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This edition of Aid for Trade at a Glance focuses on trade connectivity, which is critical for economic growth, inclusiveness and sustainable development. Physical connectivity enables the movement of goods and services to local, regional and global markets. It is closely intertwined with digital connectivity which is vital in today’s trade environment. Yet, the Internet remains inaccessible for 3.9 billion people globally, many of whom live in the least developed countries.
This report builds on the analysis of trade costs and extends it into the digital domain, reflecting the changing nature of trade. It seeks to identify ways to support developing countries – and notably the least developed – in realising the gains from trade. It reviews action being taken by a broad range of stakeholders to promote connectivity for sustainable development, including by governments, their development partners and by the private sector. One message that emerges strongly is that participation in e-commerce requires much more than a simple internet connection.
Chapters were prepared by the World Bank, the United Nations Conference on Trade and Development (UNCTAD), the International Trade Centre (ITC), the Organisation for Economic Co-operation and Development (OECD), the World Trade Organisation (WTO), The International Telecommunication Union (ITU), and Business for eTrade Development.
For many governments, making the most of e-trade to generate opportunities for economic growth, job creation and poverty reduction is a priority. Upgrading e-trade competitiveness requires an understanding of the diverse elements of the e-trade environment, from the foundations of connectivity to the key enabling conditions, as a basis for policy reform and aid for trade. This chapter surveys the key reasons why e-trade matters for developing country participation in trade. It examines the key elements of the e-trade environment, including the foundations for connectivity. It looks at the enabling conditions for e-trade, with examples of World Bank projects. The chapter introduces a new approach being piloted by the World Bank for assessing the e-trade environment at the country level, in order to assist developing country governments in undertaking reform and identifying priority areas for assistance from the World Bank and other partners.
The enabling environment for digital trade is suboptimal in many developing countries, impeding the translation of new technologies into trade and growth. Yet there are huge gaps in the data available on private sector views, and on systematic public-private collaboration. This chapter discusses the findings from interviews with companies engaged in e-commerce to shed light on the challenges of the enabling environment for digital trade. It examines data that show that trade finance, logistics, and digital regulations are often suboptimal, making it difficult for developing country companies to engage in cross-border e-commerce. It provides highlights of various projects being championed by the private sector to cultivate e-commerce worldwide, including among women and rural entrepreneurs. The chapter proposes innovative solutions to these challenges and highlights ways of operationalising public-private partnerships in e-commerce development, as well as fresh ways of financing them, such as social impact bonds. It maps out policy pathways to overcome the challenges to e-commerce.
Information and Communication Technologies (ICTs) are key building blocks of the digital economy, to facilitate trade and drive e-commerce. Strong growth in ICT infrastructure, connectivity, access and use promise great development opportunities but the full potential of the Internet remains untapped, as over half the world’s population remains offline. Unless policy-makers address infrastructure, affordability but also broader socio-economic challenges outside the ICT ecosystem, the Internet is liable to reinforce existing inequalities, instead of addressing them. This chapter analyses progress but also the gaps that exist in developing countries—and in particular the least developed countries—in terms of infrastructure, connectivity and quality of service, particularly for mobile and fixed-broadband Internet. It addresses some key connectivity bottlenecks and points to recommendations to overcome these. The chapter looks at fixed- and mobile- broadband prices, and the affordability of services in developed and developing regions. In addition to addressing supply-side barriers, it examines demand-side barriers outside the ICT ecosystem, including broader socio-economic inequalities, digital and analogue skills, and the availability of relevant local content.
This chapter looks at aid-for-trade priorities, policies and programmes, particularly in the areas of physical and digital connectivity. It provides an overview of the financing for development agenda, highlighting the critical role of official development assistance (ODA) for the least developed countries, as well as its catalytic role in higher-income developing countries. The chapter analyses 2002-15 aggregate aid-for-trade disbursements (around USD 300 billion) and takes a detailed look at aid-for-trade programmes that are building physical and digital connectivity. It offers a brief overview of academic findings on the results of aid-for-trade investments, as well as recent evaluations of donor aid-for-trade strategies and programmes. Case stories show how aid for trade is helping countries improve their physical and digital connectivity, turning trade opportunities into trade flows. Finally, the chapter provides an analysis of aid-for-trade commitments in 2015, closing with a series of conclusion.