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  • Debating Points

     Identify the right network partners 

    Anton J. Said, Manager, Business Information and Technology, Malta External Trade Corporation Ltd. (METCO), Malta

    As a network becomes successful, it is likely to attract new attention and new members. This, in turn, increases the value of that network to other users, inducing them to join. Fundamental to the success of the network, however, is its manageability. The larger the network, the greater is the need for supporting infrastructure, for systems of administration, management and control. Sometimes, more can be achieved with less. Problems may also arise from not identifying the right, or all the network partners. 

    Private trade promotion in Guatemala: some disadvantages 

    Giovanni Passarelli, Head of the Trade Promotion Department of AGEXPRONT, Guatemala City, Guatemala

    In contrast to governmental trade promotion organizations, AGEXPRONT’s budget does not allow it to finance, partially or totally, the participation of companies in international trade fairs and missions on a regular basis. This has become a limitation for smaller businesses that cannot afford the costs, leaving them out of the process. 

    As a non-profit private organization in an emerging economy, the most important restriction on its activities is financial. This affects not only the quality of services but also hinders the expansion of trade promotion activities. The exporters themselves have had to cover most of the costs. This excludes those companies that cannot afford to invest in trade promotion, which sometimes requires large sums at one time. Thus they miss opportunities to make new contacts and to obtain new clients abroad. SMEs are particularly affected. 

    Why we need Trade Support Institutions (TSIs) and Trade Promotion Organizations (TPOs)  

    Camilio Jaramillo, consultant, Colombia

    TPOs […] are really needed and relevant, since there are no other organizations, in the majority of cases, which can provide in a widespread manner guidance, information and support needed by the entrepreneur today at reasonable cost and of adequate quality. 

    In a few countries, with a well developed and qualified export community, and with a limited assortment of exportable products, it might be better to have marketing boards or similar specialized institutions. However, most certainly this will be the exception. 

    The role of the TPO  

    Michael Hannah, Manager – Government Relations and Policy, Chief Executive's Office, New Zealand Trade Development Board, New Zealand

    If it were to focus purely on external representation and promotion, the TPO will be less than effective in promoting trade and growth. Certainly, through its presence offshore, a TPO can identify trade opportunities even if it does nothing more than passively receive inquiries from importers curious to know what they can source from its country. 

    However, to be more effective in focusing these inquiries into profitable trade opportunities, a TPO will be armed with a thorough knowledge of the current and potential capabilities of its country’s firms. How it informs itself of these capabilities is crucial to the structure of the trade support network. 

    The views expressed are those of the writer and not necessarily of Trade NZ. 

    Trade support systems are forced to reinvent themselves  

    Lalith D.K.B. Gamage, Managing Director/CEO, Sri Lanka Institute of Information Technology, Executive Director, TradenetSL, Sri Lanka Export Development Board

    The digital economy has compelled the trade support systems to reinvent themselves. A TSI has now to change the way its support is delivered and it has to change the content of its support. It has to be proactive in meeting the demands of a growing clientele, and be fully e-competent. The establishment of e-business incubators have in recent times responded to this need by offering total business support to start up and fledgling companies who eventually migrate from the status of ‘e-enabled’ to ‘e-expanded’. 

    Export-oriented culture needed in China  

    China Council for the Promotion of International Trade (CCPIT)

    According to a survey conducted recently, what Chinese businesses expect most from TPOs are: 

    • introducing overseas buyers(80.3%) 
    • credit investigation(68.7%) 
    • foreign trade knowledge(47.5%) 
    • translation, transport, settlement, customs clearance, quality inspection(each 20%). 

    We think this is a one-sided view. In fact, we need to shift from export promotion to exporter promotion. We believe that to enable these SMEs to become more internationally competitive involves painstaking and long-term work in forging an export-oriented culture. 

    Policy inconsistency hinders exporters  

    Olufemi Boyede, Chief Executive Officer, Koinonia Ventures Limited, Lagos, Nigeria

    Policy inconsistency makes it difficult for manufacturing exporters to design any long-term plans. Government’s fiscal policies are, for example, modified and/or totally altered in each year’s national budget. 

    ISO 9000 certification and Colombia: good for exports  

    "Colombia is the country in Latin America where the ISO 9000 certification is growing fastest. The quality system has given SMEs confidence to export, and opportunities have arisen due to the fact that SMEs have been able to prove their reliability with foreign buyers More than 90% of the companies that have implemented ISO 9000 say that the cost/benefit of doing so was beneficial for them and more than 64 % say that they increased their exports."

    Fabio Tobón, Colombia 

    The Mauritius Standards Bureau – training industry  

    "Significant resources were devoted to awareness-building at the level of MSB (Mauritius Standards Bureau) staff, technical committee members and policy-makers from both the government and the private sector. The MSB’s role was not limited to standards writing but also encompassed provision of training to industry in statistical quality control as well as testing within its six main laboratories; it can be stated that these laboratory services were really pioneers in the areas of testing offered."

    B.A. Budoo, Mauritius 

    Malaysia – mutual recognition in the Asia-Pacific  

    "Malaysia has established a number of mutual recognition arrangements with several APEC economies both at the voluntary and official level, and welcomes further development of such arrangements in all sectors of the economy with a view to facilitating trade. Such arrangements are established on the basis of guidelines published by international organizations such as ISO and IEC to ensure transparency and ready acceptance."

    Dato’ A.Aziz Mat, President, Institute of Quality Malaysia (IQM) Malaysia 

     AGEXPRONT’s Foreign Trade School 

    The school’s programme met the needs of small and medium size companies, including:

    --lack of knowledge and fear by executives of small and medium sizes about starting to export 

    --limited managerial capacity among exporters, which means that their products are unable to access international markets or unable to stay in that market 

    --lack of competitiveness in the face of globalization 

    --lack of knowledge of the options they have to find potential customers and market niches that may be accessible for their products 

    --lack of knowledge of sources of information and consultation 

    --deficient administrative structure and lack of long-term planning. 

    Nevertheless, throughout the course, other needs have been detected in small and medium-size companies in areas like financing with accessible credit lines, technology transfer and the Internet. These are important subjects that are presently not being covered, but efforts are being made to enter into alliances with agencies and projects that are related with these in order to cover them in the future. 

    Mr. Alvaro Aguilar, General Manager, Technical Services Division, AGEXPRONT! 

    Success and Failure of Trade Information Networks in Russia: Virtual or Real? 
    Before the Internet era most trade information networks in the Russian Federation (and previously in the Soviet Union) were strongly based on regional representative schemes. When the Internet got its first thousands of Russian users, management of ICSMIR, started at the beginning of 1991 as a pure information network, collecting and disseminating business related information. decided to provide access to its databases via the Internet. After a couple years ICSMIR decided to cancel the "old fashioned" techniques for access and completely moved to the Internet. As a result they almost completely lost users from the regions for two reasons: firstly, the development of Internet technologies started mainly in Moscow and St.Petersburg and are still badly developed in the Russian provinces, and, secondly, direct local sales are dramatically more efficient in comparison to online sales. ICSMIR is still operating. They diversified their activities into the online sales of books, music and videos. The share in their sales of information services declined by several multiples. Many other information networks have followed the same path and failed in the end because of a strong focus only on virtual sales via the Internet.

    Igor Kuprienko, Deputy General Manager, St.Petersburg Foundation for SME Development (SMEDA and BCC) 

    New Zealand: a virtual team approach to promoting trade 
    In 2001, Government established a new development agency, Industry New Zealand, to provide domestic support for the development of management skills, high-growth industries and sectors, and export clusters. Today, each member of the trade support network has a specific role or speciality, whether it be management capability development, technology development or trade support. Where there is overlap, for instance in dealing with industry sectors, or in attracting investment at different stages of the business life cycle, roles are clarified along the way. In New Zealand’s case, the formality of the structure of the trade support network is limited, creating what might be termed a "virtual team" approach to promoting trade.

    Michael Hannah, Manager – Government Relations and Policy, Chief Executive's Office, New Zealand Trade Development Board, New Zealand. The views expressed are those of the writer and not necessarily of Trade NZ 

    The trade promotion network in Vietnam –is it working? 
    The lack of competition and the fact that many Vietnamese exporting enterprises cannot afford to pay or are not used to paying fee for services are important reasons explaining the underdevelopment of specialized trade support institutions. As a legacy of a centrally-run economy, many exporters still think that trade promotion is the job of the government or should be heavily subsidized by the government.

    Sri Lanka: A focal point approach to export promotion 
    Approaches that could add dynamism and vigour to a meaningful new export development programme include:

    1. Strengthen the overseas trade support network. This approach will enable consolidation of existing markets and exploitation of new markets. 
    2. More emphasis on market research and market surveys with a view to develop new markets and expand existing markets. This approach should be linked to the strengthening of trade information services utilising modern technologies. 
    3. Exporter training programmes should be broadbased and strengthened to develop a high quality and ethical exporter base that meets the demands of competitive world trade. 
    4. Create an export awareness and entrepreneurship among the younger generation, through the identification and implementation of suitable programmes in collaboration with universities and other relevant educational institutions. 

    Trade promotion challenges in Cote d’Ivoire  

    We have tried to evaluate the effectiveness of the network of services provided. According to the findings the network is effective in terms of private sector orientation, autonomy, financing, personnel, strategic planning, flexibility, and its continuous evaluation process. The weakest point of the network is the lack of a national export strategy and a national consensus for the promotion of exports. To better address the needs of the exporters, the network should also develop more services particularly in the area of access to credit.

    Guy M'Bengue – CEO APEX-CI, Alain Donwahi – PDG EXCELL S.A, M.A Zando – Consultant APEX-BASE 

    Philippines 

    Unlike a single trade promotion organization (TPO) in many developed countries as well as newly-industrialized economies such as Singapore, Hong Kong and South Korea, the unique feature of the International Trade Group (ITG) of the Phlippines is that it is composed of different agencies with specialized functions working closely to deliver their services to clients. The package of assistance being provided by the ITG agencies is integrated and well-co-ordinated starting from the development of SMEs as local sellers to the promotion of SMEs as international sellers.

    Burkina Faso: training in English 
    In addition to the organization of seminars and workshops on international trade techniques and practices, Burkina Faso’s Trade Point ONAC has set up a commercial and economic English course for exporters and importers. By teaching the business community Business English we make them more and more independent of our institution. After completing the course, they are able to talk with their customers, write letters, fax by themselves without assistance, and to travel abroad without hiring the services of an interpreter or a translator. With the business community able to use English, we now have time to develop other services for trade promotion.

    Issa Benjamin Baguian, Director of the Trade Point of Burkina Faso 

    Bangladesh: networking to control child labour 
    The USA, which is a major destination of Bangladesh’s apparel export, threatened that it would ban import of such products from Bangladesh if employment of children in the industry was not stopped forthwith. An integrated initiative involving a number of public sector agencies and trade associations successfully eliminated child labour from this sector. This success story of effective networking is now looked upon as a model for those countries where child labour still exists.

    Suhel Ahmed Choudhury, Secretary, Ministry of Commerce, Bangladesh

    Pakistan’s Export Promotion Bureau: Constraints to Effectiveness 
    There should be a genuine alignment between the Export Prmotion Bureau and the Revenue Departments. While the EPB has no difficulty in mounting its promotional programmes, it faces difficulties in facilitation issues due to the indifference or even resistance of the Revenue Departments for whom taxation and revenue collection has higher priority. There are numerous cases of over-regulation and over-control and, there are inordinate delays in clearances that hold up the process of exportation.

    M A Wajid Jawad, Ex-Minister of State & Chairman, Export Promotion Bureau, Government of Pakistan

    Bangladesh’s Matching Grants Programme 
    Exporters said the Programme is the only donor-funded programme that really assists them taking the perspective and orientation of exporters and providing a cash subsidy.

    Ibero American Network 
    The Ibero American Network of Trade Promotion Organizations, constituted on June 17, 1999, is not a formal association or legal entity: its objective is to foster the exchange of experiences and communication on relevant issues among members, which include representatives from 22 public Ibero American trade promotion organizations.

    Ibero American Network  

    Bancomext's Trade Promotion 
    Under the National Development Plan, Bancomext is building a platform to reach any point in the two million square kilometers of the Mexican territory. A powerful information network is being constructed with federal, state, and municipal aid. SMEs are connected to local-regional information nodes (OEP) through a standard promotion organization, and are linked to a central nucleus (Bancomext + Federal Authorities + Entrepreneurs). Bancomext supplies the necessary resources, the network infrastructure, information and training. Mexican offices abroad are centrally coordinated.

    Raúl Argüelles, Deputy President, Mexican Bank for Foreign Trade: Bancomext

    Challenging times for Moldovan exporters: the role of the state 
    The State should empower the process of change and should monitor developments, but should not become actively involved. A stable and consistent direction should be maintained and the short-term social consequences of change should be moderated through enlightened policies.

    From the discussion brief 

    Ghana: communications gap 
    The most obvious weakness in the Ghana National Trade network is the communication gap. Thus the Trade Associations are running independent programmes. The Ministries are developing trade-related policies without adequate consultations with the financial sector, trade associations and NGOs. The communication gap has made many Agency and NGOs [intervene in] areas that have been already dealt with by another member. At times, unhealthy competition for attention to particular programmes result in making the target beneficiaries more confused.

    For instance, there are several production assistance and micro-credit schemes for Small and Medium Enterprises (SME’s). International and local NGOss provided assistance to community level private operators [producing ginger and sunflowers] only to face difficulties in marketing, largely because there was no basic infrastructure at the farm level and at the port to effectively handle them.

    Trade Support Network in the Private Sector: Bangladesh Design Centre 
    DCCI is a major Chamber of Commerce located in Dhaka having around 3000 members from a diverse range of business from trade and industries. DCCI has set-up a design and Technology Centre in cooperation with the GTZ of Germany. The objective of the project is to develop the capabilities of small and medium sized enterprises (SMEs) in selected sectors (Textile, Leather, etc.) to design and manufacture better quality products. This project envisages the transfer of technology to SMEs through the creation of a product development service centre under the DCCI. By utilising the services of this centre, the SMEs will be able to acquire the technical capability to eventually develop products by themselves (with the help of the centre) and manufacture products of adequate design and quality that will be more competitive in the local and foreign market. The first phase of the project started in February 1999 and continues till January 2002.

    Kenya: the importance of regional markets 
    About 40% of export earnings are generated from regional markets where Kenyan manufactured products are competitive in terms of quality and price. This points to success in negotiating favourable conditions and appropriate regional and bilateral trade arrangements.

    Mauritius: avoiding duplication 
    For a country and an internal market of the (very small) size of Mauritius, duplication of activities can be extremely wasteful. In either a tacit or an organised manner, many services both in public and private bodies are devised and shared in such way as to ensure and maintain complementarity in terms of role and functions. Owing to the island’s dimension and concentration of administrative functions in and around the capital, interaction between the representatives of the various bodies and structures is relatively easy and frequent.

    Mongolia: struggling for survival 
    The current network is not effective enough, due to lack of suitable legal regulations and clear operating guidelines, lack of qualified and skilled human resources, accumulated experience and fair competition. Most of the recently formed non-governmental business and product associations lack trade promotion skills and financial resources and are working mainly for business and their own survival.

    Kazakhstan: President takes the lead 
    Kazakhstan’s current export profile requires a state policy which simultaneously seeks to improve the competitivity of its basic export goods and to develop non-conventional, new goods for export requiring a high level of processing. As exports play an essential role in economic growth of Kazakhstan, relations with international organizations are managed personally by the President.

    Top of page  

    Posted 18 August 2010 
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