Export Promotion in Developing Countries - JICA s Experience -
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1 Export Promotion in Developing Countries - JICA s Experience - 1st High Level Forum Industrial Policy Dialogue (Phase II) in Ethiopia Toru Homma Senior Advisor on Private Sector Development Japan International Cooperation Agency (JICA) [email protected] Addis Ababa, 11 January 2012
2 Contents of today s s presentation 1. Introduction: export promotion 2. Major approaches in export promotion assistance 3. Indonesia s case JICA s assistance and country s experience 4. Summary and major implications for Ethiopia 2
3 1. Introduction: export promotion Export promotion - a major part of private sector development Driving force of private sector led economic growth Export promotion - a wide variety of approach Not only incentive instruments but many approaches are available and complement each other Implementation on the ground Framework alone does not make change Capacity building for service delivery Customer-oriented, demand driven 3
4 Major approaches for export promotion - JICA s experience - Trade Policy Support Policy framework WTO/EPA related capacity building Exporter Export Promotion Organization capacity building Organization and planning Services (Market Info, Promotion, Linkages etc.) Export market Trade/Export Training Exporter competitiveness Export product competitiveness improvement Hard Infrastructure (Transport, OSBP, SEZ etc.) Trade Facilitation / Procedures Export infrastructure Soft Infrastructure (IPR, Standards & Conformance, Metrology, Statistics etc.) 4
5 Major approaches for export promotion - JICA s experience - i. Building of implementing capacity for export promotion 1) Organisation and planning 2) Service delivery capacity building ii. Export/trade training iii. Trade policy support iv. WTO, FTA/EPA v. Trade facilitation / trade related procedures vi. Other export related assistance: 1) export product competitiveness improvement, 2) soft infrastructure (IPR, standards & conformance, legal metrology, statistics), 3) hard infrastructure (transport, OSBP, SEZ) 5
6 2-i. Building of implementing capacity for export promotion 1. Organization and planning Ministry-internal organization/department? or export promotion agency? or overarching body? Necessary functions and action plans 2. Service delivery capacity building Market information services Promotion services Linkage/networking services etc. 3. Assistance in the past Indonesia NAFED, Malaysia MATRADE, Lao DPR Trade Promotion Project, Egypt EEPC, Dominican Republic, Guatemala AGEXPORT etc. 6
7 Export promotion organizations (Asian examples) Source: JICA (2009) Final Report: The Strengthening of Export Promotion Organization in the Republic of Indonesia 7
8 2-ii. Export/trade training Most conventional JICA s assistance in the trade sector Conducted at newly established / existing export training centers in developing countries Targeted exporters / potential exporters (mostly SMEs) Provide trainings and TOTs Various training courses: export procedure, pre-export inspection, export product value addition Assistance in the past: Indonesia IETC, Kenya EPC, Egypt FTTC etc. 8
9 2-iii. Trade policy support Dispatching trade policy advisor in responsible ministry/agency: Indonesia, East Timor, PNG, Mongolia, Pakistan, Madagascar Economic/Industrial policy support program (dialogue) sometimes include export promotion component Training in Japan Training in third countries (ex. Japan-Singapore Training Programme on Trade and Investment Promotion for APEC Economies) 9
10 2-iv. WTO, FTA/EPA 1. APEC WTO Capacity Building Program ( ) Indonesia, Malaysia, Philippines and Thailand Ministerial function, AD/CVD/SG/DSU, GATS, TRIPS, TBT Workshop, training, training material, system development 2. Group Training Course on WTO in Japan Implementation of WTO Agreements in Africa 3. Free Trade Agreement (FTA) / Economic Partnership Agreement (EPA) Project for the Strengthening of the Utilization of IJEPA (Indonesia) 10
11 2-v. Trade facilitation / trade related procedure Analysis of cargo and document procedures for import/export Time study and productivity improvement Web-based trade rule book, database, manuals Dialogues on trade related regulations and export promotion facilities Coordination with customs / inter-ministerial coordination One Stop Border Post (soft component) 11
12 2-vi. Other export related assistance 1. Export product competitiveness improvement MSME development (Kaizen, OVOP, design/brand/packaging etc.) 2. Export related soft infrastructure Intellectual Property Rights (IPR), standards & conformance, legal metrology, trade statistics etc. 3. Export related hard infrastructure Transport infrastructure, One Stop Border Post, Special Economic Zone (SEZ) etc. 12
13 3. Indonesia s s case JICA s assistance and country s s experience Facts: 240 mil. population, export value $157 bil. (2010), economic integration (ASEAN & APEC) Traditionally deep ties with Japan both in public/private: EPA, East Asian industrial network, largest ODA recipient All the menus are available here Significant contribution by Indonesian side 13
14 Indonesia s s policy instrument menu for export promotion in 1980s a. Type 1: Primary product processing (eg. Plywood) Regulation on raw material export Investment incentive on domestic production Export incentive on processed wood (cheap credit, drawback) b. Type 2: Transforming from IS to EO (eg. Textile) Regulation on product import (tariff up) Tariff down for material import; Investment incentive on domestic production; Export incentive on textile (cheap credit, drawback) c. Type 3: Processing deal (eg. Semiconductor) Incentive on parts import Export incentive on product Source: Yamazawa and Hirata ed. (1987) Hatten Tojokoku no Kogyoka to Yushutsu Shinko Seisaku (in Japanese: Industrialization and Export Promotion Policy of Developing Countries) 14
15 3. JICA s continuous support for Indonesia s s export promotion i. Export promotion ii. Trade training iii. WTO capacity building iv. EPA socialisation and utilisation strengthening v. Trade facilitation / trade related procedures vi. Other export related support: export product competitiveness improvement, trade related infrastructure (hard and soft) 15
16 3-i. Export promotion (Indonesia) Cooperation with National Agency for Export Development (NAFED) a. Project for Establishment and Capacity Building of Regional Export Training and Promotion Centers (RETPCs) ( ) b. Study for Strengthening of Export Promotion Organization ( ) c. Project on Service Improvement of NAFED ( ) 16
17 3-i-a. Project for Establishment and Capacity Building of Regional Export Training and Promotion Centers (RETPCs( RETPCs) ) ( , 2006, Indonesia) Established four RETPCs in four cities (buildings/facilities are prepared by Indonesian side): Surabaya, Medan, Makassar and Banjarmasin Provide export training, trade information and promotion services to SMEs in the respective regions Related Institutions: NAFED, IETC, Provincial Governments Directorate of Industry and Trade (East Java, North Sumatera, South Sulawesi, South Kalimantan) 17
18 Regional Export Training and Promotion Centers (RETPCs( RETPCs) (buildings and facilities are provided by Indonesian side) RETPC East Java (Surabaya) RETPC North Sumatra (Medan) IETC (Indonesia Export Training Center) (Jakarta) RETPC South Sulawesi (Makassar) Source: JICA (2006) RETPC South Kalimantan (Banjarmasin) 18
19 Facilities of RETPCs (basically provided by Indonesian side) Mini-Display Class Room Auditorium Business Library Source: JICA (2006) Computer Room 19
20 3-i-b. Study for Strengthening of Export Promotion Organization ( , 2009, Indonesia) Analysis Comparison of optimum organizational structure (the next slide) Action plans (the following slide) Pilot projects Recommendations 20
21 Comparison of optimum organizational structure for export promotion For Indonesia, service-oriented was recommended. Why? Source: JICA (2009) Final Report: The Strengthening of Export Promotion Organization in the Republic of Indonesia 21
22 Proposed action plans for NAFED = Possible menu Market Information Service A01 Review incl. website design A02 Market intelligence capacity A03 Value-added market info Service A04 Buyers list improvement A05 Exporters list improvement Export Promotion Service A06 Customer service center establish A07 Free membership service: Club A08 Business partnership program A09 Export Market Dev. Grant scheme A10 Industrial cluster dev. program A11 Dialogue w/ major export industries A12 Inter-ministerial meeting Product Development Service A13 Design/brand development capacity A14 Design/brand awareness for SMEs A15 SME design/brand dev. training A16 Design-related information service A17 Matching SMEs and designers Network and Alliance A18 Government support desk A19 Support for RETPCs & alumni A20 NAFED regional information desk A21 Service providers partnership A22 Export education for awareness Organizational/Manage system A23 Organizational restructuring prep. A24 Evaluation system establishment A25 ISO9000-base management system A26 HR management system A27 Renewal of visual identity Source: JICA (2009) Final Report: The Strengthening of Export Promotion Organization in the Republic of Indonesia 22
23 3-i-c. Project on Service Improvement of NAFED ( , 2015, Indonesia) Outputs (*NAFED renamed as DGNED) 1. NAFED organization reform is expedited 2. Market Information Service of NAFED intended for export SMEs is improved 3. Export Promotion Service of NAFED intended for export SMEs is improved 4. Product Development Service (Brand/Design Promotion) of NAFED intended for export SMEs is improved 5. Networking and alliance function among NAFED and domestic export promoting organizations are strengthened 23
24 3-ii. Trade/export training (Indonesia) JICA s Technical Cooperation with IETC (Indonesia Export Training Center) Phase 1 Project ( ) Export training; business Japanese language; inspection and quality control; exhibition training Follow Up Project ( ) Phase 2 Project ( ) Human Resource Development in Trade Sectors Project Formulate and device training program RETPCs Project ( ) Continued cooperation as a host of various JICA training courses Source: JICA (2006) et al. 24
25 Export Training Face to Face Training Distance Learning Source: JICA (2006) Training utilizing IT 25
26 3-iii&iv. WTO, FTA/EPA (Indonesia) a. Study on Capacity Building for Implementation of the WTO Agreements ( ) Dispatch Consultants for multiple ministries Components: Anti Dumping (AD), Trade in Services (GATS), IPR (TRIPS), Technical Barriers (TBT) etc. WTO related Pilot Information System Development Series of Workshops Follow up Trainings in Japan and Indonesia b. Training on WTO Capacity Building in Japan c. EPA socialization seminars d. Project for the Strengthening of the Utilization of Indonesia-Japan EPA (IJEPA) Analyzing skill for EPA s economic impact Promotion of utilization of IJEPA Management capacity development of IJEPA 26
27 3-v. Trade facilitation / trade related systems a. Study on Trade Related Systems and Procedures ( ) Analysis of cargo and document procedures for import/export through time study to map obstacles Master Plan Recommendation and Workshops b. Project for Improvement of Administration of Trade Related Regulations, Systems and Procedures (PROTRAF) ( ) Implementation stage targeting at Tanjung Priok Port Trade rule book (web-based), productivity improvement, HRD etc. c. Project for Capacity Development for Trade-related Administration ( ) Regulations, database, manuals, dialogues on export promotion facilities etc. 27
28 3-vi. Other export related assistance 1. Export product competitiveness improvement Various projects on SME development (cluster development, design/packaging, SME management consultant etc.) 2. Export related soft infrastructure Intellectual Property Rights (IPR), standards & conformance, legal metrology, customs, trade statistics etc. 3. Export related hard infrastructure Transport infrastructure (road and port), Special Economic Zone (SEZ) etc. 28
29 4. Summary and implications for Ethiopia for Ethiopia A variety of approach for export promotion are available: not only incentives and facilities Policy framework, export promotion organization, exporter competitiveness building, hard/soft infrastructure --- these major pillars should be comprehensively considered Inter-ministerial coordination: as several ministries are involved in export promotion Export promotion organizations/agencies/directorates: what form is more appropriate and suitable? This should be carefully considered Capacity building aimed at actual implementation on the ground Market-oriented and demand-driven Promote Ethiopia = promote export! 29
30 Amesegenalew Thank you JICA s VISION Inclusive and Dynamic Development 30
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