enhancing trade between arab and african countries troisième réunion des chambres de commerce et...

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 : a.morssy@unido.org

•  

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