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  • THE ROLE OF THE PRIVATE SECTOR IN EXPORT STRATEGY DEVELOPMENT

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    The Role of the Private Sector in Export Strategy Development

     

     
     
    International Trade Forum - Issue 4/2009 

    A strong united voice from the private sector is vital to promote the importance of trade in national development plans.

    In recent years, there has been much greater awareness of the need to engage the private sector directly in policy dialogue, particularly in trade negotiations related to enhanced market access. This has been further accelerated by the global financial crisis, which has put a spotlight on the economic importance of strong enterprises and their contribution to socioeconomic well-being.

    ITC has found that while the role of partnerships, consultation and joint action is widely accepted, it continues to encounter diverse conditions and challenges in different countries, often due to historical, political or cultural variables. Through its work on export strategy development, ITC has witnessed:

    • Governments that have never engaged in systematic dialogue with the private sector
    • Governments that exclude the private sector from a previously healthy collaborative mechanism
    • Governments and the private sector are suspicious of each other's motives
    • A private sector that does not respond to its government's willingness to engage with and support the sector
    • A private sector that is sceptical of calls to dialogue that do not result in clear actions.

    The following are examples of a breakdown in effective dialogue:

    • Insufficient links between the business sector and the government in Romania, prior to the development of its National Export Strategy (NES), leading to a lack of synchronization, communication and cooperation between companies, institutions and the public sector.
    • A lack of effective information sharing and networking between the public and private sectors in Dominica reducing the potential benefit of combined capacity.

    Since its inception, ITC's work in national, sectoral and regional export strategy design and management has been based on the premise that export development and competitiveness are a function of a sound and enduring relationship between the public and private sectors. This is particularly important since ITC does not, in fact, develop export strategies. Rather, it facilitates a process and builds capacity in partner countries to enable them to design and implement a homegrown export strategy.

    An export strategy must be relevant, responding to the constraints and opportunities that affect export performance. Who better than the private sector to talk about the challenges of market entry; to define the support services businesses need; to advise where and how the cost of doing business should be reduced; to explain the need to improve market conditions; to identify value-added and diversified opportunities?

    Securing private sector participation must be one of the first tasks in developing an export strategy. Such a strategy is built through a collaborative process among the public and private sector representatives who form the national strategy team to forge a consensus on needs and priorities. Government takes the lead in setting sectoral priorities while the private sector sets priorities within sectors. This equates to a combined top-down, bottom-up approach - ensuring there is private sector leadership and public sector support where it is needed.

    ITC advocates the formalization of public-private dialogue platforms through the establishment of National Export Councils (or their equivalent), which have legal recognition and authority. This provides for continuity and mainstreaming of the voice of the private sector.
    The result is a collaborative environment with strengthened public-private dialogue that focuses on export development enabling the country to manage the implementation, monitoring and updating of the export strategy.

    The role of the private sector does not stop at the strategy design phase; it becomes even more important in the transition to implementation.

    It is only through implementation that impact is achieved and can be measured. The private sector must take the lead in implementing a significant part of the export strategy. Private sector organizations, such as chambers of commerce or business associations, play a crucial role in improving the range and quality of business support services to enterprises, as well as marketing the country and its industries. Producers invest in improving or diversifying supply capacities, and businesses invest in improving logistics services. Private sector investment is increasingly important in the development of export-enabling infrastructure.

    In its Aid for Trade Work Programme 2010-2011, the WTO's Committee on Trade and Development notes that: "The development of national and regional trade integration and export strategies provides the opportunity for a structured dialogue between the public and private sector around an agreed set of objectives. Such dialogues also allow for the active engagement of the private sector in implementation and monitoring and evaluation of Aid for Trade. Work to develop such strategies should be promoted."

    During the past seven years, ITC has facilitated and nurtured private sector participation through its export strategy work in more than 40 countries.