How Can Developing Countries Benefit More from the Multilateral Trading System? (Trade as a Tool for Development)

Article excerpt

ITC firmly believes in trade as a tool for development. In order for developing countries and transition economies to increase their participation in global trade, they need to focus on three export prerequisites: market access, marketable goods and services to export and export skills. (Trade as a tool for development)

A great deal is being said about globalization and what developing countries and transition economies should do to participate more fully in the world economy. But what specifically needs to be done? In my view, there are three pre requisites to enable developing countries to fully participate in the world economy. They are:

* market access;

* goods and services to export; and

* export skills.

Changing scene

Market access is negotiated between countries. In the past it has often been difficult for developing country suppliers to obtain access to markets in industrialized countries, which have tended to favour their own country's suppliers. This is changing. Recent initiatives by the European Union, the United States and the Fourth World Trade Organization (WTO) Ministerial Conference in Doha, Qatar in November are providing new impetus to substantially increase market access for developing countries in areas where they can best compete.

The second requirement is having marketable goods and services to export. These result from creativity, innovation, technology and capital investment which are critical elements for success.

Creativity exists in abundance in developing countries. Indeed, time and time again, these countries have found highly innovative and imaginative ways to tackle situations that are dealt with more traditionally by industrialized societies. Putting this capital of imagination and creativity to work for export is something developing countries need to do more systematically.

The cost of access to technology, particularly new information technology (IT) is falling all the time. Last year, the Executive Forum organized by ITC in Montreux, Switzerland, focused on "Export Development in the Digital Economy". It gave plenty of examples of developing country exporters who have entered world markets through the creative use of information technology.

The key: good ideas

Capital is equally important. Even in these difficult times, it is interesting to see how much capital from around the world is being directed at seeking out good ideas, large numbers of which will be found in developing countries.

I believe this is a trend that will both continue and strengthen in coming years. There was a time when big firms, or big fish (for the sake of illustration) used to eat small fish; nowadays fast fish eat slow fish and these fast fish are found in both North and South. Fast fish are the result of creativity, innovation, technology and capital.

In my view, this is where developing countries have a unique opportunity to win a greater share of the global economy. ITC can help these countries improve their responsiveness to new demands by assisting with identifying new markets, pointing to opportunities to adapt and diversify products and by focusing entrepreneurs' attention on the export potential of the services sector, which is one of the fastest-growing areas of world trade. This will be further enhanced by the use of appropriate information technologies. As a result of improved telecommunications coverage, it is foreseen that increasingly many call centres, back office services, information services, as well as data-entry and processing functions will be located in developing countries.

Export skills

The third requirement for countries to be able to succeed in export markets is possessing both export skills and the ability to deliver export products and services. These are just as important as market access, since on its own, market access makes little difference. …