Six World Trade Organization members on Tuesday pledged a combined $13 million to finance the Enhanced Integrated Framework (EIF), a significant show of support for trade as a development tool.
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The pledge was made on the same day that Prime Minister Hun Sen addressed WTO members and development partners at the Aid for Trade Global Review in Geneva, Switzerland, where he appealed for support to least developed countries (LDCs) as they strive to eradicate poverty and increase national wealth.
According to a WTO press statement on Wednesday, Australia, Denmark, Finland, Germany, Japan, and Sweden announced new commitments to the EIF during the Aid for Trade Global Review.
Cecilia Scharp, director of the Department for International Organizations and Policy Support at the Swedish International Development Agency (Sida), announced a contribution to EIF of 50 million Swedish krona ($5.4 million). This brings the total amount of Swedish support to 150 million Swedish krona for 2017-2022.
“Participation in global trade is important for development. However, there are a number of barriers and obstacles that need to be overcome for LDCs to participate meaningfully and equitably in international trade. These relate to both product quality, norms, standards, level of competitiveness, institutional capacity, market access, and appropriate strategies and policies,” said Ms Scharp.
“Sweden is proud to be one of the donors contributing to the efforts of EIF in assisting LDCs in promoting trade as an engine for development, growth and poverty eradication.”
EIF works to improve trade in partnership with LDC governments, development institutions, and NGOs, as well as the WTO’s Aid for Trade Initiative.
It works from Africa and the Americas to Asia and the Pacific, having helped 41 countries integrate trade into their national development plans while supporting over 1,300 micro- small- and medium-sized enterprises and over 35,000 women.
EIF executive director Ratnakar Adhikari, said, “These planned commitments from our donors will do so much to help LDCs as they work within a challenging and shifting global trade environment.
“For 10 years, EIF has been working with LDC governments, and we have seen success from Chad to Bhutan to the Solomon Islands. But more effort is needed, and we hope others will join us in putting LDCs in the drivers’ seat of inclusive development,” he added.
The new planned commitments to EIF will work to directly address LDC trade constraints through a holistic approach that is a mix of evidence-based research, sectoral strategies aimed at economic diversification and government coordination that results in work directly on the ground, according to the statement.
The world’s 47 LDCs are home to more than one billion people. Yet, their collective share of global trade is less than one percent, according to the WTO.
LDCs are particularly vulnerable to outside shocks like commodity price volatility, while in most LDCs per capita GDP growth is significantly below the rates needed to eradicate extreme poverty.
In his speech on Tuesday, the Cambodian prime minister said the government aims to transform Cambodia into a higher-middle income country by 2030 and higher income county by 2050.
“To achieve this, I call on all members of the World Trade Organization and development partners to continue supporting us and other LDCs to help us enhance our competitiveness and back our graduation from LDC status,” he said.