Enhancing export supply capabilities of developing countries

Sustained export growth of the developing countries depends crucially on two major parameters: an open international trading system offering the fullest access to export markets, and the existence of internationally competitive supply capabilities in the developing countries. Many developing countries still face the task of building internationally competitive production bases with efficient agricultural, manufacturing and services sectors. The main impediments these countries face on the supply side include: lack of investment resources (including external financial resources); shortages of skilled labour; insufficient technological capabilities; inadequate physical infrastructure; and insufficiently developed services sectors (providing services such as banking, telecommunications, transportation, marketing and distribution for the manufacturing and agricultural sectors). These problems may remain difficult to overcome because of the lack of an enabling environment resulting from inappropriate policies and cumbersome procedures. Also, lack of political stability and continuity in government policies can be a stumbling-block as they do not allow for the longer-term planning horizon needed by entrepreneurs and policy-makers in fostering the development of internationally competitive supply capabilities.

Although the responsibility of developing an export supply capability rests essentially on the developing countries themselves, international assistance, whether bilateral or multilateral, has an important role to play. The nature and extent of assistance required or needed to enhance this export supply capability vary from country to country, depending upon economic circumstances, particularly the development stage of industries and institutions. An attempt is made in this chapter to describe these needs and requirements.