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Background Note
Current Situation on the Integrated Framework
2. The IF has been evaluated by an independent team of consultants under the aegis of the World Bank (note 1). The conclusions of this evaluation were that many of the IF objectives had not been achieved. Three options were offered: (a) to complete it and wind it down recognising its limited success; (b) to expand it to other developing countries - an implausible alternative given the first option; (c) to improve it.
3. The heads of the six core agencies participating in the IF met in New York on 6 July 2000 to study this independent evaluation (note 2). The Director General of the WTO presented a report on this meeting to the General Council session of 17 and 19 July.
4. Although no specific decision has been taken on how to proceed, the statement by the six core agencies issued after the New York meeting made clear the need to strengthen the IF and to improve its functioning. The guidelines proposed for restructuring followed from the independent review and can be summarised as follows:
(i) To assimilate trade policy, trade-related technical assistance and capacity building to the national development and poverty reduction strategies of LDCs. This so-called "mainstreaming" approach would be led and coordinated by the World Bank through the Poverty Reduction Strategy Papers (PRSPs) (note 3) with the participation of the LDCs, donors and the core agencies. Based on the needs assessment already conducted for most of the LDCs under the IF, mainstreaming would take place through the formulation of country-specific strategies which would be taken into account by the World Bank Consultative Groups (CGs) and the UNDP Round Table meetings (RTs).
(ii) To ensure transparency, the Inter-Agency Working Group (IAWG) would report to a Steering Committee representing LDCs, donors and the six core agencies. The Steering Committee will ensure proper oversight, policy guidance, adequate funding and ownership of those participating in the programme. The Steering Committee structure and operating procedures are to be agreed by the six core agencies in consultation with the LDCs and donors by 31 October 2000. The WTO Secretariat will continue to chair the IAWG (whose precise terms of reference will also be agreed by the six core agencies by 31 October 2000) and will absorb the Administrative Unit of the IF currently housed at the ITC.
(iii) To set up an Integrated Framework Trust Fund (IFTF) of US$20 million for the period 2001-2003 to be administered by UNDP and financed by voluntary contributions from donors. The IFTF will not be utilised to increase the trade-related technical assistance budget of the six core agencies, but be used to finance the mainstreaming of trade and trade-related technical assistance into the LDCs development strategies. In particular, it will finance the preparation of trade capacity-building projects, regional projects outside the scope of the CGs or RTs and limited and urgent activities where no PRSP has been prepared nor CGs or RTs are foreseen.
(iv) The six agencies agreed to support and contribute to the Third United Nations Conference for Least-Developed Countries to be held in Brussels in May 2001.
(v) The enlargement of the IF to other developing countries would be reconsidered in two years, following the improvement in its functioning.
5. It is worth mentioning that during the WTO's General Council meeting of 17 – 19 July when the Director General made a report on the heads of agencies’ meeting in New York, reactions from WTO Members to the proposals to improve the functioning of the IF were varied. From the discussion two types of comments can be identified: on the one hand, the industrialised countries and donors appeared "surprised" by the idea that the heads of the six core agencies had "agreed" to seek donor support to the tune of US$20 million for the IFTF without having consulted donors first. However, most donor countries agreed with the proposed reforms, including the establishment of the IFTF, provided they could adequately oversee its utilisation. The LDCs, on the other hand, expressed dissatisfaction about the clear lack of progress of the IF. In general, however, they supported the reform process, albeit in somewhat sceptical terms regarding the future of the programme and expressed the hope that concrete results would be achieved. The future of the IF is still in the balance and the next few months will be pivotal, especially after the summer recess.
Note 1 : Review of the Integrated Framework for Technical Assistance for Trade Development of Least Developed Countries, 6 June 2000 (WT/LDC/SWG/IF/1). (return to text)
Note 2 : The English version of the final declaration of this meeting is available in the WTO website: http://www.wto.org/english/news_e/news00_e/ifstat_e.htm. Under the WTO this document is classified as WT/LDC/SWG/IF/2. (return to text)
Note 3 : The PRSPs are the core of a new anti-poverty framework announced late in 1999 by the World Bank and the IMF. They are intended to ensure that debt relief provided under the enhanced Highly Indebted Poor Countries (HIPC) Initiative, and concessional loans from the international financial institutions, help to reduce poverty in the poorest, most indebted developing countries. (return to text)
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