Fund will allow IDB to channel resources through other regional institutions

The Inter-American Development Bank (IDB) announced the creation of a new Aid for Trade Strategic Thematic Fund to help the public and private sectors in Latin American and the Caribbean to integrate into the global economy.

The fund seeks to help countries benefit from liberalized trade and increased market access by channeling grant resources to overcome these supply-side constraints. IDB President Luis Alberto Moreno announced the creation of the fund, and the UK’s commitment to provide a substantial contribution, during the Executive Board of Directors meeting on November 19.

Other countries have expressed interest in contributing to the fund, which is the first of its kind to be created by a multilateral organization. The Asian Development Bank and the African Development Bank are considering similar initiatives modelled after the IDB’s.

Significant supply-side challenges exist across most LAC countries and regions, which need to be addressed if countries are to play an active role in the global trading system and to use trade as an instrument for growth and poverty alleviation. However, the LAC region is currently not receiving a significant proportion of trade-related Official Development Assistance (ODA) when compared with other regions such as Asia or Africa.

The proposed Fund aims to provide an operational framework to implement global priorities in the region, providing donors an opportunity to meet standing commitments with increased development effectiveness.

Specifically, the Fund will support activities falling within the following four main areas: Trade policy, negotiation and

The Fund will also allow the IDB to channel resources into the region through other regional institutions, thereby facilitating coordination, and specialization.

The Fund is a multidonor trust fund, created as a Strategic Thematic Fund (STF) under the “New Framework for Technical Cooperation”.