In through the back door: capacity building or concession taking?

28 January 2004

The Bretton Woods Project is continuing to track the Integrated Framework for trade-related technical assistance (IF). Information about the first stage of the IF process – the diagnostic study – has been slow to emerge. This despite repeated calls for improved transparency in order to facilitate greater civil society participation. The World Bank is the lead agency on the diagnostic studies in almost all countries.

Some of the recommendations made in the studies touch upon sensitive areas in development policy such as the privatisation of state-owned enterprises, tariff rates and investment and competition policy. The extent to which these recommendations will be ‘mainstreamed’ into PRSPs and the degree of scrutiny they will receive is uncertain.

NGOs participating in the prepatory process for the UNCTAD XI conference in Brazil in June have been stressing the need for defence of developing countries’ policy space. According to the African NGO SEATINI, the “conditionality policies of multilateral lending institutions and the consequent loss of policy flexibility and autonomy have been a major source of economic, social and political instability in many developing countries.” From the recommendations made in the IF, it appears that observers will need to pay more attention to the role of capacity building initiatives in addition to more explicit conditionalities.

Selected recommendations from IF diagnostic studies


  • Review mining code
  • Adapt competition policy
  • Privatisation of Air Madagascar, Tele Mad, Ivato Airport, main port and cotton parastatal
  • Lower tariff barriers (lower maximum rate from 20 to 10%)


  • Review land tenure legislation to “speed up granting of land titles”
  • Review investment code
  • Lower import/export taxes, eliminate tariffs on capital and intermediate goods
  • Further reduction of protection of rice sector


  • Formal compliance with TRIPS
  • Move to reduced tariff bands on effective protection
  • Ease labour market ‘rigidities’
  • Open up business support services to foreign investment
  • Promote large-scale contract farming


  • Eliminate cross-subsidies in water
  • Phase out investment code
  • Privatise railroad, groundnut and textile marketing boards
  • Land reform to provide access to export producers
  • Labour – allow piecework remuneration, involve industry in design of educational reforms

The project is interested in collaborations with civil society organisations who would be able to assist in monitoring the IF process in-country. Please contact Jeff Powell.