The Aid for Trade initiative was launched in 2005 with the aim of addressing the supply side and trade-related infrastructure constraints that often hamper developing countries’ participation in global trade. We are proud that more than USD 300 billion has been disbursed for aid-for-trade programmes and projects since the Aid for Trade Initiative was launched. We note that 27% of this total has gone to least-developed countries and recall the ongoing challenges they face.

This is the sixth edition of the Aid for Trade at a Glance publication. Since 2007, successive editions of this flagship publication have shed light on the steps being taken by developing country governments and their development partners to leverage trade for development. The 2017 edition adds further weight to the already substantial body of evidence highlighting the effectiveness of aid for trade. It focuses on how and why trade connectivity is critical for inclusiveness, sustainable growth and poverty reduction. It is intended to inform both practice and policy regarding aid for trade’s contribution to the 2030 Agenda for Sustainable Development.

This chapter provides an overview of the report which examines trade costs and their influence on sustainable development and poverty reduction. It analyses in particular the physical and digital connectivity required to plug into the global economy. It surveys the connectivity challenges faced by developing countries with a specific focus on the least developed, together with the action taken to tackle these constraints. It underscores that digital connectivity is not sufficient to engage in e-commerce – a range of other enabling factors must also be in place. It surveys the policies for supporting developing countries to engage in this form of trade. This overview provides a snapshot of what is happening in promoting trade inclusiveness and connectivity for sustainable development, the impact of that support and where improvements are needed.

This chapter surveys the responses submitted by developing countries, least developed countries, bilateral and multilateral donors, regional economic communities and south-south partners to the 2017 aid-for-trade monitoring and evaluation exercise. The 2017 exercise examines action to address physical connectivity constraints and reduce trade costs, in particular through national and regional actions to implement the WTO Trade Facilitation Agreement. It also extends consideration of trade costs into the area of digital connectivity, network infrastructure and service markets. A picture of concerted action--by governments, development partners and the private sector-- to promote trade, inclusiveness and connectivity for sustainable development emerges from this analysis.

Innovations in the digital economy can reduce the costs of engaging in trade and facilitate the physical delivery of traded goods, making trade potentially more inclusive. This chapter examines the opportunities and challenges brought about by digital connectivity and digital trade along the trading chain. It highlights that digital trade for development requires addressing, in addition to digital connectivity, new and old constraints to market integration and physical connectivity. It underscores the importance of efficient trade logistics services and emphasises the need to co-ordinate investments within regions and across hard and soft infrastructure. It then examines progress in cross-border connectivity and gives an update on the implementation of the WTO Trade Facilitation Agreement. Finally, while many opportunities to reduce trade costs arise from digitalisation, the paper highlights that the ability to adapt to the requirements and characteristics of digital trade flows, can influence the ability to realise the full potential for development.

This chapter examines how trade in services contributes to connectivity. It discusses the role of policies in services trade, looking at how these promote integration into the international trading system. The chapter details the economic relevance of services for national economies, as well as in international trade and investment. It identifies key channels through which trade in services contributes to physical and digital connectivity, examining relevant service sectors. The chapter discusses policies that affect trade in services and reviews recent research that underscores the impact of such policies on sectoral performance, economic welfare and development. Finally, it highlights the positive contribution that aid for trade can make in support of services policies.

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.

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.

As the digital economy expands and touches more business activities, it is important to consider how policies can help to harness e-commerce for sustainable development. This chapter examines the potential of developing countries to engage in and benefit from the expansion of e-commerce. It presents recent estimates of the value of global e-commerce, identifies related opportunities and challenges, gauges the e-commerce divide, and considers the extent to which countries are ready to engage in e-commerce. Finally, it identifies key policy areas to be addressed in national e-commerce strategies and highlights the need for more concerted policy efforts to support developing countries in this area. It discusses how to create synergies and greater scale in the overall efforts of the international community to enable more countries to engage in and benefit from e-commerce, and considers how aid for trade can support the strengthening of e-commerce readiness in developing countries.

Over the past three decades, the connections that bind the economic activities of countries have grown and deepened at a remarkable rate. This chapter looks at the role of digital connectivity in linking small and medium enterprises, and in particular women-owned or managed enterprises, with customers and suppliers around the world. Firm-level data show that there is a significant connectivity gap between small and large firms, as well as for women-owned or managed firms. This chapter uses a selection of firmlevel data to shed light on the causes and effects of these gaps, and to assess their ultimate impact on trade. Checklists to help policymakers identify policy solutions are also provided.

The emergence of information and communications technology, especially mobile phones, has changed how people in the least developed countries (LDCs) do business and organise their lives. However, most people in these countries still lack access to affordable internet connections and the LDCs face profound challenges to connectivity. Introducing policies to improve the enabling environment for trade and investment can help. This chapter looks at the policy aspects of digital connectivity in the LDCs and reviews examples of recent reforms that have enabled e-commerce to play an increasingly important role. It emphasises, nevertheless, that there is no "one-size-fits-all" solution. Ultimately, users in the LDCs will guide markets and governments, demonstrating what they most urgently require in terms of digital connectivity. Led by LDC governments and with focused co-operation among key stakeholders—including the private sector and international donors—much can be achieved in the way of inclusion.

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.

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.

A growing body of evidence highlights the effectiveness of aid for trade in generating positive trade outcomes. The focus on capturing trade outcomes such as increases in exports or reductions in trade costs, however, is now being complemented by an increasing focus on tracing the direct and indirect impacts of aid interventions on poverty reduction, in particular for women. In that context, this chapter has three main objectives. The first is to demonstrate that poor physical and digital connectivity are among the factors keeping people in poverty. The second is to provide evidence on how infrastructure and digital connectivity are contributing to poverty reduction, market access, financial inclusion and women’s economic empowerment. The third is to highlight some of the key points emanating from the 2017 aid-for-trade monitoring and evaluation exercise, including how combined efforts from various stakeholders can facilitate inclusive development and contribute to eradicating poverty.