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Stakeholders feedback on trade, development and poverty reduction initatives in Eastern and Southern Africa:
Key messages and possible ways forward


- A Civil Society Perspective -

Alexander Werth

Consumer Unity Trust Society (CUTS) & Centre for International Trade, Economics and Enviroment (CITEE)

13 July 2005

SARPN acknowledges permission from CUTS and CITEE to post this document.
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Introduction

  1. Trade, Development and Poverty Reduction (TDP)1

    CUTS Centre for International Trade, Economics & Environment (CUTS-CITEE) has undertaken a project titled 'Linkages between Trade, Development & Poverty Reduction'. It is supported by the Ministry of Foreign Affairs, The Netherlands and the Department for International Development (DFID), UK. It will be implemented in select countries in Africa, Asia and Europe in a partnership mode.

    The debate on linkages between trade, development and poverty reduction is not new. Trade policy potentially affects poverty through its effects on economic growth and income distribution - though the effects of trade on income distribution have been more firmly established than its impact on growth. Given that poverty reduction is sensitive to income distribution, this is very significant. Pro-poor growth policy has greater impact on reducing poverty, than growth per se. And, given the present trade and investment regime, an open and simple trade policy can foster some external discipline, reduce distortions on domestic markets, and narrow the scope for wrong or unbalanced policies in other areas.

    Another dimension to the issues of linkages between trade, development and poverty reduction is the impact of protectionist policies on the poor. If trade policy benefits the relatively well off by protecting import-competing sectors controlled by capital owners, then trade liberalisation is likely to redistribute income to the poor. This notion is, however, based on certain assumptions, which have less relevance in today's trade and investment regime. The changing policy dimensions and concomitant role for policy coherence needs to be analysed. Thus, there are various dimensions to the linkages between trade, development and poverty reduction. More so, both theoretical and political economic dimensions are changing as well as unfolding (i.e. the emergence of new ones) in this new trade and investment regime.

    Some efforts are being made to look into the various dimensions of the issue, and making trade and investment liberalisation work for the poor. But, unfortunately, many such efforts do not attempt to look into the issue holistically, i.e. in both theoretical and political economic terms, supported by civil society's (Northern as well as Southern) understanding. Furthermore, issues relating to the effects of trade and investment liberalisation on the poor need to be looked into in a positive manner, and an overarching purpose of all the activities is to find out the conditions necessary for mainstreaming international trade into national development and poverty reduction strategies - while keeping in mind issues relating to policy coherence.

    Realising this vacuum and pursuant to its mandate of building consensus on issues affecting the livelihoods of the poor, this project will manifest the policy relevance of international trade on poverty reduction and will thus help in articulating policy coherence, in particular between the international trading system and national development strategies. The TDP project is also acting on the assumption that international trade has a major role to play to achieve the Millennium Development Goals (MDGs) and reduce absolute poverty by half by the year 2015.


  2. Research Objective and Methodology

    The objective of the present paper is to study a select number of TDP initiatives (TDPIs) in Eastern and Southern African (ESA) countries provided by both governmental and inter-governmental institutions, by reviewing the origin, objectives and outcomes of these focus TDPIs, as well as gathering information necessary for making recommendations on how to make existing TDPIs more relevant for ESA development and poverty reduction efforts. In this survey the trade-related aspects of country-specific Poverty Reduction Strategy Papers (PRSP) were also to be taken into account.

    In terms of methodology, this survey looks: firstly, at one bilateral TDPI each in Kenya, Uganda and Zambia, namely the DFID - Kenya Trade and Poverty Programme (KTTP); the EU - Uganda Programme on Trade Opportunities and Policy (UPTOP); and the USAID - Zambia Trade and Investment Enhancement Project (ZAMTIE); secondly, at one regional TDPI each under COMESA, EAC and SADC, that is the ACBF2 - COMESA Capacity Building Project; the BMZ/GTZ - Technical Assistance to the EAC Secretariat project; and the DFID - Regional Trade Facilitation Programme (RTFP) for SADC; and, lastly, at one international TDPI, which is the IMF/ITC/UNCTAD/UNDP/World Bank/WTO-led Integrated Framework (for the LDCs Uganda and Zambia).

    The selection of the altogether seven TDPIs was guided by the following considerations: diversity of donors - bringing together UK, US and Germany as key representatives of the donor country community in the ESA region working on trade-related capacity building, as well as various international and regional inter-governmental development partners; diversity of management/implementation set-ups - some TDPIs are being coordinated by technical assistants/advisors directly placed with the Ministry/Secretariat of the regional body, some others are being managed in partnership between the donor and recipient, while others are being managed and/or implemented by contracted consultancy firms; as well as diversity in focus and breadth - while some of the surveyed TDPIs largely concentrate on one target recipient (e.g. the secretariat of a regional body), others are operating on a multi-level and multi-target basis. Then, while some may focus on rather traditional technical assistance in the sense of providing immediate advisory services, others can focus on multi-stakeholder capacity building and empowerment on trade policy, on linking local producers to international market, or on all or some of these aspects taken together.

    Main research tool was direct interview, as well as in a few cases interview by using questionnaires, with select trade officials at Trade Ministries3 and Secretariats of regional bodies, on the one hand, and donor agency representatives and project mangers/implementers, on the other. Also, a small number of CSO representatives was consulted in this effort. The interviews were conducted under assurance of non-attributable presentation of the feedback provided. According to the Terms of Reference for this survey, a set of given questions each for TDPI recipients and TDPI providers had to be addressed in the interviews. The respective 'questionnaires' are annexed to this study. The information gathered through the interview process was later complemented by review of relevant information in existing and practically obtainable literature, as well as in the internet.


Footnotes:
  1. This section is largely copied from the CUTS-CITEE concept note Linkages between Trade, Development & Poverty Reduction, February 2005.
  2. African Capacity Building Foundation. The Foundation, based in Harare, Zimbabwe, is an independent, capacity-building institution established in 1991 through the collaborative efforts of the African Development Bank (AfDB), the World Bank, and the United Nations Development Programme (UNDP), as well as African governments and bilateral donors. For further information, visit: http://www.acbf-pact.org/aboutACBF/TheFoundation.asp.
  3. It should be noted here that one trade official from a West African country - Sierra Leone - also kindly provided feedback on TDPIs provided to the country.


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