Global economy

Aid For Trade: Flows, climate and gender

01/08/2022 GIF

The Aid for Trade initiative, launched in 2005, helps developing countries access markets by articulating their trade objectives and aligning them with donors. Aid for Trade specifically helps to channel support to countries and populations most in need: in 2020, Africa received the largest share of Aid for Trade disbursements (38%), followed by Asia (35%), America (10%), Europe (6%) and Oceania (1%).

Since the start of Aid for Trade, donors have disbursed USD 556 billion in official development assistance (ODA) to crucial sectors and activities. Projects prioritise building productive capacity and economic infrastructure - 98% of disbursements in 2020 - and supporting economic diversification.

Aid for Trade also helps address emerging environmental and sustainability challenges. In 2020, 51% of Aid for Trade commitments included climate-related objectives, representing 56% of total climate-related ODA commitments in 2020. This new emphasis is partly due to growing demands embedded in international commitments like the Paris Agreement.

The COVID-19 pandemic reaffirmed the importance of Aid for Trade as a tool of crisis management, as countries lacking the capacity to implement monetary and fiscal stimuli were hit hard. Aid for Trade disbursements reached an all-time high of USD 48.7 billion in 2020, with USD 4.7 billion - 7% of Aid for Trade commitments - allocated to COVID-19 related activities. Aid for Trade also responded by supporting essential sectors of the COVID-19 response, such as pharmaceutical production.

The COVID-19 crisis also made it more difficult for women to participate in international trade. In 2020, 42% of Aid for Trade commitments from bilateral donors included a focus on gender, a share that has steadily increased in the last 10 years. Ensuring that projects target sectors where women work is key to maximising Aid for Trade’s support for gender equality.

See also: Aid for Trade at a Glance 2022: Empowering Connected, Sustainable Trade