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Enhancing trade between Arab and African countries
Troisième Réunion des Chambres de Commerce et d’Industrie
d’Afrique et du Monde Arabe ,Rabat – Maroc, 29-30 Novembre
2012Dr. Azza Morssy ,
Chief of Middle East &Arab Programme , UNIDO (Vienna)
UNIDO & Global TradeUNIDO is enhancing the capacity of developing countries and countries with economies in transition to participate in global trade and integrate them into global value chains through effective participation in the based- rules of global trading system
2
Aid for Trade and UNIDO“The UNIDO trade capacity approach
and the Aid for Trade Initiative are complementary endeavors along the same holistic line of thought”
Kandeh Yumkella, Director-General, UNIDO
3
Source: UNIDO 2009
Trade & Poverty reduction
Reduction of trade costs
Increases competitiveness of firms
Improved export performance
More trade creates jobs and income opportunities
Economic growth
4
Source: World Bank 2012
Africa: Economic Profile
• The near-term outlook remains positive in the post-crisis period
• Africa will have the world’s largest workforce by 2040 (approximately 1.2 billion) and will need to create a sufficient number of jobs
5
Source: UNIDO 2009
Africa’s main exports• Fossil fuels (petroleum, hard coal, and
natural gas) are main exports• Fossil fuels - total exports increased
from 72% in 1980 to 75% in 2008, ( above the global average of 50%)
• In physical terms, all African countries account for about 10.5% of fossil fuels supply to the world market
6
Source: UNCTAD 2012
1. Africa’s share of global international trade 2000-2010, (%)
7
Source: UNECA 2012
Industrial Challenges for SSA and MENA
• Several countries in SSA are affected by deindustrialization
• Several countries in the MENA are affected by the middle-income trap
8
Exports by Product (MENA)
9
Source: WTO 2012
Common Growth ProspectsBoth regions are expected to continue their economic recovery to pre-crisis levelsThe MENA region is expected to accelerate its economic growth to 5.1% in 2012 In Sub-Saharan Africa (SSA) growth is projected to grow at over 5% in 2012 as well
Source WTO2012
10
The middle-income trap
It affects “countries unable to compete with low-income, low-wage economies in manufactured exports and with advanced economies in high-skill innovations … such countries cannot make a timely transition from resource-driven growth, with low cost labor and capital, to productivity-driven
growth”. 11
Source: ADB 2012
Source: ILO 2010
13
Jordan Lebanon Morocco Qatar Saudi Arabia
Syria Algeria Tunisia West Bank and Gaza
0
5
10
15
20
25
30
Unemployment Rate by Education Level
Basic
Intermediate
Advanced%
14No.14
Global Trade ChallengesSUPPLY SIDE:“LDCs have neither the surplus of capacity of exportable products nor the production capacity to take immediate advantage of new trade opportunities”Kofi Annan - UN SG, Financial Times, 5 Mar. 2001
CONFORMITY:
Countries that can not meet standards and regulations in developed country markets are effectively barred from trading with those markets. International Development Research Centre (IDRC), Canada
Trade facilitation/infrastructure: For the majority of African countries, tariffs amounted to less than 2%, while transport cost often exceeded 10%.
World bank trade note 15; may 10, 2004
15No.15
“Countries must have COMPETITIVITY of productive capacities
“Products must conform to requirements of clients and markets” CONFORMITY with standards
“Rules for trade must be equitable and customs procedures harmonized” CONNECTIVITY to markets
PRODUCTIVITY (enterprise) COST OF EXPORTING (support services)
Compete Conform Connect
Challenges for Trade : The 3 Cs
The Arab World: Economic Profile
• Economic growth in the Arab world slowed significantly with the global financial crisis
• Urgent need to create 2.8 million jobs every year
16
Source: Arab Competitiveness Report 2011-2012
Africa and world trade• African countries are net suppliers of
resources to the world • In 2008, net exports of materials by the
region were 409 million tons, compared to 284 million tons in 1980
• Since 2000: significant increase in demand for Africa’s resources by developing countries such as Brazil, China and India
17
Source: UNCTAD 2012
Rapid GPD Growth
MENA countries as a whole grew by 5.2%from 2000 to 2008,
whereas OECD economies grew by only 2.4%
18
Source: Arab Competitiveness Report 2011-2012
19
1980
1982
1984
1986
1988
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
2010
0
10
20
30
40
50
60
Exports and Imports in the Arab World (% of GDP)
Exports of goods and services (% of GDP)Imports of goods and services (% of GDP)
% o
f G
DP
Source: World Bank 2012
Industrial challenges
• As Justin Lin (2012) suggests, income growth in developing countries depends on upgrading industrial structures
• Whereas Arab and African countries are major exporters of fuels and mining products, other Regions are major exporters of manufactured goods 20
Exports by Product (Africa)
21
Source: WTO 2012
22
22
The Triangle Trade
capital
profits
aid
Raw materials
Loans Multinational Africa
Developed countries
Payement of débats and interests
WB
IMF
23No.23
Strategic Partnerships for Trade Capacity-Building
24No.24
Potential in Agro-Food area
WTO- TBT & SPS agreements compliance
Products sourced from areas free of pests & diseases Fruits/vegetables - minimum pesticide residue
standard Meats/fish meet minimum antibiotic residue
requirement Standards of hygiene applied in manufacturing
HACCP/ISO 22000) /lack of implementation capacity the above
issues by developing
countries
Pre-conditions for Exports :
Regulatory Environment for Compliance WTO -TBT /SPS Agreements (Jan 1995)
25No.25
“Fair Trade for All”:
“lack the ability to meet quality Standards Requirements,”“UNIDO recommends the following priority areas for assistance :
1. A national/regional standards/standardization body
2. A national/regional metrology system3. A certification/conformity assessment 4. An accreditation system”
Source: J. Stiglitz & A. Charlton, Fair Trade for All – How Trade can promote Development, Oxford University Press, 2005
Africa Aid
26
Increased Aid to Africa
More funds for Investment and Trade and build capacity in several sectors that will boost
production, marketing of products and service
Proper transparency and accountability of the donor and recipient governments
Proper planning, monitoring and implementing projects that will result in a positive multiplier effect for general development
UNIDO inputs/ AfricaSupport to the National Prevention Programme of Ochratoxin in Coffee and Cocoa in Côte
d’Ivoire
27No.27
Objective: help the supply-chain actors to secure their incomes and exportationsOutputs:
- studies in coffee and cocoa supply-chains (determination of contamination levels, identification of critical contamination points, and determination of adequate sampling methods);
- national OTA analytical laboratory upgrading for ISO/IEC 17025 accreditation- promotion of good practices during production and post-harvest stages- Lobbying activities to draw the attention of the EC on adequate OTA maximum
levels.* The OTA is a mycotoxin considered as a genotoxic human carcinogen and the European Commission (EC) is examining the opportunity to raise new maximum contamination levels for green and roasted coffee, cocoa and cocoa based products
28No.28
Barrier to Trade Survey : Study on SPS Compliance for Exports
Standards (PSQCA) Standards development /Certification Body (Systems)• Consumer affairs/ Product certification
Metrology (NPSL)• Lab upgrading, international accreditation
Product Testing (MFD, PCSIR, etc): Fisheries, Food, Leather, Textile
• Lab upgrading, PT participation• International accreditation
Accreditation (PNAC)• Organizational strengthening, international recognition• National accreditation scheme /Training of auditors• Setting-up of PT schemes
Quality/Hygiene (Private sector, FPCCI, etc.) Fish/food• Management systems/Good practices /Compliance with market
requirements Pilot certifications HACCP, ISO 9001, 14001, SA 8000)• Pilot traceability systems
Boat hygiene
Icing
Landing Sites
Inspection
Auction Hall
Processors
Traceability
Trade related technical assistance programme
UNIDO Aid-for-Trade type Programmes (Supply-side & Conformity)
29No.29
UNIDO TCB - LDCs Coverage (36 countries)
Regional Programmes
SAARC
Afghanistan
Bangladesh
Cambodia
Ethiopia
Mozambique
Nepal
Senegal
Tanzania
UEMOA/ECOWAS
MEKONG
Country Programmes
EAC
Madagascar
Mauritania
Source: OECD DAC List
EACUganda
Tanzania
Burundi (2007)
Rwanda (2007)
SAARCBangladesh
Bhutan
Maldives
Nepal
MEKONG Delta Countries
Cambodia
Lao PDR
CARICOMHaiti
CARICOM
Haiti
SADC
UEMOA/ECOWASBenin
Burkina Faso
Cape Verde
Gambia
Guinea
Guinea Bissau
Liberia
Mali
Niger
Senegal
Sierra Leone
Togo
SADCAngola
Congo
Lesotho
Madagascar
Malawi
Mozambique
Tanzania
Zambia
CEMACCentral African Rep.
Chad
Congo
Equatorial Guinea
CEMAC
On-going and planned
GDP Growth by Region (percent change, constant prices)
30
Source: Arab Competitiveness Report 2011-2012
UNIDO &Supply Side 1/2
31
Identifying sectors
and products that have competi
tive potential and are suitable for local
value addition
Analyzing and
assessing trends in industrial performa
nce at national, regional and global level, and
Formulating strategies
and policies designed to
improve industrial
competitiveness and to
overcome technical barriers to trade (TBT) and comply
with sanitary and
phyto-sanitary
measures (SPS).
Assisting in
upgrading manufactu
ring processes in sectors with high-
export potential
to internation
ally acceptable
levels.
UNIDO will continue to support enterprises in their efforts to offer competitive, safe, reliable and cost-effective products in world markets, this requires:
build up the national and
regional quality
infrastructure needed to
provide internationally
recognized quality
assurance services, standards,
product testing facilities and calibration
laboratories,
32
UNIDO is continuing to offer the following activities :2/2
Creation of quality management systems
and product traceability management system
certification, inspection and accreditation
mechanisms
A New Vision for Trade Facilitation
Competitiveness
• Export Promotion
• Meeting int. standards
Physical Infrastructures
• Roads, ports, etc.
• Telecommunications
Logistics and Transport Services
• Promoting competition
Customs-Border- Transit- Management
33
Traditional focus of trade facilitation
The Aid for Trade Agenda
Trade policy and regulations
Trade-related technical assistance and capacity building
Trade-related infrastructure
Building productive capacity
Macroeconomic and microeconomic adjustment
34
Source: OECD 2012
35
Conclusions Developing Compliance Infrastructure is
complex – tailor programmes Regional cooperation programmes are
needed for developing Regional Capacity building on complying with standards
Compliance Infrastructure3 pronged: Competitive supply – Compliance
services - Connectivity
Recommendations
1. Improving cross-border trade: border procedures, traders’ associations, flow of information
2. Removing a range of non-tariff barriers to trade: import and export bans, costly licensing procedures, restrictive rules of origin
3. Reforming regulations and immigration rules: limits to the potential for cross-border trade and investment in services
36
Source: World Bank 2012
Trade-related opportunities for Africa and the Middle East
• Regional cooperation can contribute to closer integration beyond trade
• More open trade in food staples can reduce food insecurity
• Additional trade can increase competitiveness in regional value chains
• Grant access to the increasingly global value chain production
• Achieve common positions and represent these interests in the international arena
37
Thank you for your esteemed attention!
Azza Morssy, PhD Chief, Middle East and Arab Programme Bureau for Regional Programmes Programme Development and Technical Cooperation Division United Nations Industrial Development Organization (UNIDO) Vienna International Centre P.O. Box 300 1400 Vienna, Austria Tel: +43-1-26026-3841 Fax: +43-1-26026-6848 E-mail : [email protected]
•
38
TRADE & ECONOMIC GROWTH
ANNEXES
39
Exports of all goods, non-petroleum and non-natural goods
40
Source: World Bank 2011
World Exports by Product
41
Source: WTO 2012
Value Added in Selected Regions (2009)
42
Source: OECD 2011
Value added in the MENA region (2009)
43
Source: OECD 2011
Oil production and the MENA• World crude oil production increased by
60% from 1971 to 2010
• The MENA region holds about 65% of the world’s proven conventional oil reserves (at the end of 2010)
• In 2010, the Middle East region’s share of oil production was 30% of the world total
44
Source: OECD 2011
Production of Crude Oil by Region (million tonnes)
45
Source: OECD 2011
Oil revenues continue to mount through 2014 (billions US$)
46
Source: World Bank 2012
Oil exporters in the MENA (current account balances, billions of US$)
47
Source: IMF 2012
Oil importers in the MENA (current account balances, billions of US$)
48
Source: IMF 2012
Africa’s material imports• Fossil fuels are the dominant material imports, with
a share between 33 and 37% of total imports
• The world average share of 50 to 55% of fossil fuels in total imports
• All African countries together import about 100 million tons of fossil fuels, (2% of global imports of fossil fuels
• Africa is a net importer of renewable resources
49
Source: UNCTAD 2012
Physical trade volume in Africa and the world, 1980-2008
50
Source: UNCTAD 2012
Material extraction in Africa, by category, 2000-2008
51
Source: UNCTAD 2012
Material extraction in selected African countries, by material category, 2008
(millions of tons)
52
Source: UNCTAD 2012
Africa’s share of global production and reserves of selected minerals
53
Source: UNCTAD 2012
2. Industrial development and per capita resource use in Africa (2008)
54
Source: UNCTAD 2012
Population, output and carbon emissions, across regions, in 2009
55
Source: International Energy Agency 2011
GDP and GDP per capita growth (2009/2010)
56
Source: Arab Competitiveness Report 2011-2012
MENA Exports as a Share of GDP
57
Source: Arab Competitiveness Report 2011-2012
Goods exports destinations (individual countries)
58
Source: Arab Competitiveness Report 2011-2012
FDI Inflows in the MENA (as a percentage of the total)
59
Source: Arab Competitiveness Report 2011-2012
FDI Inflows as a Share of GDP
60
Source: Arab Competitiveness Report 2011-2012
FDI by Economic Sector (cumulative 2000-07)
61
Source: Arab Competitiveness Report 2011-2012
World Proven Oil Reserves by Region (2010)
62
Source: Arab Competitiveness Report 2011-2012
MENA proven crude oil reserves by country (2010)
63
Source: Arab Competitiveness Report 2011-2012