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ECA and World Bank hold policy discussion on trade support

The Independent Evaluation Group (IEG) of the World Bank held a policy-debate with Economic Commission for Africa (ECA) on the World Bank report Assessing World Bank Support for Trade, 1987-2004. The discussion took place at ECA offices in Addis Ababa, Ethiopia on Monday 3 April 2006. Kyle Peters, IEG Senior Manager and Yvonne Tsikata, task manager for the report represented the IEG.

The director of ECA's Trade and Regional Integration Division, Hakim Ben Hammouda, welcomed the World Bank team to ECA and hailed the cooperation that exists between the two-institutions. He said although the institutions may have differing views on some economic development issues, there was mutual respect and cooperation between the two. He cited Economic Partnership Agreements and the World Trade Organization Doha Round negotiations as examples of on-going collaboration.

Kyle Peters introduced the report as seeking to answer two questions: I) was the World Bank's assistance relevant to improving the trade performance of recipient countries, and II) was the Bank effective and efficient in achieving its objectives.

Yvonne Tsikata said the report was the first, comprehensive evaluation of the World Bank's trade-related activities. She said trade currently formed the third most important corporate priority of the Bank and lending during the review period - 1987 to 2004 - was US$ 38 billion, spread over 117 countries and 509 projects.

Some of the key conclusions are that for trade reforms to succeed, strong local ownership of policies is essential; reform policies should be sequenced to minimize fiscal pressures; there should be high-quality analytical work on the overall state of the economy before implementing any reforms. The report also finds that the Bank underestimated the need for strong, economy-wide complementary policies in ensuring that trade reforms are successful. It also finds no correlation between the number of trade related conditionalities in Bank lending and performance outcomes, concluding that conditionalities were neither necessary nor sufficient.

There was a robust discussion on the importance of inter-African trade as separate from open-regionalism as advocated by the Bank; the limitations of the one-size-fits-all policy advice associated with the Bank; and perceptions that the Bank was trying to achieve trade reforms that go beyond agreements anticipated in the Doha Round negotiations. Hakim Ben Hammouda for ECA and Kyle Peters for IEG agreed that the discussions were mutually informative and pledged to continue collaboration to improve Africa's trade performance.

A copy of the report can be obtained at ww.worldbank.org/ieg