Aid for Trade and Its Role in Enhancing Resilience Towards Sustainable Development Goals

Aid for Trade (AfT) is an institutionalized initiative aimed at assisting developing economies and least developed countries (LDCs) in overcoming trade-related challenges. Between 2006 and 2022, AfT has mobilized a cumulative total of USD 648 billion in targeted funding. This report examines the role of AfT in fostering resilience amidst the ongoing global “polycrisis,” with a particular focus on its alignment with the Sustainable Development Goals (SDGs).

Pathways to Resilience Through Aid for Trade

AfT contributes to resilience by addressing key areas that align closely with multiple SDGs. Four primary pathways have been identified:

1. Enhancing Institutional Capacity
   • Strengthening governance and trade-related institutions
   • Improving policy frameworks to support sustainable economic growth (SDG 8: Decent Work and Economic Growth)
2. Strengthening Productive Capacity
   • Supporting industrial development and innovation (SDG 9: Industry, Innovation, and Infrastructure)
   • Promoting sustainable agriculture and manufacturing sectors
3. Fostering Digital Transformation
   • Encouraging digital infrastructure and technology adoption (SDG 9 and SDG 4: Quality Education)
   • Enhancing access to information and communication technologies to reduce inequalities (SDG 10: Reduced Inequalities)
4. Mobilizing Resources
   • Facilitating financial flows and investments to support trade development (SDG 17: Partnerships for the Goals)
   • Leveraging international cooperation for sustainable trade practices

Evidence of Impact and Recommendations

Various initiatives supported by AfT have demonstrated potential in promoting resilience at both macroeconomic and microeconomic levels. These initiatives contribute directly to achieving several SDGs by enabling sustainable economic growth, reducing inequalities, and fostering innovation and infrastructure development.

• Macro-level impacts include improved trade policies and enhanced institutional frameworks.
• Micro-level impacts involve capacity building for small and medium enterprises and digital inclusion.

However, the current AfT-supported initiatives remain scattered and limited in scale. To maximize their contribution to the SDGs and ensure sustainable impact, these efforts need to be:

• Replicated across different regions and sectors
• Scaled up through increased funding and international collaboration
• Integrated with broader development strategies to address systemic challenges

Conclusion

AfT plays a critical role in supporting developing countries and LDCs to overcome trade-related constraints while advancing the Sustainable Development Goals. By focusing on institutional capacity, productive capacity, digital transformation, and resource mobilization, AfT can enhance resilience in the face of global challenges. Strategic scaling and replication of successful initiatives are essential to achieving a wider and more sustainable impact aligned with the 2030 Agenda for Sustainable Development.

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1. Sustainable Development Goals (SDGs) Addressed or Connected

1. SDG 8: Decent Work and Economic Growth
   • The article discusses Aid for Trade (AfT) helping developing economies and least developed countries (LDCs) overcome trade-related constraints, which is directly linked to promoting sustained economic growth and productive employment.
2. SDG 9: Industry, Innovation and Infrastructure
   • Emphasis on strengthening productive capacity and fostering digital transformation aligns with building resilient infrastructure, promoting inclusive and sustainable industrialization, and fostering innovation.
3. SDG 17: Partnerships for the Goals
   • The mobilization of USD 648 billion in targeted funding and the institutionalized concept of Aid for Trade reflect global partnerships and cooperation to support developing countries.

2. Specific Targets Under Those SDGs

1. SDG 8 Targets
   • Target 8.2: Achieve higher levels of economic productivity through diversification, technological upgrading, and innovation.
   • Target 8.3: Promote development-oriented policies that support productive activities and decent job creation.
2. SDG 9 Targets
   • Target 9.1: Develop quality, reliable, sustainable, and resilient infrastructure to support economic development and human well-being.
   • Target 9.2: Promote inclusive and sustainable industrialization and, by 2030, significantly raise industry’s share of employment and GDP.
   • Target 9.c: Increase access to information and communications technology and strive to provide universal and affordable access to the Internet.
3. SDG 17 Targets
   • Target 17.3: Mobilize additional financial resources for developing countries from multiple sources.
   • Target 17.9: Enhance international support for implementing effective and targeted capacity-building in developing countries.

3. Indicators Mentioned or Implied to Measure Progress

1. Indicators Related to SDG 8
   • Growth rate of real GDP per employed person (8.1.1) – implied through economic productivity improvements.
   • Proportion of informal employment in non-agriculture employment (8.3.1) – implied through promotion of decent work and productive activities.
2. Indicators Related to SDG 9
   • Manufacturing value added as a proportion of GDP and per capita (9.2.1) – linked to strengthening productive capacity.
   • Proportion of population covered by a mobile network, by technology (9.c.1) – related to fostering digital transformation.
3. Indicators Related to SDG 17
   • Amount of United States dollars committed to public-private and civil society partnerships (17.17.1) – implied through mobilization of resources and partnerships.
   • Amount of financial support (USD) provided to developing countries (17.3.1) – directly linked to the USD 648 billion mobilized.

4. Table: SDGs, Targets and Indicators

Source: globalpolicyjournal.com