"Today developing countries are major drivers of global trade. Many countries have benefited greatly from global integration, but the benefits are distributed unequally said Bernard Hoekman of the World Bank at the recent launch of the Banks first Trade Strategy at Sida."
The Strategy aims at sharpening the Banks support to countries to focus more on the poverty impacts of trade and better build on comparative advantages of the Bank; like its financing capacity, wide-spread country presence and multi-sectorial capacity.
"Most trade happens within countries and between countries in the same region. Facilitation of internal trade is an explicit ambition in the strategy as well as regional integration, Hoekman pointed out."
Trade has experienced a boom in the last decade, driven by large reductions in trade barriers and technological changes that have lowered the costs of communications and transport. Many low-income countries have been less successful in using trade as a means of creating jobs, increasing per capita incomes, and diversifying their economies.
Anders Ahnlid, Ministry for Foreign Affairs, welcomed the new strategy and noted the recovery from the financial crisis and the large growth rates in many poor countries.
"Growth is central to reach the Millennium Development Goals, he said. We are talking about inclusive and sustainable growth benefitting poor people."
Poor households and communities in lagging regions continue to confront major challenges in dealing with external shocks, rising food costs and harnessing the opportunities offered by a more open world trading system.
"Many poor countries, especially in Africa need to diversify their product range and also develop the service sector to increase trade and become less vulnerable, said Hoekman."
The Trade Strategy will be implemented through region-specific work programs and activities. Three major instruments will be used; lending and technical assistance; knowledge and policy dialogue; and external partnerships and better coordination with development partners on trade.
Ricardo Melendez-Ortiz of the International Center for Trade and Sustainable Development (ICTSD) highlighted the need to take issues of sustainable development and climate change into stronger consideration.
"The need for natural resources is increasing but resources are limited, he said."
The role of trade for poverty reduction was also discussed and Torgny Holmgren, Ministry for Foreign Affairs highlighted the difficulty in relating poverty reduction to increased trade.
Hoekman noted that increased trade has clear linkages with growth and poverty reduction.
"Trade is cross sectorial. Strong linkages between for example trade and social protection are essential to make sure growth benefits the poor, he said. Practically, people in all sectors need to work closer together to make it happen."
Read the whole strategy Leveraging trade for development and inclusive growth : the World Bank Group trade strategy, 2011-2021
