Leveraging resources for the development of Least Developed Country Trade
Geneva, 2 May 2017
Leveraging in-country resources has always stood at the heart of the EIF's work – enabling sustainable long‑term development and country stakeholding. As the concept of leveraging resources has evolved, the EIF has moved to help the Least Developed Countries (LDCs) to access expertise, cooperate with partners and build reputations with various development partners as well as access new sources of funding. Regional development banks, global development agencies and bilateral development programmes remain central, although a multi-pronged approach to resource-leveraging, involving new and innovative techniques, is increasingly important to the EIF's work in the LDCs.
Against this background, the EIF commissioned a study on leveraging resources for the development of LDC trade that was undertaken and presented by Mr Sven Callebaut in a thematic workshop on leveraging held on the margins of the 24th EIF Board Meeting. The engaging workshop saw the EIF partnership reflect on the work – the opportunities that arose, those that have been undertaken and those that faced obstacles in facilitating effective leveraging for LDC trade development.
Opening the interactive workshop, Mr Antti Piispanen from the Ministry for Foreign Affairs of Finland highlighted how the EIF was a unique partnership focused on the LDCs. He highlighted how the EIF had matched its mandate – explicitly given in the global initiatives, such as the 2030 Agenda for Sustainable Development and the Addis Ababa Action Agenda, with results on the ground. He also called on more concerted efforts in delivering impact through leveraging beyond capacity-building, technical policy advice and assistance, which had enabled the EIF programme to support the LDC governments to deepen local financial and capital markets, mobilize public sector resources and create a business environment conducive to private sector investment.
The leveraging study was introduced drawing on the EIF and external stakeholders' experiences, focused on leveraging practices in support of development of trade in LDCs. Mr Callebaut clearly distinguished fundraising from leveraging, which was based on cooperation, replicability and the use of diverse resources. This included the development of in-country human resources through training, expertise and research. The focus of the study's analysis of leveraging was not on quantity of resources but on breadth and sustainability. Mr Callebaut also emphasized the reputational importance of the EIF's mandate, as expressed in the Sustainable Development Goals.
The study included 14 best practice examples to inform future efforts. Whilst affirming the value of Diagnostic Trade Integration Studies (DTISs), Mr Callebaut noted the potential disconnect between the DTISs and leveraging in practice. Furthermore, inadequate in-country dissemination of the DTIS priorities could hinder leveraging efforts. Mr Callebaut used the latter part of his presentation to emphasize the importance of maximizing existing sources for resource‑leveraging. Mr Andrea Giacomelli from the Permanent Delegation of the Pacific Islands Forum Secretariat to the World Trade Organization (WTO) reinforced this point highlighting the use of pre-existing sources like the EIF institutional framework, which was reliably successful in his experience in the Pacific.
Mrs Tiina Satuli from the Permanent Mission of the European Union (EU) to the WTO, explained the EU's belief that leveraging was "exactly what the EIF should be looking at". In her intervention, she stressed that in the EU's Aid for Trade Development Strategy, "the private sector is the engine of growth … This is the key leveraging thinking behind the European Investment Plan".
Mr Willie Pakoa Luen from the Ministry of Tourism, Trade, Commerce and Ni-Vanuatu Business for Vanuatu focused on leveraging's effective benefits to sustainability. "We are using the EIF as leverage to attract other donors … [who] feel that their contribution into one project with other donors helps them to engineer more programmes rather than just focusing on one or two," he noted. This was reinforced by Ms Charlotte Frater from the Permanent Mission of New Zealand to the WTO who emphasized the national ownership principles in carrying forward effective leveraging, noting that "countries lead their own development – the Vanuatu Inclusive Tourism project was funded by New Zealand, the EIF and its partners – but was initiated and led by the Vanuatu Government." She also noted that while New Zealand does not provide resources to the EIF directly, their partnership in Vanuatu had proved the value of cooperation to co-finance and reduce the duplication of efforts between donors and the value of the EIF framework in providing coordinated assistance in Aid for Trade (AfT) for the LDCs to address a range of thematic areas like climate action and gender.
Mr Hendrik Schmitz Guinote from the Permanent Mission of the Federal Republic of Germany and EIF Board Member underscored the EIF's pillars of trade mainstreaming: "The trade strategy is imperative in achieving impact but also the mainstreaming of trade into the development strategies in the countries". He stressed the importance of in-country "ownership and leadership" by the "entire government", reaching across departments. His concerns were mirrored by Mr Giacomelli, who pointed out that "every time the EIF was not directly managed by the Government in the Pacific, the AfT process had not worked"; and by Ms Dominika Dor, from UNIDO, who emphasized the national ownership as the basis of EIF in-country efforts.
Mr Ashish Shah, Director of the Division of Country Programmes for ITC, provided a series of "provocative" insights, describing "a whole world of financial resources that are not necessarily ODA resources" including investments, remittances and blended finance. He echoed the concerns of the panel as a whole to stress that inclusivity and, especially, sustainability should form core objectives of leveraging going forward. He paid tribute to the seed funding provided by the EIF that led to productive ITC projects in The Gambia, Lesotho and Senegal.
The catalytic role of the EIF was also underscored by Mr Nyi Nyi Aung from the Permanent Mission of the Union of Myanmar. He underlined how Myanmar had used its Medium-term Plan to bring together trade strategies, analyses and policies enabling resource‑leveraging. On his part, Mr Sébastien Nzimana from the Ministry of Commerce, Industry and Tourism in Burundi and EIF Board Member also underscored how various analytical studies supported by the EIF had facilitated the development of key sectors in Burundi, bringing onboard resources to implement key projects.
"For each dollar the UNDP invests, it is able to mobilize an additional US$25", Ms Luisa Bernal from the UNDP Geneva Office highlighted, noting that UNDP had supported leveraging through the EIF framework in Chad and Mali. UNIDO also provided an update on the positive work done through the EIF in Benin, Cambodia and Lao PDR, while the Standards and Trade Development Facility (STDF) stressed its work in Burkina Faso and Nepal.
Ms Marlynne Hopper from the STDF elaborated on how the partnership between the EIF and the STDF had manifested itself through joint training workshops, sanitary and phytosanitary studies and projects. She emphasized the key role of national governments in achieving results and the importance of long‑term leveraging in-country to counter donor fatigue and other constraints. She elaborated on the role of the private sector, which was key to sustainability and a largely unrecognized source of funding until recently. She cautioned, however, that leveraging of diverse resources required greater flexibility, echoing the sentiments of Mr Callebaut and the study's findings. She reiterated the importance of sharing the results of projects so that partners can learn from each other, and she shared information on the joint ginger project with the EIF in Nepal.
The Executive Director of the Executive Secretariat of the EIF, Mr Ratnakar Adhikari, highlighted how the study would inform EIF Phase Two activities and further the LDC trade development agenda. "By providing a list of practical tools, grounded in the EIF's empirical research of best practices, the study would maximize the catalytic effect of the EIF partnership," he said, noting that the study and its practical tools are hoped to renew private sector involvement and leverage major sources of funding, such as regional organizations and development banks.
The panel provided a wide range of informative views and experiences and broadly concluded that in future, leveraging would rest upon pillars of mainstreaming and sustainability through engaging the private sector, FDI, domestic investments, blended financing, remittances and the effective utilization of existing resources. Mr Adhikari encapsulated the conclusions of the workshop saying that "the EIF is a catalytic initiative … if we are not doing leveraging, we are not performing our job effectively."
Notes to the editors:
The EIF is a multi-donor trust fund, which provides coordinated financial and technical support to build trade capacity in all 48 LDCs and three graduated countries. The EIF is the only global Aid for Trade programme exclusively designed for the LDCs and is, therefore, uniquely placed to assist countries to develop sustainable trade strategies, which have a positive impact on people's lives through the promotion of private sector development and job and income opportunities. The EIF is recognized under Goal 8a of the Sustainable Development Goals.