© International Trade Centre, International Trade Forum
- Issue 2/2004
For producers in poor countries, tapping into international
business can bring access to wider and wealthier markets.
Trade does provide benefits, but they may not "trickle down"
automatically to the poorest people. It's important to find
solutions to fill the gaps between trade-related economic growth
and poverty reduction.
A business-driven approach
ITC's Export-led Poverty Reduction Programme takes a
complementary approach to "macro" poverty reduction strategies by
targeting poor communities directly and striving for a "bottom-up"
effect. Its pilot projects focus on products and services that can
benefit from short-term, high-impact export promotion
activities.
Some examples of the programme's projects include:
- Gourmet coffee in El Salvador. In
November 2002, ITC launched a project in the Cordillera de Apaneca,
in south-western El Salvador, to improve living conditions for
about 400 poor coffee-growing families. It started by identifying
Japan as a target export market for the high-quality coffee they
grew. In 2003, despite the general downward trend in coffee prices,
the farmers delivered almost a tonne of gourmet coffee to Japan at
premium prices. The coffee, sold as "Café Monte Sion", has received
environmental and social certification from the Rainforest
Alliance. It is also a member of the Association of Sustainable
Coffees of El Salvador. The project has had valuable spillover
effects, as the national authorities have improved road access in
the area; built a primary school for the community; and assigned a
teacher.
- Silk products in Cambodia. The silk
weavers of Takeo Province in Cambodia make beautiful products such
as scarves, handbags and cushion covers. However, these rural
producers - mainly women - did not realize how valuable their
products are nor how to enhance them with more marketable designs
or higher-quality dyes. Lack of knowledge about market access
conditions also left them dependent on middlemen. In July 2003, the
Cambodian Craft Corporation and ITC helped restructure the work of
about 40 families. A consultant is providing training and advice
to:
- form production groups;
- improve production techniques;
- develop and adapt products to consumer tastes;
- understand costing and pricing;
- find markets; and
- coordinate with other Cambodian crafts associations.
There is already growing interest from overseas buyers. A
European buyer recently organized a trade visit to build relations
with the silk weavers. They have also been invited - free of cost -
to a Japanese trade fair in June 2004, where they will present a
new collection of silk products.
The aim is for 100 families to benefit eventually from the
knowledge and structures in place and be able to respond
effectively to market demand. ITC and the Cambodian Craft
Corporation will also repeat the experience in communities of
silversmiths and potters.
- Community-based tourism in Brazil.
Tourism is flourishing in Brazil, especially in the state of Bahia.
In October 2003, ITC launched a project to create jobs and improve
the livelihoods of the 10,000 people who live in the area
surrounding Bahia's Costa do Sauípe tourism resort. It is helping
poor producers in the area integrate into the value chains
generated by tourism, under the Costa do Sauípe Social Sustainable
Programme - also known as Programa Berimbau, after a Brazilian
musical instrument - that the resort launched. The resort includes
hotel operators such as Marriott, Renaissance, Sofitel and
SuperClubs Breezes.
The growth of tourism has spurred the development of family
agriculture, artisanal products and services that can be offered at
the resort. The pilot project will establish:
- an organic waste recycling unit connected to the agricultural
productive chain;
- production of organic fruits and vegetables;
- a commercial warehouse and other logistical support for
agricultural production; and
- a community centre with facilities for the development of
artisanal products, training and the formation of cultural
groups.
Building a network
ITC launched its Export-led Poverty Reduction Programme in July
2002, building on decades of experience in trade development in
developing countries and economies in transition. The programme has
attracted the interest of bilateral and international organizations
such as the European Union, World Bank, International Labour
Organization and World Wide Fund for Nature, as well as business
and non-governmental organizations with an interest in sustainable
development and trade. The latter include Carrefour, Max Havelaar,
Walmart, Twin and the Centre for Applied Studies in International
Negotiations.
Linking trade and poverty reduction
ITC is working to improve living standards for poor communities
by promoting trade as a "fast track" to development with
policy-makers, focusing on high-impact sectors and making links
between poor producers and export networks.
- Integrate trade in development
policy. Policy-makers do not often have experience in
"mainstreaming" trade in their development strategies. ITC's
strength is in raising awareness - showing that trade does generate
new jobs in communities - and then, once policy-makers are
convinced, in following up with training and information. ITC works
through the Integrated Framework (a programme of six development
agencies to coordinate technical assistance in the least developed
countries) to encourage, for example, the inclusion of a trade
dimension in national development strategies such as Poverty
Reduction Strategy Papers.
- Develop trade in sectors with potential for
impact. Many developing countries, and especially
least developed countries, have a comparative trade advantage in
natural resource and labour-intensive sectors. ITC provides
technical assistance to help these sectors increase their exports,
create jobs and raise incomes. Sectors in which poor communities
usually predominate include agriculture, textiles and clothing,
animal hides, leather and leather goods, light manufacturing and
community-based tourism (i.e., poor communities in tourist areas
selling products and services to foreign visitors).
- Link up the poorest producers with higher-value
export chains. When it comes to doing business, poor
people can suffer the disadvantages of little or no education or
connections to those who can help them expand their business in the
formal economy. ITC's Export-led Poverty Reduction Programme links
up poor communities with the export chains of products and services
they can supply. It works with the communities to help them
organize themselves locally or regionally to receive business
training and assistance. ITC also builds awareness of their
business development needs with trade support institutions.
Finally, it links poor producers with established exporters.
ITC at UNCTAD XI
- High-level Round Table on Trade and Poverty - 14
June. During this session in São Paolo, ITC will
highlight its activities to reduce poverty through trade, with
experiences from its Export-led Poverty Reduction Programme.
Hendrik Roelofsen is Director of ITC's Division of Technical
Cooperation Coordination. For more information on these and other
projects, visit ITC's Export-led Poverty Reduction Programme web
site at http://www.intracen.org/eprp or contact Jaime
Crespo-Blanco, Programme Coordinator, at crespo@intracen.org