Magazine article International Trade Forum

Trade Maps: Knowledge as Power and the Fast Fish

Magazine article International Trade Forum

Trade Maps: Knowledge as Power and the Fast Fish

Article excerpt

"For also knowledge itself," wrote English philosopher-statesman Francis Bacon in 1597, "is power."

In March 2004, Zambia's Deputy Commerce Minister Geoffrey Samukonga had a practical take on how knowledge brings power. "Unless you know what are the opportunities, the barriers, the suppliers, the distributors, the prices and the competitors for the products you want to sell, you cannot develop an effective export strategy," he told his country's business community.

In neighbouring Mozambique, the Export Promotion Institute's Director, Jose Fernando Iossias, had a linked message. "For decades in international trade the big fish have eaten the little fish," he said. "But now things are changing. Today it is the fast fish who eat up the slow ones." And the fast fish, in this context, are those who act quickly on market information.

According to experts on global markets, in the 2Ist century knowledge and speed in using it will go hand in hand in determining which countries, and which companies, become leaders in world trade. They are the ones who will break away from a traditional but precarious dependence on a limited range of products and find new niche markets that can help turn a declining community in a remote corner of one of the poorest developing countries into a focus of social regeneration.

Access to information in today's world, argues United Nations secretary-General Kofi Annan, can help make all the difference between progress and poverty. Examples are the creation of booming cut-flower export industries in China, Ecuador and Kenya, the emergence from nowhere over the past decade of Guatemala as the worlds top supplier of cardamom spice and its capture of a lucrative corner in the world market for dried limes, Tunisia's appearance in the 1990s as a major exporter of electronic components and South Africa's arrival on the scene at the turn of the 2Ist century as one of the world's largest exporters of transport equipment.

TRIUMPHS, BUT HOW FREQUENT AND AT WHAT COST?

But such triumphs are relatively few and they have often come at a heavy price - in the shape of large payments to international consultancy firms for studies aimed at identifying new markets, in the time and energy of management staff in small businesses obliged to spend days, weeks and months in research, and sometimes in the ceding of business control, and a large slice of the profits, to multinational firms, who have the resources on tap. Few individual farmers or smaller businesses in Africa, Asia or Latin America can contemplate such financial or human investment. So, many have preferred to "wing it" - acting on instinct, intuition and a bit of information picked up from the media. Very occasionally, this has worked. But more often it has led to failure for farms and firms, disaster for entire communities and setbacks for national economies.

"We needed a user-friendly, interactive tool, accessible from anywhere in the world, that could bring together statistics on who trades what with whom and for how much," says Friedrich von Kirchbach, Chief of ITC s Market Analysis section. Mr von Kirchbach, an economist with a doctorate in international investment flows, joined ITC in the mid-1980s with the aim of developing an accessible trade database.

MAKING TRADE TRANSPARENT

The project won enthusiastic support from ITC Executive Director J. Denis Bélisle. "I could see that something like this would not only be a tremendous resource for ITC client countries in Africa, Asia and Latin America," he says, "but could also make international trade almost totally transparent for the first time."

Using market statistics from the United Nations COMTRADE database, which collates figures on imports and exports reported to the UN by the national customs organizations of member countries, Mr von Kirchbach and Christian Delachenal, a statistician and programmer specializing in international trade, created TradeMap. …

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