Boosting exports from Peru's northern corridor
A three-year, Swiss-funded, US$ 1.66 million export development project is supporting Peru’s efforts to accelerate development through trade, by strengthening the capacity of TSIs in the northern corridor to provide business development services that meet the needs of agribusiness exporters. ITC is working with two national partners, the Ministry of Foreign Trade and Tourism, and PromPerú, the Export and Tourism Promotion Board, as well as a network of local TSIs such as chambers of commerce, universities and educational institutions and other private service providers.
The eight regions covered by the project – Amazonas, Cajamarca, La Libertad, Lambayeque, Loreto, Piura, San Martin and Tumbes – together contributed 20% of Peru’s’ GDP in 2009 and 23% of its exports. However, the country’s northern corridor has historically lacked an efficient trade support network providing export development services to agribusiness exporters, according to Alberto Sanchez, PromPerú coordinator in Lambayeque. Furthermore, he said, coordination is limited on export development between the public and private sectors at the national and regional levels, and among the regions themselves.
To address this issue, the project set up a policy dialogue component, bringing together the key actors from the eight regions to agree on common priorities for export development and to report these to the national authorities. The topics identified included: quality as a productive need for the exports from the region; organizational and associability problems in the productive sector; and access to energy supply for the productive sector.
‘Many TSIs in the northern corridor don’t know their own weaknesses,’ Sanchez said. ‘We like to work with projects like ITC’s because it helps us to improve our competitiveness. Hopefully, the economy in the north will continue to grow and, with the support of ITC, TSIs will be able to support companies to grow.’
Most producer associations in the northern corridor need to improve their capacities in areas ranging from decision- making and strategic planning to finance and human resource management, according to Augusto Vasquez, Certification Manager at the Querecotillo Association of Small Organic Banana Producers in Sullana, Piura.
The project aims to strengthen the capacity of TSIs in the region to help SMEs better understand and implement food safety systems based on Hazard Analysis and Critical Control Points (HACCP), a systematic, preventive approach to food safety. In 2012, 10 agriculture and agroprocessing enterprises in Chiclayo and Piura received training on food safety standards and HACCP. In four seminars between April and December, 10 trainer-cum- counsellors were coached on using ITC methodology and its training pack on HACCP. They were also taught about the need to improve food safety and its implications for world trade, which is vital since importers in Asia, Europe and North America all demand certified quality control. The trainers, in turn, will use their experience and knowledge to train other SMEs in applying HACCP after the project ends in 2014.
The northern corridor, which accounts for ‘80% of the riches of Peru’, according to PromPerú’s Sanchez, also boasts a vibrant handicraft industry and grows a wide assortment of fruits and vegetables, such as asparagus, lime, avocados and beans, that it is keen to sell overseas.
"Many TSIs in the northern corridor don’t know their own weaknesses. We like to work with projects like ITC’s because it helps us to improve our competitiveness. We need to expand our relationship with ITC. We need more training. This is very important for us as we need to grow like an institution, and ITC helps us." Alberto Sanchez, PromPerú coordinator, Lambayeque
The country’s economic performance has traditionally been tied to exports, which provide hard currency to finance imports and external debt payments. But while exports of goods such as copper, gold, zinc, textiles and fishmeal have provided substantial revenues, self- sustained growth and a more egalitarian distribution of income have proven elusive. Still, poverty in the country of 29 million people has steadily declined in recent years from more than 44% in 2006 to about 31% in 2010, according to the World Bank.
The ITC initiative has helped the economics school at Santo Toribio de Mogrovejo University in Lambayque to move closer to achieving its goal of upgrading the quality and breadth of its consultancy services to SMEs. During their work helping companies to access government funding for technological improvement, staff discovered that SMEs have a need for legal advice and the collection and analysis of data, according to Julia Maturana, the economics school’s director.
‘We are also writing a proposal for funds to go further,’ she said. ‘We want to have an office specifically for this work, to focus all the efforts, because we want a physical place and a team with a very clear vision and mission. We were working on this before, but in a very scattered way. This framework helped us to organize as a unit.’
Peru illustrates the logic behind the ITC ‘one-to-one-to-many’ approach and how it helps ensure sustainability.
The project institutionalizes successes and lessons learned with the aim of producing a lasting, positive effect on Peru’s economy through a stronger and more diversified export sector, and it has had a demonstrable impact.
‘We now work with different tools in the international markets and we know better how to meet standards,’ said Sanchez. ‘Our expectations are very positive. We, as an institution, and the enterprises need different tools to help us to improve the product and the presentation to sell to international markets. We need to expand our relationship with ITC. We need more training. This is very important for us as we need to grow like an institution, and ITC helps us.’