Discussion Brief for the Export Strategy-Maker

As an introduction, let us remember that towards the end of the 1950s, the great fashion and concern in thinking about foreign trade, from the point of view of the authorities in the developing world, was import substitution. It was argued that import substitution, in terms of making foreign exchange available for national development purposes, had an impact equivalent to an increase in exports. To a certain extent, that trend fostered the ostrich approach, with its tendency to bury its head in the sand. Economic advisors were much in favour of blocking imports of finished products and stimulating their local production. There was a clear and manifest aim to become self-sufficient. Without criticizing the fundamentals of such beliefs, it is important to mention that the desire to stimulate local industry was also a leading force behind this attitude or policy.

No one, at that time, was really thinking of the much greater impact that export promotion and development could have for really and substantially increasing the availability of foreign currency required to cover the significant expenditures generated and demanded by the development plans and programmes of developing countries. Unfortunately, one of the most damaging results derived from such a practice was an unbelievable upsurge in import barriers, the almost total closure of economic frontiers in some cases, and the creation of a non-competitive, over-protected and inefficient industry as controls and protectionist practices were adopted. In several places, the consequences and negative effects of such practices are still being felt, and industry is having many problems in facing outside competition, from the point of view of both price and quality.

Subsequently, starting in the 1960s, a different trend in policy was initiated. Economic authorities in many countries became aware that they could not survive only on the basis of saving foreign currency expenditures: what they really needed was to increase foreign exchange availability, i.e. to have more foreign exchange available in absolute terms to purchase all the goods (capital equipment and raw materials) that they needed for development and achieving a higher standard of living. Along those lines, a general practice started in many developing countries for establishment of export promotion bodies (of various kinds), which were given the responsibility of assisting in the generation of new and increased exports. In many countries, such export promotion effort was carried out in an environment characterized by a very narrow export base, often an almost single-product export at the beginning.

A significant number of the TPOs existing today were created in the 60s and 70s, as a result of the new focus adopted. They may have been updated, transformed or changed one way or the other, but their origin goes back to those decades. Only a few countries in the so-called developed or industrialized world already had trade promotion bodies at the time when the trend started. But one problem faced by newcomers was that not much expertise in organizing and running trade promotion bodies and programmes was available at that time. In a great number of cases the statutes, legal documents and regulations were issued following mostly what was dictated by "common sense". The organizational structure of promotional institutions did not have a technical basis. As time has gone by, there is today significant knowledge of best practices and on the reasons behind the success or failure of such bodies. But it took many years to develop and accumulate such expertise. Consequently many of the promotional bodies, in their origins, were not the best conceived ones from a technical point of view.

In the environment of those times, TPOs were justified in taking as their main purpose the teaching and guiding of an incipient community of exporters to explore foreign markets and to achieve, within their own enterprises, the level of competitiveness required to face the outside world. Simultaneously, efforts were made to induce non-exporters to start selling abroad, an effort which was supported in many cases by a variety of incentives, subsidies and privileges. Over time, and through pressures from multilateral organizations, those subsidies have been minimized or eliminated in many cases, although not completely. And on this regard it is interesting to note that such artificial practices are not exclusive to developing countries.

At the same time, the practices known as globalization have spread around the world, and they have extended to both developed and developing countries. As a result of the new attitudes adopted by many Governments towards real economic integration, the formation of economic blocs, the gradual and relative elimination of many non-trade barriers and the development of communications in a broad and general sense, the potential markets for any product have widened, and competition from other countries has also increased significantly. Privileges of a political nature, which in the past were very important for trade, implemented mainly through bilateral agreements and negotiations, have lost their importance, and competition must be faced today on pure and open economic grounds within a multilateral framework. Today, the actual or potential exporter, no matter from what country, must be much more alert, well informed and prepared than 20 or 30 years ago.

Initially, when the trend changed from import substitution to export promotion, efforts concentrated on trying to export whatever the country produced. This might have been the correct approach, since it was impossible in many countries to achieve an immediate and substantial change in their product mix. However, in a relatively short period of time it was realized that many developing countries were strong competitors among themselves by trying to export and sell, to developed countries, the same or very similar products, which originated in similar or comparable climatic and geographical conditions, and on similar development traditions.

With that in mind, a new trend became evident: that of export development, through which the export sector (Government and other authorities, institutions of a varied nature, and manufacturers, including actual and/or potential exporters) began to think about the identification, manufacture and sale abroad of new products, i.e., those different from the existing and/or traditional ones. This meant, in fact, an upsurge and stimulus to both the domestic industry and the export drive. And subsequently, when successful, it also meant a dramatic increase in the export earnings for the country as a whole and for manufacturers. This change of focus, given its intrinsic characteristics, made even more necessary the existence of a TPO, because of the additional and new assistance that the export sector required to be successful in the new drive to sell abroad.

Taking into consideration the evolution of the operational framework briefly described above, it is easy to conclude that there are many reasons supporting the need for increased competitiveness on the part of the manufacturers and exporters. It is also easy to conclude that organizations such as TPOs, responsible for providing guidance, information and support to those existing or potential exporters, are really needed and relevant, since there are no other organizations, in the majority of cases, which can provide in a widespread manner such guidance, information and support at reasonable costs and with adequate quality. We will discuss below subjects related to the effectiveness, efficiency, structure and character of these bodies.

Given the advances and progress achieved in electronic communications and the upsurge of many sources of information through the Internet, it might be claimed that these electronic developments should be enough to satisfy the requirements of the manufacturers and exporters. The reality is quite different. There is still a need for direct assistance from specialized institutions as well as for the human component that in many instances will mean the difference between success and failure. Such assistance, provided by technical staff, is the key to an effective guidance to interested parties within a path that will lead them to achieve success in their plans and programmes.

Notwithstanding what has been said so far and as a last comment on this regard, I would like to point out that it is most difficult to generalize on the absolute need to have, in all cases and at any cost, a TPO. 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, and therefore it is easy to conclude on the evident need and relevance of a TPO.

There are many opinions on this regard as well as several points of view, and therefore it is impossible to generalize regarding the effectiveness of a TPO. When examining the statutes of many of the existing bodies, one realizes that in the majority of cases they have been conceived with a clear desire to make them really work, and to become of great benefit to the export community. In most cases, the technical staff responsible for the preparation of the legal documents leading to the establishment of the corresponding body has been given the necessary preparation to write cohesive and well structured documents. In several cases, those legal bases have been conceived with the assistance of foreign experts, or after direct examination of the structure and organization of successful bodies in other countries.

It is also true that in many, many cases, TPOs have proven to be very effective in inducing producers to get involved with foreign markets. One way or another, and with different degrees of outside support, TPOs have managed to develop, as a basic tool, a system of commercial information and/or market intelligence. They have also been able to organize the participation in trade fairs and commercial missions abroad, provide assistance for the implementation of promotional programmes on a product basis, launch various kinds of publications for the use of a wide audience, etc. In short, most TPOs have done a lot to promote exports.

There are, naturally, a number of exceptions to this favourable evaluation. Aside from those reasons inherent to the institution itself, emanating from regulations, structural arrangements, general provisions and the like, which are fairly well known to almost everyone, and which have been examined on many occasions, there are a few reasons which can be considered as extrinsic to the TPO itself, and which in many cases are very damaging. Some of them can be gradually corrected by the TPO, or the institution can contribute to their solution, in different manners. However, until they are corrected, they might have such an impact on the TPO that many observers will say that the promotional body is inefficient, while in fact the inefficiency originates outside.

It must be noted that the constraints do not affect just the TPO. On the contrary, they are equally damaging to the whole promotional and developmental apparatus and structure as a whole, thus becoming one additional reason to remedy them as soon and completely as might be feasible. To summarize, the success of programmes related to export promotion and development will be dependant on some of the following reasons, among others:

• The degree of commitment of local producers to take part in a truly dynamic export programme. In many instances those producers are not really interested in deploying all the effort required by such sales programmes, and do not become full participants. To overcome this situation, several TPOs have modified their policy from a totally free programme to one in which the participants have to pay a certain portion of the expenditures. This has proven to be an satisfactory practice, since it reduces the number of participants to those really committed, which in turn results in a better usage of the resources available. It also allows the TPO and other institutions to raise the quality of the assistance, consequently increasing the satisfaction of users.
• The degree of competitiveness of the products for which an export programme is being implemented. In the majority of cases, lack of competitiveness cannot be attributed to the TPO but to other institutions or factors, among them the general conditions of the economy, excessive regulations (which do not favour price reduction), lack of ability of the manufacturers to achieve cost reductions, etc. The TPO can research new sources of raw materials, new technical approaches to specific problems, and can make representations to the authorities, trying to overcome the negative environment and the prevailing anti-export bias. It can even launch training programmes in association with specialized institutions, in order to increase the technical abilities of the staff concerned. If such improvements do not take place, the programme will necessarily fail. This is one of the reasons that justify the involvement of the TPO with plans and programmes to improve the effectiveness and efficiency of exporters.
• The degree of adequacy of the product to the requirements of foreign buyers. In spite of the fact that one of the responsibilities of TPOs should be to help manufacturers to adapt their product to those requirements, in many cases the producers are not willing to change, or cannot obtain adequate raw materials, or adaptation is not possible for some other reason. The TPO cannot be satisfied with those findings, even if the problems are not its responsibility. The promotional body must increase its research and the subsequent advice and guidance to the manufacturers, and must work together with them in the search for adequate solutions. There is no excuse to stop the whole programme without having made all possible efforts to improve the situation.
• The lack of a positive response given by potential foreign buyers to presentations and offers of adequate and competitive products. In many instances those foreign buyers are not really interested or willing to change their traditional source of supply, or have fears and doubts regarding unknown new suppliers. This is, of course, a much more difficult problem for the TPO to solve alone. It will take time until the potential buyers are convinced that they can benefit by using new suppliers. But the institution can help in a public relations campaign, concentrated on key market and product lines. And it can also help in attracting new buyers if it cooperates with quality control bodies in the observance of high quality standards and compliance with the perceived requirements of foreign buyers.
• Market conditions which cannot be modified by the exporters or by the TPO, such as the cost of transportation, the existence of trade barriers in the importing countries, etc. This category of difficulties includes also a sudden change in foreign market regulations, which vary the conditions under which a given product is sold, or the granting of special and additional benefits to competitor suppliers from other countries due to political or other reasons. The main role the TPO can play on this regard is pressure vis-à-vis the authorities in order to inform them of the situation and request their political and high level intervention in ending the unfavourable situation.

We might imagine a country in which the TPO has been established following the correct technical pattern, and in which the promotional body is initially provided with the tools as well as the human and financial resources required for a dynamic operation; we might also assume that it works within an economic and productive community anxious to grow and to penetrate foreign markets. However, it might be that after some years the promotional body is unable to show a true impact on the development of sales abroad, in spite of all those positive conditions (which might conform in reality to an ideal but maybe unrealistic situation). In those cases, there is a widespread tendency to say, with only a relative degree of reason, that the TPO is useless, instead of trying to identify the reasons behind those failures.

Experience shows that frequently, instead of trying to examine in depth the reasons for those poor results and subsequently adopt measures to correct the situation, the authorities decide to change the institution, and to "re-invent the wheel". It would be much more reasonable and convenient to provide it with the necessary operational tools, to adapt or change the existing framework, and to adopt new, much more favourable working procedures. Since those are not uncommon situations, it will be convenient to briefly consider the reasons leading to that point before concluding that a TPO is a useless institution. There are several reasons that may explain such situation. The main ones are briefly described below:

• The public sector mentality prevailing in many of the promotional bodies, which is easily understandable in those cases in which the TPO is an institution strongly embedded in the public sector. In fact, if the institution is part of a Ministry or public sector Department, it is very possible that a true promotional attitude will not be the force driving its officers, but rather that they will be strongly influenced by a regulatory and controlling mentality. For this very reason, in many instances great emphasis has been put on having autonomous bodies (which fortunately are the majority in the world), and that these bodies are managed and operated with a clearly defined "private sector mentality". Unless that position is achieved, it will be difficult for any institution with a strong public sector influence to be successful in achieving promotional and developmental objectives.
• Insufficient financial resources granted to the TPO. In the absence of an "isolated" and specific source of funding for the body, such as the existence of a tax or levy specifically destined for the promotional body, many TPOs depend to a very significant level on budgetary allocations from the Central Government. In nearly 80% of the existing bodies the situation is that they depend totally or mostly on allocations of that type. Such high dependence is relatively inconvenient, since it does not allow the TPO to plan ahead, due to the uncertainty of its resource allocation. In several instances it also receives an inadequate volume of resources, in absolute terms, to carry out its responsibilities.

The inadequacy of such budgetary grants is justified on political, and not on technical, grounds. In fact, although export promotion and development bring considerable benefits to the country as a whole, it directly benefits a relatively small percentage of the population. As such, Governmental efforts to sustain or increase export promotion and development programmes will certainly be much less popular, less appealing and less acceptable than programmes aiming at increasing, improving or sustaining health, education or public works programmes. The later group of programmes will certainly attract votes in an election, while the former (the export related ones), will not increase the support or popularity of political candidates.

• In a situation such as the one described in the first paragraph above, it is also quite possible that the TPO will work with an internal focus forgetting its clients: the exporters. In fact, much more attention will probably be given to trying to observe the operational rules and regulations, than to be imaginative and break away from the standard pattern (if needed) in order to achieve interesting promotional results. Institutions with a strong public sector influence, which to a certain extent are afraid of doing this, might become a failure from a total lack of imagination and unnecessary "sticking to the rules", instead of using the "promotional" mandate to act with some licence and much benefit to users.
• Lack of contact with exporters due to the way the TPO has been organized or is managed. When the institution has been established as a part of a Ministry, such isolation should not surprise anyone. In those cases the exporters do not maintain close contact with the promotional body since in most cases they consider it as a control entity. They are also suspicious about its relationship with the Ministry of Economy or the tax authorities, which they may fear for several reasons.

Aside from that, if the TPO is an autonomous body, the relationship with exporters depends mainly on the attitude of the management. If the attitude of the CEO and his/her immediate collaborators is a rather closed one and they consider themselves omnipotent, there will be a tendency to isolation. And if that happens, it is quite possible that the programmes and activities carried out by the TPO are really those that cater to the appetite of the management and not what the exporters require. If this happens, the TPO will be considered as a failure, since it will not be attending to the needs of its clientele.

• Aside from the factors indicated here, a detrimental factor for the success of TPOs is the tendency to exert rather strict adherence to regulations, forgetting to a significant degree the promotional mandate. It is well known that export promotion bodies must be imaginative and creative, and therefore (as seen currently) move from strict and simple promotion to a more dynamic focus on export development. If the institution and its staff are excessively conscious of existing regulations, and do not take the liberty to go beyond them when necessary, the institution is necessarily condemned to failure. Imaginative and positive approaches are necessary, even if they mean slightly exceeding some of the limitations imposed by inadequate or too strict regulations. Naturally, it would be more appropriate to modify those regulations, but that might be a little difficult and time consuming. Therefore, it will be advisable to keep this approach in mind, and whenever necessary to use discretionary powers to take a more positive focus.
• Labour regulations which do not facilitate the handling of staff, i.e., which do not allow free hiring and firing of staff, based on technical considerations. Another impact of inadequate labour regulations concerns the way and levels at which salaries are established. Being part of the public administration, there is a tendency in many developing countries to consider TPO’s staff at levels similar to those of other portions of the public sector, without making the necessary and due technical distinction. Since export promotion and development is a rather new activity, and requires special and different talents, in many cases no distinction is made between them and other people of the public sector. And if that happens, salaries are established mostly in accordance with the title of the position and not in direct relation with their technical characteristics and implications. This results in non-competitive salary levels, which do not attract the best-qualified staff.
• Several of the negative factors mentioned in this document have been conducive in several instances to the hiring staff that are professionally inadequate. Such inadequacy refers mainly to the attitude of the staff vis-à-vis the business sector, i.e., their inability to relate smoothly with them and to understand their needs and requests. In several cases, TPO staff have been selected from other public sector entities. In their previous experience they have not had responsibility for cooperating with the business community, but rather of supervising their dealings and exerting strict control in order to ensure the observance of laws and regulations. I am not advocating they should break the law. What I am indicating is the need to have staff with a favourable attitude towards the private entrepreneur, and if possible, to have staff with experience in such sector. It is much easier to learn how to apply certain controls (to a limited extent) than to change a way of thinking and whole set of relational attitudes.
• The habit, prevailing in several countries, in which the higher staff of a TPO are political appointees, placed there as a reward to their faithfulness and devotion shown in the past to the governing party. In several cases, it has been observed that the top executives of a TPO are far from having the necessary experience, knowledge and devotion in relation to trade promotion and development. Consequently, even if the institution is well equipped and financed, and if the rest of the staff is well qualified for the responsibilities given to them, the inclinations at the level of the CEO and his/her immediate colleagues, in more than one case, have made it almost impossible to achieve satisfactory results in terms of trade support.
• The lack of stability of regulations is another factor that militates against success for a TPO. Frequent changes in the rules of the game, and the subsequent uncertainty it generates, are very detrimental to the successes that might be achieved by exporters. And if they fail to accomplish substantial developments in their sales abroad, the blame might be placed on the TPO, when really the authorities are the ones that should be blamed for the way they handle the framework within which the economic actors are forced to perform. Unless there is general confidence in the manner in which one can plan and execute one’s business, it will be difficult to promote the achievement and successful realization of more aggressive and dynamic plans and programmes.
• As indicated, today there is a world-wide tendency to concentrate on export development as opposed to traditional export promotion. However, in many instances there is still an emphasis on market development, minimizing the efforts to widen and create additional exports that will be conducive to a real export development programme. In other words, many TPOs have the habit of concentrating their activities on participation in trade fairs and missions and minimizing research and mid-term planning activities that will be the basis for the creation of new exports and the penetration of new markets, perhaps in many cases on the basis of new products developed to satisfy emerging demands. This will be in fact the attitude that will give a real impetus to export development, and therefore the comment regarding the need to have a Research and Planning Division or unit, as indicated at the end of this paper.
• In relation to the previous comment, another situation in which the environment is not conducive to development of exports is when the paper work involved is overwhelming and excessively complicated. If that is the case, and if exports do not grow, it is not infrequent that the blame is put on the promotional body and not on the artificial and unjustified difficulties created by the Government which constrain the normal operation of businesses. We know of cases in which producers refrain from exploring foreign markets for fear that if successful in the marketing endeavour, later on they will be overwhelmed by excessive and impossible paper work. As a consequence they prefer to pass up on good and profitable opportunities existing abroad.
• The absence of an adequate network of commercial representatives abroad can be another reason behind the failure of an export promotion programme, and consequently for the failure of the TPO as such. If exporters lack this important support tool, it will be very difficult for them to achieve major penetration of foreign markets. And if that is the situation, it will be necessary first to analyse whether this is the fault of the TPO itself, or whether it is due to the attitude of the financial and regulatory authorities who have not provided the resources and means that will allow the creation and operation of such a network. It is most possible that in spite of all the efforts of the TPO’s management towards the creation of a network of representatives, there are many other obstacles, imposed by extrinsic elements, which make it impossible. In these circumstances, it would be totally unfair to put the blame on the promotional body.

In short, in spite of the bad results achieved in certain opportunities, the reasons behind those poor results should not always be attributed to the fault and failure of the institution. In many cases, it will be more advisable and fair to examine in detail the conditions within which the TPO operates, and then define whether the failure is due to causes that are internal or external to the promotional body. Starting from that definition it will be possible to adopt adequate remedial actions.

One important aspect of the debate around TPOs, in the light of several failures observed mainly in developing countries, concerns ownership of the institution. In other words, whether, instead of being it created within the public sector, and consequently being liable to the many problems inherent to that sector, the Trade Support Institution should be entirely part of the private sector, and operate with reference to the rules and regulations governing this sector, which are undoubtedly more liberal than those for the public sector. It is frequently stated that institutions being managed as private sector companies are free of defects. Experience shows that such a conclusion is not always true, and therefore it should not be taken for granted.

It is true that entities (whatever their nature and purpose might be) belonging to the private sector are, in general terms, more effective and efficient than those operating within the public administration. The latter are constrained in many ways, and in several instances the nature and character of the prevailing regulations are such, and might have so much force, that it is in fact impossible for the management to avoid their negative influence. If that is the case, one could be in favour of placing the institution within the private sector. But this will not determine, alone and by itself, the success or failure of the promotional body in achieving the objectives for which it was created. What seems to be more important is to change and remedy some of the inadequate practices and regulations which, as indicated before, are conducive to the existence of an inadequate operational framework. If such situation is corrected, the TPO will be able to operate in a smooth manner, and most probably will be able to achieve positive and appropriate results. In fact, there are many cases of successful institutions (TPOs as well as institutions of a different nature) within the public sector, which constitutes an evident demonstration that it is absolutely possible to have successful, efficient and effective public institutions.

Ii is more or less unanimously accepted that the greatest difficulty for a TPO in the private sector to perform successfully originates in its financing. As it is well known, export promotion and development is a very costly activity. As such, it requires adequate, abundant and in many instances non-recoverable financing. And the only entity which can provide funding under those circumstances is the National or Central Government, should it consider export promotion and development as a public service to the benefit of the country as a whole. If the above is accepted as fact, it will be very difficult for an institution in the private sector to receive a sufficient volume of such funding, unless the authorities recognize their inability to manage such institution. In that case, they might prefer to enter into some type of contract with some institution in the private sector, through which export promotion and development will be carried out under a contractual arrangement with one or more private bodies, and will be funded by the Government. But this will be almost a Utopian, not a realistic, situation. It will be difficult to imagine a Government willing to relinquish its privileges in handling such a programme or in controlling the funding, which might be quite significant.

There is no private sector in the world, considered as a group, able to entirely finance the activities of a fully-fledged TPO. It should be noted that some of the activities undertaken by a TPO correspond to those that normally are carried out by private consultancy firms on a paid basis. Were those the only activities of a TPO, there will be no inconvenience in advocating that these promotional bodies should be placed entirely in the hands of the business sector, and that the sector should assume all responsibility for their operation, acting as a paid consultant. This is reinforced by the present trend to charge for several of the services performed. But this will not be enough. Charges for services rendered are usually made at rates which do not fully cover their real cost. Those charges are in several instances established at a level which acts really as a means to filter applications, and to channel the service towards parties who are truly interested in the service or programme.

In addition, there are many activities legitimately given to a TPO, for which it is not possible to establish a charge, since the service is for general use and it will be impossible to identify the individual users responsible for paying the costs. The beneficiaries of many activities are not identifiable in such a manner that they can be isolated as those who should be liable for the payment. In fact, those actions belong to the "commonwealth"; good examples of this are information of a general nature, regulations, well disseminated information, and non-specific or non-tailor-made assistance and advice.

The only TPOs in the private sector known so far which have demonstrated relative success and a certain volume of positive achievements are those established within Chambers of Commerce. In these cases, if the chamber enjoys a privileged financial situation, it may have decided to channel part of the available resources to the rendering of a general service to the community as a whole, substituting, to a certain degree, for the obligation of the Government. But in these cases it has been observed that the range of services rendered is relatively limited, and in no case it can be compared to the actions and programmes undertaken by a real and complete TPO.

There are yet two other considerations that argue against placing the TPO in the private sector. On the one hand, if funded with moneys originating in the public sector the Government will be reluctant to grant complete freedom to its management, and there will be a tendency to interfere, control and supervise. In other words, the desire for freedom might be lost. And on the other hand, it might be possible that in the medium to long term the Government tends to forget about the support that the institution requires, since it will gradually and increasingly consider that it will be the responsibility of the private sector to make the institution operational. And in this case, the initial intention will be also self-defeating.

TPOs in the public sector can achieve efficiency and effectiveness provided they are managed under the conditions described in the following section of this paper. If those conditions are met and satisfied, there will be not much difficulty in achieving success.

The need for a TPO is not totally evident in the case of developed countries, in most of which the export community has already achieved a high degree of professionalism and experience regarding the marketing abroad of goods and services. In those countries, it might be more appropriate to have other institutions performing a variety of duties. However, I am fully convinced of the need for developing countries to have a TPO. I am also convinced that these institutions can be effective, efficient and most useful. This support to the TPO idea is closely related to the assumption that several conditions are fulfilled, a fact that in turn will be the basis for the presumption that the institution will be successful. If several of those conditions cannot be satisfied, it will be better not to create such body, and tackle the problem of export promotion and development with some other tools. The conditions for which I argue are the following:

• The promotional body must have very well defined objectives, and those objectives must be clearly understood by everyone concerned: the staff, producers and exporters, and the other institutions in the private or public sectors having anything to do with foreign trade. The definition of objectives concomitantly should be accompanied by a clear definition of each’s responsibilities. If such definitions are precise and well understood by all concerned, there will be no conflict of interest in the institutional community. It will have the added benefit that a user of their services will be in a position to request them from the institution which is best qualified and prepared to render them.

The satisfaction of this condition will lead strategy-makers to consider the need for a real trade development network, on the following grounds:

• The true role of the TPO should be to provide guidance, information and support to manufacturers and exporters, acting as a catalytic element, promoting adequate use of the talents and abilities of other bodies;
• Tt should concentrate its actions on promotional and development fields not covered by other bodies; and,
• It should stimulate the progress and actions of other bodies which have accumulated certain experience and have demonstrated technical preparation, have adequate funding, and have shown an ability to perform specialized duties for which the TPO is not qualified.

The body must enjoy autonomy within a fairly ample scope. Such autonomy must be reflected in its ability to carry out plans and programmes relevant to export promotion and development. Also, it must be reflected in the ability to finance those plans and programmes, and to enrol the services of qualified experts to perform the variety of duties attributed to the TPO. In essence, the autonomy which I am advocating refers to the ability of the institution to carry out operations without undue interference from the bureaucratic staff of the Government, interference which in no case will be conducive to positive results. I am not advocating chaos or lack of control, but freedom to act within adequate, reasonable and non-obstructive pre-established rules and regulations.

Complementary to the body’s operational autonomy, there must be adequate funding available, in such a manner that it will be possible not only to undertake comprehensive programmes, but also that the conditions for such funding will ensure, to a great extent, their permanence and continuity in the years to come. Only if that is the case will it be possible for the institution to launch medium-term programmes, and it will not be forced to limit itself to satisfying the daily needs and requirements.

Labour regulations applicable to the TPO, when the institution is embedded in the Government apparatus, must have an "exceptional" character or nature, i.e. they must recognize the special characteristics of the entity vis-à-vis the other institutions. Those special regulations will allow for the enrolment of highly qualified and well-trained staff and the means to keep them. The rules will also make it possible to provide special (and in many cases expensive) training to the staff without the danger of losing them soon afterwards, due to competition or offers made by other bodies in both the public and/or private sectors.

The TPO must have clear and undivided support from exporters. The business sector must consider the promotional body as part of their own community, and the TPO consider the business sector as its legitimate and true client, and as a partner in a medium- to long-term operations. There are many cases in which TPOs consider themselves primarily at the service of the State, a situation that is totally unfitting. On the other side, there are cases in which the business sector does not feel itself attracted by the TPO, since it feels that the institution cannot provide any real benefit. The needed support can be achieved through permanent dialogue and consultation, mainly in the form of working groups or committees through which entrepreneurs can make known their needs and requirements, and where the TPO can also request specific collaboration from the business sector. Adequate representation of the private sector on the governing body of the TPO is a very convenient way of going in this direction.

There is an evident need for a Board of Directors (BoD), on several grounds. The BoD should be composed of not too many members, around ten or eleven as a maximum, and there should be a mixed representation, from the public and private sectors, preferably with a majority of private sector representatives. If a BoD of such characteristics is achieved, it will be most beneficial for the institution since it will allow a wide interchange of opinions. It will also enjoy the advantage of having experienced people to assist in the management, planning and operation of the promotional body, and will also contribute to the design of realistic programmes.

Notwithstanding the existence of a BoD, the CEO, his/her deputy, and the management should enjoy enough operational autonomy to run the daily business. Decisions to be adopted by the BoD should concentrate on major strategical or operational aspects, delicate financial matters, and the like. It will be also convenient to establish a management committee, whose effectiveness and usefulness could be reinforced with the presence of one or two members of the BoD.

As a complement to all the above, there is an evident need for a corporate plan which will provide the promotional body with a clear "route map". In several institutions, this practice has been adopted as a regular matter. Such a plan should specify the medium-term objectives and the nature and focus of programmes that will be adopted and implemented in order to arrive to those objectives. Documents of this nature are fairly simple to prepare. Perhaps what is more difficult is to have the necessary "discipline" to stick to them (with adjustments, whenever necessary) and to maintain the emphasis on those aspects that are key to the success of the plan. However difficult this might be to carry out, it is most advisable to adopt such a practice.

As a minimum, the TPO must have the following units or divisions: Research and Planning; Trade Information; Product and Market Development; Specialized Support Services; and, Administration. The structure should be reflected in a clear and well-conceived organization chart. There should be clear divisional responsibilities and job descriptions reflected in documents which are well known to everybody, and which are implemented on a consistent basis. There should be also a sense of organized flexibility, through which changes in the structure, staff and responsibilities can be structured, adopted and implemented as required by changing circumstances, without undue complications.

There must be an effective system or network of commercial representatives abroad, that can be organized according to a number of variations, with or without the participation and involvement of the Ministry of Foreign Affairs. Without such representatives, who should be located in the most important markets, it will be impossible for a TPO to be successful in the achievement of its objectives.

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Posted 2 August 2001