General Statement by J. Denis Belisle

Executive Director, International Trade Center UNCTAD/WTO

At the Third United Nations Conference on Least Developed Countries

As participants to the May 16 parallel event of the Third U.N. Conference for LDCs are aware, the International Trade Center's principal contribution to this meeting consisted in organizing a Business Sector Round Table that brought together 75 exporters and senior policy-makers from LDCs. Our objective was to have these 75 individuals share among themselves and with us their personal experience - successful or not - including the main challenges they met as exporters in a globalized economy. The Government of Norway provided critical financial support for this effort. UNCTAD and the Institute of Leadership Development financed the participation of a number of participants. I wish to thank them very sincerely.

When my colleagues and I began preparing for this important meeting a few months back, we had questions about how LDCs were fairing in this new environment. Our findings have given us hope.

What we found is that behind the obvious, somewhat old story - namely, the loss of LDCs' market share in world trade resulting from the price collapse of raw commodities - there is a new, more hopeful and more exciting grassroot story. This is the story of a new generation of LDC entrepreneurs and investors that are finding ways to leverage the opportunities created by global trade liberalization to start rebuilding their countries' export base.

We had given ourselves an initial target of finding as many as 50 entrepreneur success stories. Some believed we would have trouble meeting our own target. Events proved them wrong. We found at least twice as many. We simply did not have resources to bring everyone here so we settled on bringing 25 of those entrepreneurs - preferably each with a different story to teach us. We ask our 25 entrepreneurs to help us weave a story of both difficulties and challenges, but also hope and success in the context of a Business Sector Round Table that was held Wednesday afternoon.

We have learned three lessons.

The first lesson is that the new export opportunities, for the most part, have little to do with those of the past. They are about finding niche products for niche markets, moving up the value chain through processing and design, responding to the ever-rising demand from consumers for higher quality standards, entering brand new markets like services, or shortening distribution chain to capture a greater share of the value. To illustrate, they are about high-end stationary paper made from natural fiber in Nepal for the European market, parika powder from Zambia for the North American market, hot-sauce exports from Malawi to India and Europe, essential oils from Haiti for the growing global cosmetics industry, garments from Mozambique for the South African market, fresh-cut flowers from Ethiopia for the German and French markets, frozen seafood from Cambodia for Australia, Japan, or the European Union, tourism services from Tanzania or Bhutan to visitors from all over the world, Internet video streaming software technology from Nepal for North American customers, and so on.

The second lesson is that the trade liberalization efforts of the past decade have helped enormously in opening up many of those new opportunities. On the other hand, LDC exporters, at times, also continue to see their efforts frustrated by certain barriers in importing countries. Work must continue on lowering barriers especially those barriers that are significant to LDC exporters. But on balance, LDC exporters are telling us that opportunities have improved over what they used to be.

The third lesson from the exporters - confirmed by public officials with us at the Business Sector Round Table - is that there is a lot Government and Business together can and must do, in their respective countries, to improve the environment for many other entrepreneurs to emerge and grow.

Again, allow me to sum up some of the points made by the exporters.

Exporters tell us that their countries have made great strides in improving the macro environment for business. Taxes that used to discourage exports have been reduced, if not altogether eliminated. Inflation has been brought under control and overvalued exchange rates are mostly gone. Investment returns are becoming more predictable and exports made easier. Investment frameworks have become more understanding of the needs of businesses. To be dire, more remains to be done including often on the legal and good governance front. Enforcement of the vile of law, including enforcement of
contracts and elimination of corruption, often remain problem areas for business.

Exporters also tell us that much needs to be done to improve the support infrastructure for exports. I am talking not only about the obvious hard infrastructure of roads, airports, seaports, energy, water, telecommunications, but also the support services that are keys to improving the competitiveness of export enterprises: trade financing services, quality management services, trade information, trade promotion, match-making services, trade facilitation including customs inspection and customs clearance;, trade documentation, and so on. Here the exporters are clear: their countries do require technical advice and assistance for national capacity building.

Another important point made by the exporters is that, next to working on improving the enabling environment, there is a great need for their governments to focus efforts and resources on a limited number of priority sectors. This, so that the export development drive can be effective and successful.

Last, the exporters are sharing with us another very hopeful message. Their message is that their work on the export front can help attack poverty in their country by bringing income and jobs directly to the poorest in their society. We have heard about specific examples such as the 30,000 contract farmers producing paprika in Zambia, the hundreds of home carpet and pashmina weavers in Nepal, the 27,000 families growing vetiver (an ingredient for essential oil) in Haiti, the tobacco growers in Cambodia, and so on.

We are hearing this exciting message of hope from our export partners in LDCs. While these export success stories are still relatively few, we see them as precursors of many more to come.
We, at ITC, stand ready to help you- governments, exporters, business associations, trade support institutions - in whichever way you feel we might help you develop your capacity so that the exceptional success stories we have heard about and learned from over the past few days become more the rule than the exception.

Thank you.