USD 31 bn (58% of the total) - 38% higher than 2011

• LDCs received USD 13.1 bn

(24% of the total) - down 2% from 2011

5 10 15 20 25 30 35

2002-05 avg. 2006-08 avg. 2009 2010 2011 2012

USD billion (2012 constant) Low-income countries

• f which : Least developed

Middle-income countries

Source: OECD-DAC, Credit Reporting System (CRS)

…and terms of assistance are hardening…

• Traditionally aid for trade

is split evenly between loans and grants

• However in 2011 and

especially 2012, loans have increased significantly while grants have declined

• In 2012, only 35% of aid

for trade was in grant form

10 20 30 40

2002-05 avg.2006-08 avg. 2009 2010 2011 2012

USD billion (2012 constant)

Grants Loans

Source: OECD-DAC, Credit Reporting System (CRS)

…with Middle Income Countries dominating

• Top 10 recipients received

50% of total flows

• Recipients include:

– 7 Middle Income Countries and only 2 LDCs

• Africa (4)
• Asia (4)
• Europe (1)
• Americas (1)

4.0 3.3 2.6 2.3 2.3 2.1 2.0 1.8 1.6 1.3 0.0 1.0 2.0 3.0 4.0 5.0 India Turkey Vietnam Kenya Morocco Egypt Ethiopia Afghanistan Pakistan Brazil Commitments, USD billion (2012 constant)

2012 (50% of total allocated AFT)

Source: OECD-DAC, Credit Reporting System (CRS)

…and 5 Donors providing the bulk of AfT…

EU Institutions Japan World Bank United States France Germany AfDB AsDB Netherlands United Kingdom 2 4 6 8 10 12 14 USD billion (2012 constant) 2012 (83% of total AFT)

• Top 5 donors provide 66% of

total aid for trade but mostly in loans

• The EU increased significantly

in 2011 and 2012 to reach USD 11 bn

• Japan (USD 8.7 bn) and World

Bank (USD 7.9 bn) remain major donors

Source: OECD-DAC, Credit Reporting System (CRS)

…mostly by expanding loan-financed programmes…

• Some of the top donors have

expanded their aid for trade through greater use of loans

• Traditionally the majority of

support provided by the EU was in grant form but in 2012 its programme was dominated by loans

• Multilateral donors typically

have a higher proportion of loans

Source: OECD-DAC, Credit Reporting System (CRS)

EU Institutions Japan World Bank France Germany AfDB AsDB Arab Fund Korea OFID 2 4 6 8 10 12 14 commitments, USD billion (2012 constant)

Grants Loans

…in middle income countries

• AfT provided to middle

income countries is almost 80% loans and this share has been increasing since 2002-05

• For LICs, the share of loans

is much lower and relatively unchanged at 40%

Source: OECD-DAC, Credit Reporting System (CRS)

10 20 30 40 50 60 70 80 90 100 2002-05 avg. 2006-08 avg. 2009 2010 2011 Share of loans in income group (%)

Low-income loan share Middle-income loan share

Other official flows continue to decline…

• OOF have fallen in recent

years following a surge of post-crisis lending in 2009

• USD 37.4 bn was committed

in 2012 – USD 21 bn for economic infrastructure and USD 15.6 bn for building productive capacity. Less than USD 1 bn for trade policy and regulations

0.0 5.0 10.0 15.0 20.0 25.0 30.0

Trade Policy & Regulations Economic Infrastructure Building Productive Capacity USD billion (2012 constant)

2002-05 avg. 2006-08 avg. 2009 2010 2011 2012

Source: OECD-DAC, Credit Reporting System (CRS)

• OOF fell 13% to USD 43 bn

after a large 2009 increase

• Multilaterals provide most of

the support

• Indonesia, China, Brazil,

Turkey and Kazakhstan are the largest recipients

• Mostly large projects in

better-off countries

0.0 5.0 10.0 15.0 20.0 25.0 30.0 35.0

LDCs OLICs LMICs UMICs

USD billion (2012 constant)

2002-05 avg. 2006-08 avg. 2009

…and remain concentrated in MICs

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

Thank you

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