Economic diversification and empowerment are essential for achieving the Sustainable Development Goals. Both objectives also embody the rationale behind the Aid for Trade Initiative. Economic diversification offers a pathway for empowerment, while empowement allows women, youth and micro, small and medium sized enterprises to engage in trade. Growth in agriculture, manufacture and services offers entrepreneurial opportunities and generates productive jobs. In turn, this economic diversification contributes to rising incomes and human development more generally. We have seen this pattern of progress in many developing countries bringing substantive reductions in extreme poverty.However, the pace of economic diversification is uneven and the pattern evolving, while some economies face inherent challenges. This is especially true for small, island, landlocked or resource dependent countries and those that are affected by fragility and conflict. At the same time, rapid technological progress threatens to disrupt established pathways for economic development, but also offers new growth and development opportunities. Elevated environmental risks require new approaches to economic diversification.International trade can help. An open, rules based trading system contributes to global welfare. It helps diffuse goods and services, and also the technology and knowledge to manage environmental challenges. But turning trade opportunities into trade flows, requires us to redouble our efforts to tackle the numerous supply side constraints that many developing countries are still facing, particularly the least-developed countries.
AID FOR TRADE FACTS AND FIGURES
Export diversificationSource: WTO Database Progress in economic and export diversification is not uniform nor universal. According to the OECD-WTO Monitoring and Evaluation Exercise 2019, 53 per cent of developing countries reported progress in economic diversification since the launch of the Aid for Trade initiative in 2006 -66 per cent for LDCs. Services is the sector with the second-most progress after agriculture, as reported by 33 per cent of developing countries.