Trade Research Gap Focus of Proposed Partnership

December 15, 2010

  • Proposed Aid for Trade Effectiveness Research Partnership would ensure that least-developed countries benefit from trade-related research, data and knowledge.
  • World Bank research shows that high trade costs remain a key barrier for the least developed countries – with significant gains to be made in reform and capacity building.
  • Partnership would build on Bank’s ‘Open Data, Open Knowledge, Open Solutions’ initiative.

December 15, 2010—The World Bank took steps this week—with a proposal for a new Aid for Trade Effectiveness Research Partnership —to make sure the world’s least developed countries benefit from trade-related research, data and knowledge.

The proposed partnership, announced at a high-level trade workshop in Geneva, Switzerland, calls for coordination on research to improve trade aid effectiveness for the least developed countries (LDCs) in a post-financial crisis environment. The event, sponsored by the Bank’s Trade and International Integration team (in the Research group) in cooperation with the United Nations, outlined priorities for the LDCs on trade – with a focus on aid effectiveness for growth through lower trade costs.

The partnership would build on the World Bank’s new ‘Open Data, Open Knowledge, Open Solutions’ initiative outlined by Bank President Robert B. Zoellick in September 2010.

Speaking in Geneva, Mahmoud Mohieldin, Managing Director of the World Bank Group, issued a challenge to the development community to “come together in support of innovative and concrete research, data, and knowledge tools tailored to the LDCs.”

“The Bank is ready to forge a new partnership on research and data focused on trade and the LDCs,” said Mohieldin. “We are ready to work with the United Nations, other institutions, and especially our partners in least developed countries—researchers, government, and the private sector—in advancing this idea.”

Incurring Heavy Costs

For LDCs to realize gains from new market opportunities, they often need to incur heavy costs, noted participants in Geneva, which included Pascal Lamy, Director General of the World Trade Organization, Cheick Sidi Diarra, U.N. Under-Secretary General and High Representative for the LDCs, ambassadors, economists and academics.

Many developing countries lack capacity to invest appropriately in export infrastructure, such as modern ports, roads, reliable electricity and communications, as well as technology and knowledge, to meet standards demanded higher up the value chain, including those related to sanitation and certification.

“The post-crisis world demands lower trade costs for development as well as more effective and targeted aid solutions informed by new partnerships in research. The World Bank is committed to attaining a better understanding of the channels through which aid for trade affects the poorest of the world’s citizens,” said Justin Yifu Lin, Senior Vice President and Chief Economist of the World Bank Group.

Geneva participants will continue their discussion of aid for trade effectiveness research at the next joint trade meeting, set for Istanbul, Turkey, in May 2011, as part of the U.N. LDC-IV conference.