He is right. Few countries have what could be considered a
national export strategy. Fewer actually implement the strategy and
of those that do, very few have had a discernible impact on export
performance. So why does ITC continue to promote the idea that
developing countries should have a national export strategy?
Our answer is straightforward. When the resources available for
trade-related support are extremely limited, which is generally the
case in developing countries, steps must be taken to ensure that
these resources consistently target priorities. This is what
effective trade promotion is all about. A strategy provides the
necessary guidelines in terms of what resources are needed, for
what purposes, to be used by whom and how.
If there is no strategy
In the absence of strategy, priorities are not defined and the
issues, opportunities and constraints upon which resources should
focus are not determined. In the absence of strategy, there is no
shared vision between the public sector, which in developing
countries is the principal, if not exclusive, source of trade
support services and the private sector, the user of such services.
In the absence of strategy, there is no coordination among trade
support institutions. Without strategy, resources, both financial
and human, are expended, but not directed. And no developing
country can afford that.
The case for a developing country to have a national export
strategy is particularly strong given the role of the public sector
in export development and trade promotion. In developed countries,
a "market" for trade support services exists. Firms interested in
exporting can acquire the commercial information, purchase the
training and access the financing needed to "go international".
These services are available from the local marketplace. Not so in
most developing countries. While the need for such services is as
great, effective demand is not sufficient to generate a supply
response within the market. It is the public sector that must step
in to fill the void at least until such time as sufficient demand
for export support services has been created to lead to the
emergence of private sector service suppliers.
Make the strategy relevant and realistic
This leads us to the topic selected for debate at the 2001
Executive Forum: Is Your Trade Support Network Working? The first
challenge confronting the developing country strategy-maker is to
design a relevant and realistic strategy. The next challenge is to
ensure that it is effectively implemented. In Montreux last
September the Executive Forum participants looked at this second
challenge from two points of view: the enterprise manager's and the
national strategy-maker's. For a national export strategy to be
effective, the answer to the question, "Is my trade support network
working?", must be yes.
The enterprise manager is looking for information, advice and
probably financing that will lead to early and sustained success in
the international market place. If the national trade support
network can deliver these, at low cost, he's happy: the trade
support network is working. For the export strategy-maker, the
question is a bit more complex. Certainly the trade support network
is working if the enterprise manager is happy. But that is only
part of the answer. For the export strategy-maker must also be sure
that the network is responding to other client groups and issues.
The strategy-maker must ensure that the network is addressing the
longer-term issues of national competitiveness - promoting new
entrants into the export community, stimulating international
entrepreneurship, developing new export industries and increasing
national "value-addition".
Address longer-term issues
The strategy-maker must also be certain that the trade support
network is responding to the development dimension of national
export strategy, which includes export-led poverty reduction,
employment generation, and equitable regional development. The
strategy-maker must ensure that the network includes
decision-makers in other economic and social ministries and that
the export and international competitiveness objectives are fully
reflected in their plans and programmes. Only then can the
strategy-maker confidently declare that the trade support network
is working.
During the Montreux debate it became clear that while the
"border-in" issues of export capacity and competency development,
lower transaction costs and value-addition were recognized as
important, trade support networks and, indeed, decision-makers in
Departments of Trade continue to focus on the "border-out" issues
of market access and market promotion. Best practice suggests that
the national trade support network must focus on both.
Overcoming resource shortages
This is easy to say, but difficult to achieve. At the best of
times, the resources available to most trade support institutions
in the national network are barely adequate to meet a single focus,
let alone a dual border-in/border-out focus. Options were discussed
at length at last year's Executive Forum. Charging for services,
based on a sliding scale depending on the type of client, is one
possibility (the New Zealand approach). Providing cost-free
services to members who pay membership fees based on their size is
another (the Saskatchewan trade and export partnership). Generating
revenue from exhibition facilities is another (the Indian trade
promotion organization).
Irrespective of the source and level of income-generation, it
was agreed in Montreux that a national trade support network cannot
be expected to sustain itself on self-generated funds. Support
through the national budget is a prerequisite. Two variations to
this rule received particular attention. CORPEI is Ecuador's
private sector, non-profit trade promotion and investment
organization. Under the law creating it, CORPEI received a
repayable contribution to finance the organization and its
promotion effort, financed from levies on petroleum exports, other
exports and imports. The contribution has to be repaid in US
dollars after ten years at zero interest. To ensure repayment
CORPEI invested more than one-third of its income in a fixed-term
fund. Mexico's Bancomext finances all its trade support programmes
through income generated by its trade financing activities, an
accomplishment that raised the question why more countries don't
organize their national trade support organization along similar
lines.
Monitoring and evaluation
As one participant concluded, no size fits all, either in the
configuration of the national trade support network, the nature of
its services, or the way it is financed. However, it was agreed
that it is not possible to confirm the network is in fact working
towards the objectives of the enterprise manager and the national
strategy-maker without close monitoring and objective evaluation.
This is where additional work should be directed.
Brian Barclay is Coordinator of the ITC Executive Forum on
National Export Strategies. Contact: barclay@intracen.org