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The Role of the Private Sector,Soft Infrastructure and
Making Countries Competitive Beyond the roads and bridges
2010
Ms Patricia Francis Executive Director
ECOWAS Aid for Trade Meeting
World Bank’s Prospects for the Global Economy
Global Economic Prospects underestimated crisis
World 2009 2010 2011
GEP2008 3.6 … …
GEP2009 0.9 3 …
GEP2010 -2.2 2.7 3.2
High Income 2009 2010 2011GEP2008 2.6 … …
GEP2009 -0.1 2 …
GEP2010 -3.3 1.8 2.3
Dev. Countries 2009 2010 2011
GEP2008 7 … …
GEP2009 4.5 6.1 …
GEP2010 1.2 5.2 5.8
Sources: GEP 2008-10 (except interest rates and oil prices)
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ECOWAS Aid for Trade Meeting
Socio-economic Impact of the GFC for developing countries
Direct Social Impact (short term):
• Additional 76-90 million people living on less than $1.25 a dayduring 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, includingdirect 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
2007-2009 Export Earnings for LDCs
0
5000
10000
15000
20000
25000
30000
35000
40000
45000
US
D M
illi
on
s
All Products Crude OilSource: 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
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ECOWAS Aid for Trade Meeting
Medium-Term Impacts of Primary Commodity Prices in ECOWAS
Cocoa 45%Ores,
slag and ash8%
Rubber8%
Wood6%
Cotton4%
Rest29%
ECOWAS export composition, excluding mineral fuels
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
020406080100120140
0
100
200
300
400
500
US
cen
ts/lb
Copper -US cents/lb
Crude Oil -USD/barrel
US
D/b
arre
l
0
20
40
60
80
100
120
140
160
US
ce
nts
/lb
Cocoa - US cents/lb
Cotton - US cents/lb
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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)
Source: ITC TradeMapPlease 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.
Growth in Value Growth Rate
2008 Q1-3 2009 Q1-3
2007-2009
Q1-3 2008 2009 2007-2009
LDC 6.124 (4.047) 2.077 22% -12% 4%
LDC-WTO 4.979 (2.408) 2.570 21% -8% 5%
LDC non-
WTO 1.183 (1.730) (0.547) 28% -32% -7%
Developing
Countries 441.896 (716.974) (275.077) 18% -25% -6%
World 2,340.555 (4,348.331) (2,007.775) 17% -28% -8%
ECOWAS Aid for Trade Meeting
Crisis’ Impacts on Exports from Least Developed Countries
Table: Volume Changes for LDC Exports (2008-2009) – Excluding crude oil
Source: ITC TradeMapNote: Crude oil comprised 55% of LDC exports in 2008Reporting 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
Share of Exports
2008-2009
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%
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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
Germany 1 4.11
Singapore 2 4.09
South Africa 28 3.46
Senegal 58 2.86
Benin 69 2.79
Togo 96 2.60
Guinea 97 2.60
Haiti 98 2.59
Nigeria 100 2.59
Yemen 101 2.58
Niger 106 2.54
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Source: Connecting to Compete 2010Trade Logistics in the Global EconomyThe Logistics Performance Index and Its Indicators
COUNTRY Rank Index
Côte d'Ivoire 109 2.53
The Gambia 113 2.49
Ghana 117 2.47
Liberia 127 2.38
Botswana 134 2.32
Mali 139 2.27
Burkina Faso 145 2.23
Guinea-Bissau 149 2.10
Sierra Leone 153 1.97
Somalia 155 1.34
*Cape Verde N/A N/A
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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…
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• 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!
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.
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• 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.
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Our role in your success:
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
Connecting opportunities to markets
Our role in your success:
Mali Mangoes: Creating partnerships with producers in Mali and buyers in
Europe ITC has facilitated broadening markets for Mangoes and increasing export tonnage (2004-2009)
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
Delivering long term tangible benefits
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Women and Trade Programme 2009 - 2012Objectives:
• 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:
• 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)
•
SMEs are critical to the success of any country
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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 2004.
• 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 1996–2006 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 2006.
• (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)
SMEs are critical to the success of any country