Making Countries Competitive Beyond the roads and bridges

Transcription

1 The Role of the Private Sector, Soft Infrastructure and Making Countries Competitive Beyond the roads and bridges Ms Patricia Francis Executive Director 2010 ECOWAS Aid for Trade Meeting World Bank s Prospects for the Global Economy Global Economic Prospects underestimated crisis World GEP2008 GEP2009 GEP2010 High Income GEP2008 GEP2009 GEP2010 Dev. Countries GEP2008 GEP2009 GEP Sources: GEP (except interest rates and oil prices) 1

2 ECOWAS Aid for Trade Meeting Socio-economic Impact of the GFC for developing countries Direct Social Impact (short term): Additional million people living on less than $1.25 a day during 2010 Additional 30 to 50 thousand children deaths from malnutrition during 2009 in Africa Indirect Social Impact (short and medium term) Reduced Government revenue in developing countries, including direct taxes, trade-related revenues, etc. Increased Government expenditures, including debt-services Direct Impact well understood but indirect impact not adequately focused on by the aid community. ECOWAS Aid for Trade Meeting Impact of the Crisis on LDC trade Export Earnings for LDCs USD Millions All Products Crude Oil Source: ITC TradeMap Reporting Countries: Australia, Bolivia, Brazil, China, Chinese Taipei, Colombia, El Salvador, EU27 (less Belgium), Iceland, Japan, Mauritius, Mexico, Singapore, Switzerland, Thailand, Turkey, United States of America 2

3 ECOWAS Aid for Trade Meeting Medium-Term Impacts of Primary Commodity Prices in ECOWAS Cotton 4% Wood 6% Rubber 8% Ores, slag and ash 8% ECOWAS export composition, excluding mineral fuels Rest 29% Cocoa 45% Diversification of Exports number of exported products Exporter Within 75% Benin 7 Burkina Faso 2 Cape Verde 24 Côte d'ivoire 11 Gambia 21 Ghana 18 Guinea 3 Guinea-Bissau 1 Liberia 2 Mali 1 Niger 5 Nigeria 1 Senegal 35 Sierra Leone 13 Togo 19 ECOWAS Aid for Trade Meeting Medium-Term Impacts of Primary Commodity Prices in ECOWAS US cents/lb USD/bar Copper - US cents/lb Crude Oil - USD/barrel US cents/lb Cocoa - US cents/lb Cotton - US cents/lb 3

4 ECOWAS Aid for Trade Meeting Crisis Impacts on Exports from Least Developed Countries Table: LDC Export Performance for Q1 to Q3, Excluding Crude Oil (USD Billions) Growth in Value Growth Rate 2008 Q Q Q LDC (4.047) % -12% 4% LDC-WTO (2.408) % -8% 5% LDC non- WTO (1.730) (0.547) 28% -32% -7% Developing Countries ( ) ( ) 18% -25% -6% World 2, (4, ) (2, ) 17% -28% -8% Source: ITC TradeMap Please note that intra-regional trade is not accounted for. Reporting Importers: Australia, Bolivia, Brazil, China, Chinese Taipei, Colombia, El Salvador, EU27 (less Belgium), Iceland, Japan, Mauritius, Mexico, Singapore, Switzerland, Thailand, Turkey, United States of America. ECOWAS Aid for Trade Meeting Crisis Impacts on Exports from Least Developed Countries Table: Volume Changes for LDC Exports ( ) Excluding crude oil Share of Exports Q1-Q3 Y-o-Y Growth HS2 Commodity Volume Values Total All commodities 100% 2.6% -12.0% 61 Apparel, knit 22% -0.7% -1.8% 62 Apparel, not knit 17% -1.3% 0.5% 27 Mineral fuels, oils, distillation products, etc 13% -19.0% -34.1% 26 Ores, slag and ash 8% 24.7% -22.4% 74 Copper and articles thereof 4% 59.2% -7.3% 03 Fish, etc 4% -0.7% -17.9% 09 Coffee, tea, mate, etc 2% 8.1% -7.2% 44 Wood, etc 3% -28.2% -40.1% 12 Oil seed, oleagic fruits, grain, seed, fruit, etc, nes 2% 34.7% 27.2% 24 Tobacco 1% 11.2% 39.4% Source: ITC TradeMap Note: Crude oil comprised 55% of LDC exports in 2008 Reporting Importers: Australia, Bolivia, Brazil, China, Chinese Taipei, Colombia, El Salvador, EU27 (less Belgium), Iceland, Japan, Mauritius, Mexico, Singapore, Switzerland, Thailand, Turkey, United States of America 4

5 The World Bank recently released the 2010 Logistics Performance Index (LPI) a multidimensional assessment of logistics performance, rated on a scale from one (worst) to five (best). Where do ECOWAS members find themselves? COUNTRY Rank Index COUNTRY Rank Index Germany Singapore South Africa Senegal Benin Togo Guinea Haiti Nigeria Yemen Niger Côte d'ivoire The Gambia Ghana Liberia Botswana Mali Burkina Faso Guinea-Bissau Sierra Leone Somalia *Cape Verde N/A N/A Source: Connecting to Compete 2010 Trade Logistics in the Global Economy The Logistics Performance Index and Its Indicators 3 5

6 Why should the public and private sectors invest their time, effort and money on improving the soft infrastructure supporting their international movement of goods? Because of the excellent rate of return The importance of efficient logistics for trade and growth is now widely acknowledged. Evidence from the 2007 and 2010 LPIs indicates that, for countries at the same level of per capita income, those with the best logistics performance experience additional growth: 1 percent in gross domestic product and 2 percent in trade. The World Bank s analysis based on the 2007 LPI or similar information has shown that better logistics performance is strongly associated with trade expansion, export diversification, ability to attract foreign direct investments, and economic growth. in other words, facilitating trade matters! 4 A number of initiatives under a soft infrastructure improvement commitment can yield some critical improvements for the trade community. These are not outside the grasp of low-income countries provided that the right thing is being done at the right time and in the right places. Liberalizing logistics services markets in particular, competitive customs brokerage and trucking services drives up quality and tempers costs Coordination among border present government and private sector agencies is a primary time and cost thief. Understand your trade community. Know the 5 Ws. A relationship of trust but verify is only effective through a foundation of understanding. Establish a client-service culture. Public sector to see traders as clients and traders to use officials as enablers who facilitate legitimate and protect the country from unlawful activity. It has been shown to deter corruption. Measure. Managing through performance indicators is the most effective means of ensuring that investments and interventions anywhere from new legislation to a new electronic manifest system are truly the most relevant solutions for improving the international movement of goods. 4 6

7 Our role in your success: Connecting opportunities to markets PACT II Programme Objective: Foster intra-regional trade by connecting business and governments to develop specific sectors within regions Partner: COMESA, ECCAS and ECOWAS Budget: CAD 20 Million CBI Programme Objective: Create sustainable exports in selected countries (6-7) Partner: TSIs involved in exports promotion and supply/value chain development Budget: USD 16 Million over 4yrs Our role in your success: Delivering long term tangible benefits Mali Mangoes: Creating partnerships with producers in Mali and buyers in Europe ITC has facilitated broadening markets for Mangoes and increasing export tonnage ( ) Spices Project: In partnership with the American Spices Trade Association ITC has assisted Ethiopia, Madagascar, Tanzania and Uganda to improve their product quality standards for the spices export markets Environment: With support from DfID ITC successfully led a campaign to stop certification of organic agro-products from Africa, a 42 million market that could have been lost to Africa.. Gender: ITC is empowering women to engage in productive businesses and thus effectively contribute to income creation and poverty reduction 7

8 Women and Trade Programme Objectives: Export success for women-owned SMEs Empowering business environment for women Effective communications that influence outcomes Gender mainstreamed at ITC Our role in your success: SMEs are critical to the success of any country European Union SMEs play a highly important role in European Union countries. There are more than 23 million SMEs in the enlarged Europe and Europe s economic performance depends on them to a large extent. In the EU, they constitute the vast majority of enterprises (99.8%), provide almost 66% of employment in the private sector, while contributing to 57% of value added. (Sorurce: : REMOVING BARRIERS TO SME ACCESS TO INTERNATIONAL MARKETS/ by OECD, 2008) Canada Small businesses accounted for approximately 26 percent of Canada s GDP.. Over the 2000 to 2007 period, the contribution of small businesses to GDP increased slightly at the national level from 23 to 26 percent. (Source: : REMOVING BARRIERS TO SME ACCESS TO INTERNATIONAL MARKETS/ by OECD, 2008) 8

9 SMEs are critical to the success of any country Our role in your success: United States The small business share of GDP in the US has held virtually constant from 1998 through 2004 starting at 50.5 percent in 1998, reaching 49.9 percent in 2000 then rising to 50.7 percent in Small firms with fewer than 500 employees make up 97.3 percent of identified U.S. exporting companies. The total known value of exports has continued to increase, nearly doubling to $910.5 billion over the decade. The small firm share of that value has declined slightly over the past decade, from 31.1 percent in 1996 to 28.9 percent in (Source: The Small Business Economy 2008 / by Office of Advocacy of the U.S. Small Business Administration (SBA) ) Global Economy SMEs are significant contributors to the global economy (accounting for approximately 50% of local and national GDP, 30% of exports and 10% of FDI).Yet they appear to be under-represented in the international economy relative to their contribution to national and regional economies (Source: REMOVING BARRIERS TO SME ACCESS TO INTERNATIONAL MARKETS/ by OECD, 2008) 9