Today European Commissioner Neven Mimica is in Geneva at the World Trade Organisation to participate in the Aid For Trade Global Review. This year's Global Review by the World Trade Organisation is dedicated to the theme of "Promoting Trade, Inclusiveness and Connectivity for Sustainable Development".
It will provide an opportunity for stakeholders to look at how Aid for Trade can contribute to the integration of developing countries and least developed countries into the multilateral trading system, and to the achievement of the 2030 Agenda for Sustainable Development.
In his keynote address Commissioner Mimica will speak about how to finance the implementation of the Sustainable Development Goals, highlighting that inclusiveness and sustainability should be more than ever at the heart of our action in favour of investment and trade. The EU and its Member States annual contribution to aid for trade exceeds €13 billion.
Commissioner Mimica said: "Trade has helped to lift hundreds of millions of people out of poverty worldwide, but the benefits of growth have not been felt equally across countries and regions. We need to more effectively link our different means of implementation – including Official Development Assistance, domestic policies in favour of inclusive and sustainable trade, as well as investment policies. The European Union, together with its Member States is the largest provider of Aid for Trade worldwide, and today's new contribution of €10 million shows that we continue to spearhead to achieve sustainable development and eradicate poverty."
At the same time, the EU approach to development assistance is evolving: this is crystallised in the New Consensus for Development, signed in June 2017. While traditional development assistance (in the form of grants) remains essential, it must be complemented with other tools and sources of finance to target the right catalysts – including women, youth, digital – and leverage private investment for development.
The EU’s ambitious External Investment Plan will therefore encourage investment in our partner countries in Africa and the EU Neighbourhood region. It will promote inclusive growth, job creation and sustainable development and so tackle some of the root causes of irregular migration. The External Investment Plan is adapted to the specific needs of partner countries and builds on the very successful model used within the EU, where the ‘Juncker Plan’ has already triggered €209 billion of investment. The External Investment Plan will crowd in private investors, where viable business proposals meet social needs, and where limited public funds can attract private money. Take the example of female entrepreneurs: banks are often reluctant to lend to them, even if their ideas and business plans are solid. We can help them to start and grow their businesses by providing a guarantee to banks to lend to these entrepreneurs, as well as through technical assistance to the women entrepreneurs, such as advice and mentoring.
The Plan will work in three pillars to encourage private investors to contribute to sustainable development in countries outside of Europe.
1) The newly created European Fund for Sustainable Development (EFSD) will be the financing mechanism used to support investments by public financial institutions and the private sector. With a contribution of €4.1 billion from the European Commission, the External Investment Plan is expected to leverage more than €44 billion of investments by 2020. To enhance the firepower and the efficiency of the new Fund, the Commission wants EU Member States and other partners to contribute.
2) Technical assistance and help beneficiaries to develop financially attractive and mature projects – thus helping to mobilise more investments.
3) Policy dialogue to improve the investment climate and business environment in our partner countries.
In the side-lines of this event, Commissioner Mimica announced a contribution of €10 million to support Least Developed Countries (LDCs) in realising their trade potential and reduce poverty by building inclusive sustainable development and economic growth.