Features

Fifty years of positive development impact

30 June 2014
ITC News
From four employees and budgets of US$ 50,000, ITC today has nearly 300 staff and planned expenditure more than US$ 90 million

When the secretariat of the General Agreement on Tariffs and Trade (GATT) created the International Trade Centre (ITC) in 1964, it provided it with four employees and an annual budget of US$ 50,000. In 2014, the agency has a staff of 280, and planned expenditure of US$ 91.7 million. ITC now has 146 active projects in 107 countries, with much of its work carried out on the ground by national consultants.

There was nothing automatic about this evolution. ITC was created simply to collect, collate, analyze and publish data and information that would promote trade by meeting the needs of developing and transition economies and least developed countries (LDCs). But trade information and analysis, now referred to as trade and market intelligence, accounted for only some 10% of ITC’s total expenditure in 2013.

The sixties: focus on trade information

During the 1960s, the trade-policy goals of most developing countries were to limit their imports, and to become as self-sufficient as possible. In many countries this suited businesses well – since they did not have to fear competition on their internal markets. They willingly gave up export opportunities in exchange for protection at home.

It is against this background that ITC advocated trade promotion, by providing data and information on best practices, and arguing for more open markets. The International Trade Forum was one of the major vehicles of information dissemination during this period, complemented by market studies and handbooks on trade-promotion techniques and practices.

By the end of the decade, ITC became the joint agency of GATT and the United Nations, establishing its position as the multilateral agency on trade promotion. Its US$ 1.2 million regular budget was supplemented by voluntary contributions from developed-country donors and the United Nations Development Programme (UNDP).

The seventies: capacity building

For years it was universally assumed by governments that lower trade barriers in their trading partners would automatically translate into growing exports for their companies. It was only in the mid-1970s that capacity constraints in developing countries were recognized as a bottleneck to exports, and this is where ITC quickly carved out a new niche for itself.

The 1970s represented a period of strong growth for ITC. The agency re-invented itself as an organization working with developing-country governments and their exporters, building the export capabilities of small and large firms in sectors with export potential. ITC established a presence in many beneficiary countries, and developed customized training programmes to complement its existing publishing activities. Country needs-assessments were prepared for the first time, and ITC representatives became close advisers to developing-country governments. Since then, ITC has assisted the creation of institutions in several countries to promote exports: CEPEX, Tunisia’s national trade promotion organization was, for instance, set up by ITC in 1973, as was Columbia’s Ministry of Foreign Trade 18 years later.

By 1980, ITC’s total expenditure reached US$ 25 million, with voluntary contributions by donor governments accounting for two-thirds of the agency’s budget.

The eighties: structural changes

The ITC of today began taking shape in the 1980s: the agency started to work directly with small and medium-sized enterprises (SMEs), and it began to view its work as a means towards broader development priorities, particularly poverty alleviation. During this period ITC implemented its first project focused on the specific needs of women entrepreneurs – a precursor to the flagship Women and Trade Programme of today.

ITC’s budget doubled again to reach US$ 54 million by the end of the decade.

The nineties: uneven growth

For reasons beyond ITC’s control, voluntary contributions began to shrink in the early 1990s, reflecting changing priorities of the largest donors, particularly UNDP. And in 1992-1994, ITC operated without an Executive Director, which added to uncertainty within the organization. But in the second half of the decade, ITC regained its strength and broadened its focus – moving beyond promotion and marketing to boosting the overall export competitiveness of SMEs.

ITC published a series of business guides covering subjects such as purchasing, supply chains, and quality management. Some of these guides have been updated since and are available via the publications page on the ITC website.

In 1996, ITC designed its first truly large programme: the US$ 28 million Joint Technical Assistance Programme (JITAP), which supported 16 African countries for a decade. The programme helped beneficiary countries in preparing their negotiating positions at the World Trade Organization (WTO), and at the same time offered advice on taking advantage of export opportunities arising from global trade liberalization.

Since 2000: larger projects, focus on impact

At the turn of the century ITC began developing export strategies for clients, and this has remained an important pillar of the agency’s work. In fact, the annual Executive Forum, the predecessor to the World Export Development Forum, initially focused on best practices in developing national and regional export strategies.

ITC aligned its activities with the United Nations’ Millennium Development Goals and embraced the Aid for Trade initiative of the international development community.

In the middle of the last decade the organization’s management began concentrating resources on a smaller number of larger projects. These allowed for economies of scale in delivery, as well as for the sharing of best practices between countries and programme-implementation teams. Simultaneous attention to the parallel dimensions of policy, trade support and enterprises means that interventions reinforce each other, and result in higher impact. ITC has put metrics in place to collect and measure the outputs and outcomes of its work, both at the corporate and the project level.

In the wake of the 2008 global financial crisis, exports to emerging countries have become an important driver of economic growth. As a result, ITC has assisted many least developed countries in taking advantage of trade opportunities with emerging economies and developing countries, across and between continents.

ITC today: the champion of SMEs

Today ITC is the only multilateral development agency fully dedicated to the development of SMEs, which account for over two-thirds of employment in most developing countries. ITC facilitates the integration of SMEs into regional and global value chains. It works with – and through – partners to strengthen the competitiveness of SME exporters and to build vibrant, sustainable export sectors that provide entrepreneurial opportunities, particularly for women, young people, and disadvantaged communities.

ITC has 50 years of experience and a proven record of connecting developing-country businesses to value chains, building sustainable market linkages, and delivering a positive development impact. And that makes a difference in the fight to eliminate poverty.