A leaked copy of the evaluation of the Integrated Framework for trade-related capacity building for Least Developed Countries (LDCs) should lead observers to question the World Bank’s chief role in the initiative. The 228 page evaluation was rushed to completion in time for the WTO Ministerial in Cancun, made evident by the presence of duplicate pages and numerous orthographical errors. From the terms of reference to the selection of the evaluators, and from the work plan to the final report, the process has been notable for its lack of transparency.

Canadian consultants, Capra International, rightfully emphasise the complexity of the task which was given them in a very limited time period. They concede however that civil society input into the survey which informs the evaluation was “low”. How critical survey input is may also be at question, with 57% of respondents identifying themselves as current or potential beneficiaries of the IF process.

Bank-led diagnostic studies: “‘doing it for them’ instead of ‘doing it with them'”

The perception of LDC respondents was that the World Bank, as lead agency in the diagnostic studies, “is not only leading the process but has ownership of the process as well”. “Agency, donor representatives and external consultants tend to deliver the goods rather than mentor and assist the IF Focal Point and coach local consultants to do the work.” This rush to execute a finished product rather than to build capacity is linked both to time pressures and to the criteria for the selection of trade consultants which “do not adequately consider practical experience and local or traditional knowledge as being as important as academic or professional qualifications.”

Making this phenomenon more worrying, is the narrow ideological prism through which the Bank-led teams view their task. The review claims that there “remains a tendency to assume a direct cause and effect link between trade and poverty reduction”. The Bank’s devotion to the notion of comparative advantage is illustrated by a “focus on priority sectors as key to export growth with little attention to support and development” of exporters themselves. Action plans are “difficult to use as input to PRSPs and as a basis for approaching potential donors”. The review recommends full LDC participation in the definition of the terms of reference for the diagnostic studies and an overhaul of selection criteria placing more emphasis on local knowledge.

Problems linking to the PRSP

The evaluators point to two problems in linking the recommendation of the diagnostic studies to the PRSP: timing and obstacles due to budgetary processes being linked to existing PRSPs. One recommendation is to integrate DTIS results into PRSPs during Annual Reviews. The risk of inserting recommendations which are inconsistent with the larger goals of national poverty reduction strategies is left unaddressed.

Management of the IF

The review praises the IF Working Group and Secretariat for most of the progress made to date. However, the Working Group, 10 of whose 12 members are drawn from agencies or donors, comes in for criticism for being “cumbersome” and “slow in decision-making”. A recommendation is made to streamline the group to 7 members – a chair plus 2 members from each of the agencies, donors and LDCs. This recommendation goes some way to redressing the fundamental lack of representation of LDCs on the Working Group. Not questioned is why the OECD has been granted observer status in the group while developing country thinktanks, such as The South Centre, have not. Decision-making is also criticised for being highly centralised: “inter-agency meetings at the country level are negligible”. This would help to explain why there is a “lack of understanding about the scope and coverage of the IF“.

The country selection process is slated for “not being transparent, fair and predictable”. Seven out of ten LDC respondents were not aware of the IF country selection criteria.

The carrot of the IF

Trade commentators had feared that the US would use its support for the IF to put pressure on LDCs in negotiations at Cancun. In November, Deputy US Trade Representative Peter Allgeier confirmed these suspicions, demanding that “any assistance in the trade area from [the World Bank and IMF] should be related to policy changes in the form of trade liberalization.”

Copies of the leaked report available on request from the Bretton Woods Project.