• back
  • 2004-4 ISSUES

  •  
  • ISSUE 4/2004

                                                                                                                                                      4-2004 

  •  
  • When the International Trade Centre (ITC) was created in 1964, developing countries were emerging slowly from an era of import substitution and trade was largely in the hands of the industrialized world. Developing and socialist countries (171 of them) had only 21% of the share of world trade, which totalled US$ 175 billion.

    Craft enterprises and artisans can today hope to improve their position in global trade, as a result of changes in product classification that can make their contribution to the economy more visible. Because of its network in developing countries and its position as a practical organization concerned with export trade, ITC was able to act as a facilitator in this initiative.

    Leather is one of the world's most widely traded commodities. The trade in leather and leather products - worth more than US$ 60 billion per year - is predicted to grow. The African leather sector is bursting with potential, but there is a wide gap between resources and production. ITC's development programme has galvanized the sector.

    Once termed a "sunset industry", jute now offers fashionable, eco-friendly products that are attracting new consumers - thanks to innovative applications in the automotive industry, fashion, furnishings and landscape management. ITC's role in jute product development and marketing has contributed to the turnaround, and has helped very poor families to improve their livelihoods and hopes for the future.

    In August 1998, a young, would-be businessman returned home to Ruritania from a year of language studies in Europe. "They've got everything they think they could ever want there," he told his doting parents. "But what they don't have is anything like our Ruritanian widgets. A huge market is ready and waiting. All we need to do is convert that little factory down the road to mass production for export and our fortune will be made!" His enthusiasm was infectious. They set up to expand the family firm, ordered state-of-the-art Ruritanian widget-making equipment and hired hundreds of workers. Within a year, more widgets came off the production line in a week than the old factory had turned out for the Ruritanian market in a year and the warehouse was full.

    Effective purchasing and supply chain management is critical to competitiveness and export performance. It accounts for some 60% to 70% of a company's costs. ITC's training initiative, Buying into Competitiveness, helps to meet firms' need to develop skills in this important area.

    In Bolivia, a group of enterprising companies survived the collapse of the rubber industry by harvesting and processing Brazil nuts. As the lead export of the Amazon region, these humble - but difficult - nuts may be the secret to saving the precious rainforest. ITC's assistance in addressing quality management issues has helped these exporters, as part of a project designed to boost Bolivian exports in ten industry sectors.

    The coffee market is oversupplied, with the price of coffee at its lowest in a century. Over the years, ITC has supported several projects and initiatives to help coffee producers. One of the most innovative projects was the world's first Internet coffee auction, the origin of what is today the Cup of Excellence® programme.

    More than 20,000 Chinese farming families have been lifted out of rural poverty in a remarkable economic success story that has seen Yunnan province in south-west China become one of the leading cut-flower centres in Asia.

    Competition means conflict, but the courts are rarely the best way to settle disputes in business. Trials can be expensive, lengthy and sometimes embarrassingly public. Hence the rise in arbitration and mediation centres. ITC sees that by operating as a catalyst and bridge-builder, it can help these centres to help each other.

    Successful exporting by small and medium-sized enterprises (SMEs) can be pivotal in bringing broader prosperity to developing countries, boosting economic vitality at community level and creating sustainable livelihoods for employees and their families. But while globalizing markets offer new opportunities for these small firms, a latticework world of complex regulations, standards and other trade barriers presents a series of formidable obstacles for companies seeking export markets. ITC's Trade Secrets guides provide information that helps these firms make the leap into international markets.

    Improving a country's export performance requires much more than just winning more foreign contracts. Over the past six years, many government officials and private business leaders in developing countries and transition economies have come to understand this - thanks to ITC's Executive Forum on National Export Strategies.

    With this collection of portraits, ITC brings a message of challenge, and of hope. The immense challenge is to bridge the gap between rich and poor. The hope is to build upon practices that work, in the area of trade development, and take action on a broader scale.In today's globalized world, new market opportunities abound. But competition is fiercer, so developing countries are asking ITC the same question they asked 40 years ago: "How can we export better?" In essence, these countries need both competitive exports and market access. Helping countries build their capacity to supply world markets is ITC's contribution to sustainable development, through trade.

    There's growing recognition that "services do matter" to developing countries. The global services sector is undergoing a revolution that enables small firms in these countries to compete in world markets. ITC, reacting to the explosive growth of trade opportunities, has upgraded its programme to equip exporters with all they need to tackle competitive international markets.

    Bancomext, the Mexican Bank for Foreign Trade, was the first ITC partner organization to produce a Spanish national version of the general guide for first-time exporters with financial support from several donors. It was also the first to produce related guides for specific export sectors.

    High-quality packaging is becoming a key to successful competition in the most lucrative developed markets. ITC is spreading both the message and the means for small and medium-sized enterprises (SMEs) worldwide to embrace better packaging. ITC's work in Sri Lanka since the early 1970s exemplifies a turnaround in a country's packaging industry.

    Viet Nam has risen in the last five years to become the world's top pepper exporter. ITC has accompanied Viet Nam during the process, helping it to upgrade quality and dramatically increase revenues for rural families, not least the women workers who underpin the industry. At the same time, the conscious emphasis on quality has allayed fears among other producers that low-priced, poor-quality pepper would drive international prices downwards.

    Businesses as different as luxury vacation resorts and spice-growing by peasant farmers can result in export-led poverty reduction. These two projects supported by ITC indicate how a trade-focused approach to sustainable development can increase revenues for poor communities, encourage collaboration at all levels and even maintain traditional culture.

    "Berimbau, Berimbau, Berimbau: It is a wire and a piece of wood," sing the women of the Sauípe region of the Brazilian state of Bahia. This local musical instrument, a key element of their culture, is also the symbol of hope for poor communities around Costa do Sauípe resort.

    Sheer, unforgettable magic. With house music setting a hypnotic pulse, psychedelic lighting injecting an edge and giant screens capturing the allure of the catwalk, a national fashion event that would not have been out of place in Paris, New York or Milan was held in Romania earlier this year. Stunning Romanian models were dressed to boost their country's garment exports - a crowning achievement that reflects its successful partnership with ITC during its transition years.

    When South Africa broke with apartheid, the country had to rethink its approach to business and trade. It selected ITC as the partner to help rebuild its trade strategy. Here is a portrait of an evolving strategy that helped South Africa fast-forward from isolation to integration in the global economy, boost incomes and become a magnet for investment.

    Providing relief supplies is big business. Donors and international aid agencies spend billions of dollars annually. The door to the aid market, traditionally considered complex and inaccessible, has been all but closed to countries in Africa, for example. ITC's programme, Buying for Africa from Africa, has contributed to changing this. As its success grows, other regions are following suit.

    In the early 1990s, the break-up of the Soviet Union launched landlocked Mongolia into a world without borders. Faced with a new economic order, Mongolia's nascent private sector and trade institutions needed to move quickly from free market theory to practice. ITC, a long-standing trade development partner, provided practical help and guidance.

    "For also knowledge itself", wrote English philosopher-statesman Francis Bacon in 1597, "is power."

    Turkey's export growth in recent years is an encouraging sign of its economic potential. It is looking to small firms to sustain this growth. To meet the needs of a multitude of new, mainly small and medium-sized export firms, Turkey's Export Promotion Centre came to ITC for help in revamping its services. Together, they have developed a new approach to training trade advisers for small firms, which is now being used in other countries.

    If developing countries are to benefit from the world trading system, their private and public sectors have to work together with their governments and negotiators to shape a common strategy. But achieving that cohesion is not so easy.