Definition
Official development assistance (ODA) comprises grants or loans to developing countries and territories on the Organisation for Economic Co-operation and Development/Development Assistance Committee (OECD/DAC) list of aid recipients that are undertaken by the official sector with promotion of economic development and welfare as the main objective and at concessional financial terms (if a loan, having a grant element of at least 25 percent). Technical cooperation is included. Grants, loans and credits for military purposes are excluded. Also excluded are aid to more advanced developing and transition countries as determined by the DAC.
Activities to help build trade capacity enhance the ability of the recipient country to:
· Formulate and implement a trade development strategy and create an enabling environment for increasing the volume and value-added of exports, diversifying export products and markets and increasing foreign investment to generate jobs and trade.
· Stimulate trade by domestic firms and encourage investment in trade-oriented industries.
· Participate in the benefit from the institutions, negotiations and processes that shape national trade policy and the rules and practices of international commerce.
These activities are further classified by the First Joint WTO/OECD Report on Trade-Related Technical Assistance and Capacity Building (2002) under two main categories, trade policy and regulations (divided into nineteen subcategories) and trade development (divided into six subcategories).
Goal/targets addressed
Goal 8. Develop a global partnership for development.
Target 12. Develop further an open, rule-based, predictable, non-discriminatory trading and financial system. Includes a commitment to good governance, development and poverty reduction—both nationally and internationally.
Target 13. Address the special needs of the least developed countries. Includes: tariff and quota-free access for least developed countries’ exports; enhanced programme of debt relief for HIPCs and cancellation of official bilateral debt; and more generous ODA for countries committed to poverty reduction.
Target 14. Address the special needs of landlocked countries and small island developing States (through the Programme of Action for the Sustainable Development of Small Island Developing States and the outcome of the twenty-second special session of the General Assembly).
Target 15. Deal comprehensively with the debt problems of developing countries through national and international measures in order to make debt sustainable in the long term.
Rationale
At Doha in 2001, donors committed to providing increased support to help developing countries, especially the least developed countries, build the capacity to trade and to integrate into world markets.
Data collected for this indicator will help monitor the following aspects of trade-related official development assistance:
· Transparency of trade-related technical assistance delivered.
· Exchange and sharing of information.
· Minimization and avoidance of duplication.
· Estimation of progress in the implementation of the Doha Mandates on technical cooperation and capacity building.
· Coordination and coherence.
· Achievement of the objectives mandated in paragraph 41 of the Doha Declaration.
Method of computation
See “Comments and limitations”.
Data collection and source
The World Trade Organization (WTO) and OECD have compiled the Doha Development Agenda Trade Capacity Building Database (TCBDB) that lists and quantify activities by bilateral and multilateral donors from 2001 onwards. The database lists both the number and the value of activities.
Data are reported from bilateral donors and multilateral and regional agencies that replied to the requests for information sent in May 2002 and April 2003 by the director-general of the WTO and the secretary-general of the OECD.
References
Organisation for Economic Co-operation and Development, www.oecd.org/dac/trade/tcb.htm.
World Trade Organization, tcbdb.wto.org.
First Joint WTO/OECD Report on Trade-Related Technical Assistance and Capacity Building, 2002, World Trade Organization and Organisation for Economic Co-operation and Development.
Comments and limitations
Donors differ in defining what constitutes a single “activity”. Some donors split individual activities into components in order to obtain detailed data on aid allocated to each subcategory. Others classify the whole activity under the most relevant subcategory. For some donors, the number of records in the database is larger than the actual number of activities. In the WTO/OECD Joint Report, the data are based on the actual number of activities.
There are also differences in the methodology used for reporting trade development activities among donors who replied to the requests for information. A number of donors isolated the trade components of each activity, whereas others reported the whole activity as trade related. The total amounts of trade-related technical assistance and capacity building per donor in this category should therefore be interpreted with caution.
The Joint Report also notes the necessity to refine the activity categories to better identify general trade development activities, such as trade fairs, trade information, publications or general export training. At present, most of these activities appear under “business support services and institutions”.
These issues are being addressed in the first update to the data, with results online by August 2003.
Agencies
Organisation for Economic Co-operation and Development.
World Trade Organization.