Growing to meet TRTA demands

22 May 2012
ITC News

Speech by Ms. Patricia Francis.
Delivered on Day One of the 46th Session of the ITC JAG, 21-22 May 2012.
Monday, 21 May 2012, 10:40-11:00.


Mr. Chairman, Excellencies, Distinguished Delegates, Ladies and Gentlemen.

Thank you, Mr. Chairman, Mr. Lamy and Dr. Supachai for your opening statements.

On behalf of ITC, I would like to thank you, Mr. Lamy, for hosting the 46th JAG once again at the World Trade Organisation.
Volatile is probably the way to describe the world economy today and while we may have believed we had touched bottom the Eurozone crisis has the potential to plummet world trade even below the current 3.7% annual growth rate predicted by the WTO. Predictably Developing countries will have to search increasingly for growth in the South whatever the actual outcomes for the world economy in 2012 and 2013. Several factors are clear.  Besides anemic growth in high-income countries Developing countries will find themselves operating in a much weaker global economy, with much less abundant capital, less vibrant trade opportunities and weaker financial support for both private and public activity. Under these conditions prospects and growth rates may become more difficult to attain, and vulnerabilities that remained hidden during the boom period may become more visible and require policy action. SMEs in developing and transition economy countries will face even tougher times.

The UNDP’s Africa Human Development Report released last week concludes that impressive growth rates have not translated into the elimination of hunger and malnutrition. Women are particularly at risk.

LDC IV called for a doubling of trade while as we have just heard from Dr. Supachai UNCTAD XIII called for a focus on development-centred globalization and the need for new policies and instruments to support efforts to bolster growth that is socially inclusive and stable.

It is within this context and with the Doha impasse that ITC is positioning itself to partner with beneficiary countries to develop programmes in line with their real needs, which create jobs and are inclusive and sustainable in the long run. Well designed and needs based programmes that are built around SMEs meeting global market needs, stand a higher chance of distributing the benefits of trade among the population while  expanding global trade.

To deliver on this promise the ITC has been building partnerships:

With our parents the WTO and UNCTAD as well as the World Bank and the World Economic Forum we are expanding the reach of our Global Public Goods and promoting greater transparency in trade information in an effort to build confidence and understanding of markets. The partnerships make trade and market data information available – free to developing and least developed countries – so that users can better understand supply and demand trends, seek out new markets, understand nontarrif barriers and private voluntary standards in order to identify opportunities to diversify.

We were pleased to celebrate the Accession of two LDCs, Samoa and Vanuatu at the 8th WTO Ministerial in December along with that of Russia. The partnership with the WTO saw ITC bringing the private sector in Samoa and Vanuatu into dialogue with the public sector to understand what Accession means and to prepare for the post accession challenges and opportunities.

With the EIF, CBI and UN Partners we are combining our resources and competencies to deliver in the area of Tourism, Agriculture/Agribusiness and the Green Economy among others.  Many lessons have been learned in building these partnerships.

To expand our reach we also opened a regional office in Mexico in line with a recommendation in ITC’s overall evaluation in 2006, which requested that ITC get closer to its beneficiaries. As the opening of offices is a major commitment and financial outlay, we have opened the office in Mexico City as a pilot and will monitor and evaluate its contribution to our delivery in Latin America and the Caribbean over the coming years.

You asked us in previous years to prioritize work in the most vulnerable countries: LDCs, LLDCs, SIDS and Sub-Saharan Africa. Allocation to these countries in the last biennium has grown faster than our overall delivery, making up 55% of our project allocation, and 78% of our country- or region-specific project allocation. These figures represent a six percentage point increase from 2009.

While remaining focused on those who need our services most we have made progress in improving our effectiveness. During 2011 we carried out Corporate wide training on Project Design which was mandatory for Project Managers and technical teams. We are pleased to say that a review of our Project Design methodology by our external auditors has rated it as good practice.  I want to congratulate the team that worked hard to achieve this.

We also carried out several Midterm evaluations of large programmes and worked with OIOS on understanding Risk Management in our large programmes. The mid-term evaluations confirm that we are on the right track to concentrate our delivery in large projects, which have higher potential impact on the ground, while at the same time lowering transaction costs. Lessons learnt from the evaluations and on developing a more structured approach to risk management is being rolled into our new programme designs and into our project management good practices portal.

Rolling out results based management across the organization was also a priority in 2011 and will remain so this year. The initiative to embed RBM practices more deeply throughout the organization gained momentum last year, with 58% of project staff already trained on RBM and significant work achieved in aligning programme and project objectives to corporate objectives.

The evaluation function has proven to be a very useful tool, which we would like to see playing a more important role in the future of ITCs planning process. We are asking Member Countries to continue supporting our efforts in this regard to ensure RBM becomes more ingrained in the culture of the organization.

2011 also saw the corporate wide initiative to develop our new Corporate Logframe.  Many hours of consultation internally and externally took place and we thank those of you who contributed to the process.  We hope that this meeting will confirm their approval of the framework so that we can finalize our approval process with New York for the 2014-15 biennium. The corporate Logframe forms a part of our Strategic Plan which was also updated during the year and we look forward to your approval of this document during this meeting.

The world is changing at an ever increasing pace as we face challenges such as the Arab Spring and opportunities around the potential for Africa’s emergence as both a production base and as a market.

ITC continues to work on reinventing its services, to be able to offer the right response to its clients’ needs in this changing environment. In the future we will be developing some new  innovative solutions such as:
• Trade in Services
• Programmes tackling youth unemployment
• 2nd generation of programmes on Regional Integration and Intra-regional trade
• Intellectual Property rights and branding as a means to bring more value
• Expansion of E-Learning to build capacities remotely before providing value added services locally
• Supporting our networks World TPO Awards, WEDF

Mainstreaming inclusiveness and sustainability has of course remained a key focus area for ITC in 2011. Our Women and Trade program has been acting as a catalyst to generate opportunities for business women in the developing world. Last year we launched a ten-year strategy to deliver the goal of the Global Platform for Action for Sourcing from Women Vendors. The Platform’s aim is to increase the share of corporate, government and institutional procurement from women vendors in order to bring greater economic benefit to women and their communities. The Platform already has corporate members with an annual procurement spend in excess of US$ 700 billion and a sellers’ network of more than 50,000 businesses and professional women.

Providing equal opportunities to women is not only the morally right thing to do: it is also good development policy, as women reinvest 90% of their earnings in family well-being. When women are in control of their income, a number of positive outcomes follow which contribute the cycle of poverty being broken.

ITC has also been recognized for pioneering the exploration of the fast developing Ethical Fashion sector, through which we deliver skill-building and employment opportunities to people living in some of the worst slums of East Africa. We are going to show case this programme at the Rio+ 20 conference next month to demonstrate that doing good and at the same time making profits is possible through an inclusive business models ITC has developed in cooperation with the communities and major Western fashion houses.

The rise of the green economy offers huge opportunities for SME exporters in developing countries. ITC is working with exporters and producers to enable them to benefit from these opportunities. For instance we help Peruvian exporters comply with regulatory requirements in the U.S. and support exporters in Kenya in implementing climate-change mitigation and adaptation strategies. As a next step, we plan to further mainstream sustainability and green economy considerations into our overall project development process.

Following the lead of UNCTAD we have expanded our work in carrying out NTM Surveys of the Private Sector in 13 countries in the last biennium and are working closely with governments to identify roadmaps to address many of the local barriers which are inhibiting their exporters.

Over the last two years we have been developing withTPOS in 6 countries a TPO Benchmarking scheme which we will be presenting tomorrow during the informal session.  The tool was developed in conjunction with TPOs from the North and South. This innovative tool is based on a maturity model and therefore adaptable to TPOs at all levels of development.  We know demonstrating value for money is critical today and we believe that this tool will assist TPOs to assess their status and develop capacity build programme to tackle weaknesses identified.  

In 2011 ITC exceeded its target of USD $44 million in delivery of TRTA and reached US$ 47.8 million as its large programmes reached their peak in delivery.

In scaling up our delivery we have done so mainly through our large programmes and I would briefly mention some examples.
1. The EnAct programme supported TSIs to optimize their efficiency and quality of services to women and youth in the private sector following the changes emerging from the Arab Spring.
2. Building the foundation for SME export growth through strengthened TSIs is also at the heart of another one of our large programmes, Pact II, which aims to increase regional integration through trade in Sub-Saharan Africa. Much of our work involves building the capacity of three of Africa’s regional economic commissions, so they in turn can assist SMEs more effectively. For example in the COMESA we developed an export strategy with the leather sector that goes beyond the production of raw materials towards manufacturing value-added leather goods.
3. Strengthening TSIs in regional value chains in cotton, textiles and agri-food commodity sectors for sustainable export results was at the heart of our AAACP programme, which ended last year.
4. The NTF II programme is developing sectors in five countries, four of which are in Sub-Saharan Africa.
5. In terms of realizing exports, in the previous biennium ITC also facilitated 1,620 enterprises to meet potential buyers – more than four times the number in 2008-2009.

Following this very successful year we have taken a more conservative approach to our delivery in 2012 while also focusing on quality and planning for the next generation of large projects. As many of our major multi-year programmes expire by early 2013, ITC is currently identifying the next generation of large projects and are engaging with beneficiary countries, donors and partners to plan for new projects beginning in 2013.  We expect our delivery in 2012 to be around $41 million, some 15% below the 2011 level but we expect delivery in the 2012-2013 biennium to remain the same as 2010-11. While we do want to increase our delivery to 2011 levels and beyond, we do not want to do it all costs, but only if we can ensure that our delivery is effective and efficient.

To match the delivery of the previous biennium in 2012-2013, we require additional support of at least US$ 14 million this year and next to replenish funding for large projects. Over time, we are looking to raise $50 million or more annually in order to keep up with and then surpass last year’s level of delivery. We are launching our fundraising strategy to attract new donors, as well as major foundations and multinational corporations whose goals and Corporate Social Responsibility agendas align with the MDGs and ITC’s mandate and objective of Export Impact for Good.
At the same time as we are building our project delivery capability we have been modernizing our financial management capability working toward implementation of International Public Sector Accounting Standards (IPSAS) by Jan 2014. Combined with the work on RBM, ITC will be in a position to have better management reporting in support of its management decision making. To deliver this successfully will be resource intensive so we call for continued support to our financial reform process

The difficult economic times also means that there is greater need for our services.  Your financial support will put us in a position to deliver to our beneficiary countries and we believe we are on the right track not only in designing our programmes to meet needs but to measure and report on our results.  We count on your continued support and are sure we will have a team to move the organization forward.

We are looking forward to hearing from you regarding your needs and priorities for 2012 and beyond during both the formal and informal discussions over these two days.

We are very thankful for your ongoing support to ITC, its mandate and mission. It is only thanks to your active support that, ITC obtained continued funding for our two temporarily funded posts once again for the current biennium.

In closing, I would again like to thank the Director-General of WTO and the Secretary-General of UNCTAD for their continued support and guidance to ITC and thank the staff of ITC for their tremendous work in moving the organization forward.

I thank you for your attention.