Research note: Covid-19 support to businesses risks leaving behind companies in developing countries

Most governments in the world have announced, and are implementing, programmes to respond both to the health and economic consequences of Covid-19. However, the magnitude of responses to Covid-19 (including health responses and economic stimulus packages) by governments has varied considerably, from nothing to about half of GDP.[1]

A simple linear regression between the level of support and some possible explanatory factors – the forecast level of impact of Covid-19 on the economy, GDP per capita, and the level of government debt before the crisis – shows that not the severity of the anticipated economic impact Covid-19 but GDP per capita is the most important of these three factors (for more details see below).

Angola export diversification study

Angola’s economy is characterised by an extremely high dependency on two exports: oil (95% of total exports) and diamonds (3-4% of total exports). Not only is this unsustainable - oil reserves are expected to be depleted in the medium term, and extraction generates few jobs - but it also means that the country is extremely vulnerable to oil price shocks. Export diversification is therefore imperative and urgent. Periodic increases in the world oil price (as happening presently) or postponements of graduation from least developed country status are no excuses for inertia!

External Evaluation of the European Union’s Policy Coherence for Development

This evaluation provides an independent assessment of the EU Policy Coherence for Development (PCD) actions, in terms of policymaking and awareness-raising mechanism, being implemented over the 2009-2016 period. It therefore aims to improve the impact of relevant EU policies by lookign at the PCD tools and mechanisms, outputs of PCD process, as well as overall PCD outcomes and impact achieved in a number of selected case studies. The evaluation also judges the EU's capacity to improve the impact of its intervention through of policy coherence instruments.

Download the final report.

More information on the evaluation is available from the European Commission website.

Innovative Financing for Development - Options for the EU

Especially since the last economic crisis of 2008 discussions about innovative financing for development have gathered pace. In the 2011 Agenda for Change, the European Commission recognises that government and donor funds are largely insufficient to cover the substantial investments required to improve living conditions in developing and transition countries. This paper analyses key initiatives influencing the current reasoning behind financing of EU external aid measures, and presents options to pursue innovative financing for development by the EU.

Overcoming Low Preference Utilization in Preferential Trade Agreements: Presumption of Origin for Small Shipments

While rules of origin (ROOs) constitute an essential element of preferential trade agreements (PTAs), recent analysis of the utilization of preferences shows that even with liberal ROOs, utilization of preferences is often low, especially by smaller exporters. This reflects the high fixed cost component of demonstrating compliance with ROOs. In order to develop options for increasing the rate of preference utilization – especially by smaller exporters that might benefit most in terms of knowledge spillovers from entering into trade – we first examine different ROOs-related explanations of low preference utilization, in particular those based on exporters’ cost-benefit calculations in relation to compliance with ROOs. Second, we analyze the implications of low preference utilization rates for competition and welfare, which we argue are negative.

What can LDCs acceding to the WTO learn from other acceded countries?

When the World Trade Organization (WTO) was established in 1995, it had less than 130 members. Since then membership has expanded to 159 as a result of 31 completed accessions. Of these, only six were least developed countries (LDCs). Another 24 countries are currently at various stages of the accession process; among these, nine are LDCs. Thus, although it can be argued that the WTO is approaching universal membership, quite a bit remains to be done in terms of LDC accessions.

The purpose of this paper is to provide lessons for countries currently in the process of accession to the WTO, notably LDCs, based on the established practice and experience of other acceded countries. The paper does so by, first, providing a summary overview of WTO accessions and terms of accession of all countries that have acceded to the WTO under Article XII. It also considers recent changes in the WTO accession regime for LDCs, notably the enhanced Guidelines for WTO accession, and draws conclusions from these for the approach of LDCs to WTO accession.