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© Still Pictures/ R. Giling |
South–South Trade
Reducing intra-regional barriers Recent research by the Organisation for Economic Co-operation and Development shows that the potential benefit from freer South–South trade may indeed be at least as large as the gains that developing countries can obtain from better access to rich countries’ markets (North–South trade). Intra-regional trade agreements in Latin America and the Caribbean, such as MERCOSUR or CARICOM, are fostering trade between neighbouring countries. For example, over the last 30 years, internal trade in the Andean common market grew five times faster than trade with outside partners. (Source: Oxfam)
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CSR: A Stepping Stone in Regional Markets
By Seteng Motalaote, CEO, Wave Sanitation Services, Botswana
A Botswana entrepreneur, inspired to make his continent a safer and cleaner place, is using his South–South connections to expand his waste sanitation business.
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© Johnnic Communications
Mashudu Ramano, a business leader with a new vision for Africa. |
Creating an African Business Superpower
Johnnic Communications, also known as Johncom, is one of Africa’s largest media and entertainment groups with interests ranging from bookshops to movie theatres clustering around its newspaper, music and film distribution business. It shares major links with a British multimedia giant but the South African company has always been a champion of South–South trade. Now it is expanding vigorously in Nigeria to help develop the potential of what has been called the Nollywood film business.
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© ITC/ S. Betemps |
Buy in Africa, Sustain Local Communities
By Christopher Simpson
A Côte d’Ivoire food company’s contracts with aid agencies has provided jobs and income for local communities. ITC’s buyer-seller meetings for the aid sector played a part.
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Matching Africa’s Firms with Aid Agencies
Donors, international aid agencies and non-governmental organizations spend billions of dollars each year on relief supplies. In the UN system alone, US$ 4.6 billion was spent in 2001 on goods and services, of which nearly 60% was destined for Africa. Yet less than 7% of total UN procurement is supplied from Africa.
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Buying from Africa for Africa
Hendrik Roelofsen, new Director of ITC’s Division of Technical Cooperation Coordination, speaks about the organization’s programme “Increasing Africa’s participation in development aid procurement”.
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Fighting Malaria with Locally-procured Products
Malaria is one of the world’s most devastating public health problems. According to WHO, there are about 300 to 500 million cases each year and nearly 90% occur in Africa. In October 1998, WHO, UNICEF, UNDP and the World Bank launched the Roll Back Malaria initiative (RBM) which aims to halve the number of cases of the disease by 2010.
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ITC Training - Helping Developing Country Enterprises Enter the Aid Market
Increasing the regional and international trade potential of developing countries is vital for their future growth and prosperity. But often a country’s enterprises do not know how to access markets beyond their borders.
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Accessing the Aid Procurement Market
It can be difficult and time-consuming to get a foothold in the aid procurement market. In this article, we offer practical guidelines for developing country enterprises on overcoming some of the most commonly faced obstacles to entry into this complex market.
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Supplying Aid Agencies
In 2000, international aid agencies procured an estimated US$50 billion worth of goods and services for worldwide development and relief projects. The United Nations (UN) system accounted for US$3.7 billion of this total. Constantly growing and diversifying, the portfolio of goods, equipment and commodities procured by international aid agencies ranges from grains, cereals and agricultural equipment, to water supply and sanitation, shelter and domestic items, medical and transport equipment, office equipment and supplies and fuels.
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The Untied Aid Debate - Forum presents an analysis of the ongoing debate on tied and untied aid through contributions from principal participants. The opinions expressed in these articles are those of the Organisation for Economic Co-operation and Development and ActionAid. |
Development Choices: Opening Up Markets
Untying aid to the least developed countries (LDCs) of the world has been an objective at the Organisation for Economic Co-operation and Development (OECD) for many years. Now a breakthrough has been made which could see the world’s poorest countries being able to spend more of their bilateral aid funds according to market demands, rather than those of donor governments.
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The OECD/DAC Responds: Interview with Jean-Claude Faure
Jean-Claude Faure is Chair of the Organisation for Economic Co-operation and Development’s Development Assistance Committee (OECD/DAC). In this interview, he responds to questions about the DAC’s recent Recommendation on untying aid to the least developed countries.
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ActionAid: Untying Aid in the European Union
United Kingdom-based development NGO ActionAid has lodged a legal complaint about tied aid within the European Union. It argues that without positive efforts to boost developing country participation in aid contracting and procurement, many of the damaging aspects of aid tying will continue.
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Many aid-funded buyers are putting tenders in the Internet. |
E-procurement in the Aid Business
In this article, developing country suppliers can find details of some of the trends in aid e-procurement as well as tips and useful addresses.
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Useful aid procurement web sites
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Getting Connected - UNDP Procurement
The United Nations Development Programme (UNDP) is working to promote digital entrepreneurship and foster private-sector partnerships. As part of this effort, UNDP’s procurement centre, the Inter-Agency Procurement Services Office (IAPSO), based in Denmark, developed a web site, called UN Web Buy, that is easily accessible to all partners working in the development field (http://www.unwebbuy.org).
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Regional Initiatives in Group Buying - The Red Cross and Red Crescent Experience
International non-governmental organizations (NGOs) are key players in the procurement of humanitarian aid goods and services. Each year they purchase hundreds of millions of dollars worth of items from suppliers around the world. One example is the International Red Cross and Red Crescent Movement which works toward making the purchase of first aid materials more cost effective and quality-assured.
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Kaluworks: Pots and Pans for International Aid Agencies
Kaluworks is a manufacturer of pots and pans in Nairobi, Kenya. The company has long-term agreements with UNHCR, ICRC, IFRC, the World Food Programme (WFP) and Save the Children Fund (United Kingdom).
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Spinners and Spinners Blankets the Humanitarian Aid Market
The story of Spinners and Spinners, an enterprise based in Nairobi, Kenya, illustrates the opportunities and challenges of one developing country supplier doing business with international aid agencies.
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Photo: R. Carter Rachel Carter, CEO of Southken, a small South African company which stocks and exports blankets for aid agencies, says business has increased by 50% as a result of participating in ITC’s programme. |
Success out of Africa
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.
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To form partnerships, natural product companies need to develop internationally-accepted business practices. |
LatinPharma 2003: Forging Alliances Between ‘Natural’ Partners
The world market for natural products is estimated to reach US$ 100 billion by 2010. Medicinal products make up around 80% of this market. By linking up pharmaceutical and natural product companies, ITC is assisting the pharmaceutical industry in Latin America to become competitive exporters of natural medicinal products.
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LatinPharma Helps Small Firms Compete
By Emmanuel Barreto, ITC
A niche in the market
Small firms in the pharmaceutical sector are often well placed to satisfy demand for generic drugs, an area not always of interest to large suppliers of research-based products. However, for small firms to stand their ground they have to be efficient. They need to adopt the same competitiveness strategy as the large companies: economies of scale. As these aren’t often found at the national level, firms need to look regionally for strategic alliances. ITC is helping small pharmaceutical firms and those in related sectors to find partners, through programmes such as LatinPharma.
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A Textbook Case To Buy Regionally
ITC’s buyers-sellers meeting for the printing and publishing industry in francophone West and Central Africa (Dakar, Senegal, May 2003) was reported in several African media. ITC’s trade flow analyses reveal a sizeable market for the sector’s products and services in the region. They also show abundant regional supply capacity — but there is actually very little trade in this sector between countries in the region.
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Asian Automotive SMEs Meet in Singapore
ITC organized a pan-Asian buyers-sellers meeting for the automotive components sector (Singapore, December 2002), to promote trade linkages between firms from 12 Asian countries.
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Click on the image to view pdf. |
South-South Trade: Tapping the Potential
Challenges Developing countries don’t fully exploit good business matches among their firms. Exporters still tend to focus on traditional markets in industrialized countries. These markets are highly competitive and difficult to enter, whereas for many developing country firms, neighbouring markets offer immediate opportunities. ITC has been promoting South-South trade for over 30 years. The untapped potential is great among developing country firms. What is holding them back? The answer is a mix of related facts and perceptions. First, it’s often believed that developing countries produce similar goods — mainly raw materials and commodities — and therefore don’t have trade complementarities. The lack of reliable trade information perpetuates this belief. In fact, from blankets to school textbooks and mobile phone operators, developing countries produce a wider range of goods and services than conventional wisdom would have us believe. Second, there’s a notion that low gross domestic product levels reflect limited market potential. However, developing countries import — often at high cost — from developed countries. Third, while trade between developing countries is currently growing by 10% a year, the pace could pick up if trade barriers between them fall. On average, trade barriers among developing countries are three times higher than those imposed by the developed world. For manufactured goods, they are six to eight times higher. Fourth, countries do not usually have a trade promotion infrastructure to encourage bilateral and multilateral trade, such as reciprocal chambers of commerce or mutual recognition of standards and inspection procedures. Developing countries also lack basics such as reliable transport and telecommunications links, and corresponding banking facilities. South-South trade can be a “training ground” for developing and transition economies to enter the global trading system. Establishing business links across borders in the South builds confidence and economies of scale that make it less risky to expand to a wider range of markets.
Solutions- Information to overcome misperceptions. Research and provide details of regional trade potential for national exports, availability of products and services to import from other developing countries and capacity of firms to deliver.
- Trade promotion infrastructure. Promote links between trade support institutions, establish regional trade information networks and harmonize trade procedures.
- Reduce trade barriers. Business and government can work together to identify barriers — such as tariff or quota restrictions — that hamper the growth of South-South trade. Negotiate for their removal in bilateral, regional and multilateral trade forums.
How ITC Can Help - The South-South Trade Promotion Programme raises awareness about trade potential in various sectors between developing countries, provides market analysis tools to identify opportunities and translates them into business deals by bringing together buyers and sellers within a region. Participants have struck new deals in sectors such as, pharmaceuticals, textbook publishing, automotive components andhumanitarian supplies, with each meeting generating millions of dollars in new business.
- ITC strengthens trade promotion infrastructure with technical assistance on legal, trade finance, packaging and export quality management issues. ITC programmes and tools help improve trade promotion organizations’ performance and trade information services.
- Supply and demand surveys on countries and products fill trade information gaps, encourage information exchange and help harmonize inspection and certification procedures.
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