WTO’s $648 billion funding helps integrate developing economies into global trade

BRUSSELS : The World Trade Organization’s (WTO) Aid for Trade initiative has contributed $648 billion in funding since 2006 to strengthen the export potential of developing economies and least-developed countries (LDCs). This initiative has contributed to the improvement of these economies’ capacity to trade, according to the latest ‘Aid for Trade at a Glance 2024′ WTO-OECD report.

Disbursements and commitments surge

Aid for Trade disbursements and commitments surged in 2022, surpassing pre-pandemic levels. The WTO’s disbursements reached an all-time high of $51.1 billion, a 14 percent annual increase in real terms. In addition, commitments increased by 31 percent to reach a peak of $65 billion.

Over 55 percent of the Aid for Trade initiative’s funding comes from bilateral donors who are also member states in the OECD Development Assistance Committee. Multilateral donors like the World Bank and the Asian Development Bank also support the initiative with additional funding.

In 2022, the top donors included Japan, which contributed $11.1 billion or about one-fifth of total Aid for Trade disbursements. Following closely came the World Bank with $7.9 billion and E.U. institutions with $6.8 billion.

Africa and Asia receive most of the funding

Africa and Asia are the main geographical destinations that receive Aid for Trade funding, accounting for 70 percent of total flows.

By income level, lower-middle-income economies are the main recipients of Aid for Trade funding, receiving $19.8 billion or 38 percent of total disbursement. Then come least-developed countries and other low-income economies, which received $14.1 billion or 28 percent of funding in 2022.

Since 2006, least-developed countries have received a total of $189 billion in Aid for Trade.

Transport and storage projects attract most funding

Aid for Trade projects include three main types:

• Economic infrastructure: 54.6 percent of funding in 2022
• Productive capacity building: 43.6 percent of funding in 2022
• Trade policy and regulations: 1.8 percent of funding in 2022

Within these three categories, transport and storage attracted the highest share of funding at 27 percent, followed by energy generation and supply at 23 percent, agriculture at 18 percent, and banking and financial services at 12 percent.