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    A New Generation of LDC Exporters Emerges

     

     
     
    © International Trade Centre, International Trade Forum - Issue 1/2001 

    How can successful exporters in least-developed countries (LDCs) convert export opportunities into business? New export opportunities and trade liberalization measures have helped some LDC exporters become a success, noted 75 LDC exporters and senior policy-makers, in a Business Sector Round Table organized by ITC (Brussels, 16 May 2001).

    The round table aimed to encourage participants to share personal experiences and challenges they met as exporters in a globalized economy. To make these successes more the rule rather than the exception, the public and private sectors in these countries need to cooperate more closely, they said, to improve the environment for entrepreneurs to emerge and export.

    New exporters 

    "What we found is that behind the obvious, somewhat old story - namely, the loss of LDC market share in world trade resulting from the price collapse of raw commodities - there is a new, more hopeful and more exciting grass-roots story," J. Denis Bélisle, ITC's Executive Director, reported afterwards to the conference. "This is the story of a new generation of LDC entrepreneurs and investors that are finding ways to leverage the opportunities created by global trade liberalization to start rebuilding their countries' export base.

    Lesson 1: "Think different" 

    "We learned three lessons. The first lesson is that new export opportunities, for the most part, have little to do with those of the past. The opportunities are about finding niche products for niche markets; moving up the value chain through processing and design; responding to the ever-rising demand from consumers for higher quality standards; entering brand-new markets like services; or shortening the distribution chain to capture a greater share of the value. Exporters presented examples of high-end stationery paper made from natural fibre in Nepal for the European market; paprika powder from Zambia for the North American market; hot-sauce exports from Malawi to India and Europe; essential oils from Haiti for the growing cosmetics industry; garments from Mozambique for the South African market; fresh cut flowers from Ethiopia for the German and French markets; frozen seafood from Cambodia for Australia, Japan or the European Union; tourism services from the United Republic of Tanzania or Bhutan; and Internet video streaming software technology from Nepal for North American customers.

    Lesson 2: Take advantage of liberalization 

    "The second lesson is that trade liberalization efforts of the past decade helped in opening up many of those new opportunities. On the other hand, LDC exporters, at times, also continue to see their efforts frustrated by certain barriers in importing countries. Work must continue on lowering barriers, especially those significant to LDC exports. But on balance, LDC exporters are telling us that opportunities have improved.

    Lesson 3: Government-business partnerships 

    "The third lesson from the exporters - confirmed by public officials with us at the Business Sector Round Table - is that there is a lot that government and business together can and must do, in their countries, to improve the environment for many other entrepreneurs to emerge and grow.

    "To sum up some of the points made by exporters: countries have made great strides in improving the macro environment for business. To be sure, more remains to be done, often including efforts on the legal and good governance front. Enforcement of the rule of law, including enforcement of contracts and elimination of corruption, often remain problem areas for business.

    Technical assistance to build competitiveness 

    "Exporters also tell us that much needs to be done to improve the support infrastructure for exports. This includes not only the obvious hard infrastructure of roads, airports, seaports, energy, water and telecommunications, but also the support services that are keys to improving competitiveness of xport enterprises: trade financing services, quality management services, trade facilitation (including customs inspections and customs clearance), trade information and so on. Here exporters are clear: countries do require technical advice and assistance for national capacity building.

    Focus on priorities 

    "Another important point made by exporters is that, next to working on improving the enabling environment, governments need to focus efforts and resources on a limited number of priority sectors, to make the export development drive successful.

    "Last, the exporters are sharing with us another very hopeful message: work on the export front can help alleviate poverty by bringing income and jobs directly to the poorest in their society. We have heard about specific examples, such as the 30,000 contract farmers producing paprika in Zambia, the hundreds of carpet and pashmina weavers in Nepal, the 27,000 families growing vetiver (an essential oil) in Haiti and so on.

    "We at ITC stand ready to help - so that the exceptional export success stories that we learned about this week become more the rule than the exception."

    The Business Sector Round Table at the Third United Nations Conference on Least Developed Countries, LDC III, was organized by ITC with financial support from the Government of Norway, and additional assistance from UNCTAD and the Institute of Leadership Development. For more information, visit the round table's web site at http://www.intracen.org/bsrt or contact Ashish Shah, ITC Senior Trade Promotion Officer, at shah@intracen.org