Remarks by Angel Gurría
Geneva, Switzerland, 11 July 2017
Excellencies Ministers, Ambassadors,
Dear Roberto Azevedo,
It is a great pleasure to be back in Geneva for the launch of the sixth Aid for Trade at a Glance report, prepared jointly by the OECD and the WTO.
Since 2007, this work has shed light on how developing countries and their partners are harnessing trade to boost growth and tackle poverty. The evidence shows that this approach is delivering. But it also shows that more remains to be done.
The 2017 edition is a collaborative effort with other partners – including the World Bank, the Enhanced Integrated Framework, the International Telecommunication Union, the International Trade Centre, and UNCTAD.
The report puts a spotlight on how physical and digital connectivity is helping producers link up to markets.
It is ultimately a report about people around the world, and the impact of new opportunities on people. Take the example of Emmanuel Igbojekwe, who is now able to grow his security business, or Elder Dede who has established his designer shoe business because Facebook, in partnership with a Nigerian service provider, launched Express Wifi to empower local entrepreneurs. It is about Lanna Clothes Design, where women in rural Thailand are now able to sell their products all over the world using Amazon logistics services. It is about new business opportunities for women in rural India who now have access to mobile phones under a Telenor India project.
These and many other success stories are part of a larger story about societies that are transforming through digital connectivity. Digital connectivity helps developing countries to exploit economies of scale and network effects, to raise labour and capital productivity, and to access global value chains.
Global market places such as Amazon, eBay, and Alibaba are empowering firms in developing countries to scale up their production and overcome thin markets. These online platforms are lowering the costs associated with engaging in international markets; costs that often price SMEs in developing countries out of these markets. This has generated a large trade in smaller, low value goods. The report highlights that online sales increased in value from 16 trillion US Dollars to 25 trillion US Dollars between 2013 and 2015.
While digital connectivity opens new markets, physical connectivity can still be an important constraint for countries and firms wanting to trade. Trade facilitation and the offline infrastructure for trade -- roads, ports, and bridges -- are ever more important in the digital world.
More importantly, some 3.9 billion people remain offline, with only 1 in 4 people in Africa using the internet and only 1 in 7 people in LDCs. Up to a quarter fewer women than men are online. These gaps imply less access to economic opportunities, but also to healthcare, education, and other public services.
Aid for trade is critical for the digital and physical connectivity that countries need to trade, to grow, and to improve the lives of their people. While the success stories I mentioned earlier are the result of private investments, well-targeted public investments have played a crucial role, many of them funded by aid. This includes, for example, investments in the transport infrastructure that helps entrepreneurs to access markets; investments in the energy sector, in agriculture, and in communications, all of which are vital when it comes to creating an environment that is conducive to trade growth.
Since the start of the Aid for Trade Initiative in 2006, commitments from bilateral and multilateral donors have increased annually by more than 10%. In 2015, donors committed some 54 billion US Dollars per year in aid for trade. The total amount of aid for trade disbursed over the last decade totals almost 300 billion Dollars – roughly one-fifth of all ODA. Half of these funds were invested in building trade-related transport infrastructure and energy supply – sectors that are essential for turning digital connectivity opportunities into trading realities.
Support targeted at bridging the digital divide has remained relatively stable over the last ten years, averaging around 600 million Dollars per year. The focus of donor programmes is often on getting the regulatory framework in place and operating effectively. Once this happens, the private sector is eager to step in and invest in building physical ICT infrastructure.
This is the kind of synergy that the Addis Ababa Action Agenda stresses. It’s about going from the billions to the trillions, leveraging investment in ways that can transform lives.
The OECD is proud to play its part in helping to implement the Addis agreement. Whether it’s looking at how best to blend aid money with private finance effectively, or developing new ways of measuring public support for development, such as TOSSD (Total Official Support for Sustainable Development).
This brings me to my final point — the importance of an open, rules-based, multilateral trading system, to ensure a level playing field for trade in goods and services.
We need to work together to achieve a WTO Ministerial in Buenos Aires that delivers positive outcomes and that helps ensure that the benefits of trade are widely shared.
Today’s meeting provides an opportunity to take stock, and to forge the way forward. The task ahead of us is to deliver better aid for trade. In short, it’s about Better Policies for Better Lives. Thank you.
OECD work on trade