The year 2015 in a nutshell

4 July 2016
ITC News

Opening remarks delivered by ITC Executive Director Arancha González at the Joint Advisory Group meeting

Geneva - 4 July 2016

Director-General Azevêdo,

Deputy Secretary-General Reiter

Ambassador O’Brien,

Ambassador Negash Kebret Botora

Ladies and Gentlemen,

Welcome to this 50th session of the Joint Advisory Group. Let me thank Director General Azevedo and the WTO for hosting us today. I also thank UNCTAD Deputy Secretary General Reiter for representing Secretary-General Kituyi who is in Nairobi preparing for UNCTAD XIV.

Let me also salute the presence of Mr Dabire, UEMOA Commissioner responsible for Trade.

I would like to pay tribute to Ambassador Patricia O’Brien of Ireland for her able chairmanship of the 49th session of the JAG, and welcome Ambassador Kebret Botora as Chair of this 50th session.

Let me begin by providing you with a snapshot of how ITC delivered trade impact for good in 2015 and to outline priorities and challenges we see for the year ahead.

The facts for last year speak for themselves. The Annual Report in front of you shows that we have delivered exactly what we promised to do in 2015.

Highest delivery in ITCs 50 years’ history

First, in 2015, ITC’s delivery of technical assistance, capacity support and market intelligence was the highest in our history. Extra-budgetary expenditures reached a record level of $55 million – more than 40% higher than in 2013. And total expenditure close to $100 million. We have matched client needs with funders’ requirements, using Window 1 resources to develop innovative new interventions that will multiply impact well into the future.

We invested a record $1.2 million in business development; in our experience, each dollar invested has yielded $16 in new funding.

We promised to devote at least 70% of our interventions on priority countries – LDCs, sub-Saharan Africa, Small Island developing states, small and vulnerable economies and post-conflict states. We have been faithful to our commitment for “focus” and delivered close to 80%.

Our dual emphasis on the ‘bottom billion’ and on communities at the ‘bottom of the pyramid’ – by which I mean the least integrated countries and the least empowered groups such as women, the extreme poor, refugees and displaced people and the youth– is not without risks. It means that projects often encounter unexpected hurdles.

In Fiji, for example, I witnessed earlier this year how the destruction caused by Cyclone Winston had simply wiped out much of what had been built by a value-chain project to foster agri-food processing and trade. Yet such risks are worth taking. In Fiji the resilience amongst the farmers to continue to benefit from this work is strong. These farmers now know how to capture a greater value for their products in markets and they are already scaling up and replanting.

The same happened in Nepal with the earthquake or in Liberia, Guinee and Sierra Leonewhere they have struggled to overcome the impact of Ebola. The building of local capacity and resilience means they are stronger to exit crises when they face them.

Structural reforms have allowed significant scaling up

Second, ITC has grown to meet client demand. And we have met our performance targets. Last year, we revised these targets upwards by a substantial margin to capture growth we could not have anticipated when defining our biennium goals for 2014/15, together with better-than-expected efficiency gains. I am happy to report that we have met these higher goals.

Our ability to scale up sharply in the space of a few years, without compromising on value for money, has been possible because of structural changes, focused on strategically organising our portfolio of solutions and maintaining a relentless focus on impact.

Starting in 2013, we articulated a new strategic plan that responded to shifts in the global economy and prepared for the transition from the Millennium Development Goals to Agenda 2030. We have structured our work into six focus areas and fifteen programmes, enabling us to focus on our comparative advantages while aligning client needs with funder priorities. Each programme refers to a well-defined set of interventions. Each has an externally validated theory of change and log-frame spelling out how it will generate and measure results and impact. Programmes do not mean silos: we are promoting knowledge exchange and taking advantage of complementarities. 2015 was the first in which this programme-based portfolio was fully rolled out, which is reflected in the Annual Report that is before you.

In 2015 we launched a New Project Portal, a fully integrated project management tool that facilitates project design, enables performance tracking, and simplifies reporting as well as project closure.

Following the adoption of the Global Goals for Sustainable Development last September, the SDGs have become ITC’s compass. We have fully embedded the Sustainable Development Goals into our programming, and developed tools to track progress.

In 2015 ITC has delivered tangible results

Third, we have delivered tangible results and impact. Let me provide you with highlights of our work in 2015.

On trade and market intelligence, we have focused on making it easier and more affordable for our partners to trade. We launched the SME Competitiveness Outlook, a flagship report enabling policymakers and the private sector to determine which reforms would yield the most benefits to improve SME performance. We released the SheTrades app is making it easier for women-owned businesses around the world to connect to buyers. We developed “Procurement Map” an on-line tool making information about more than 130,000 public tenders daily available for SMEs. The on-line SME Trade Academy enrolled nearly 5000 people, a third from the private sector. In a nutshell we have equipped others to magnify ITC impact at little additional marginal cost, ramping up the return on our funders’ investments.

In 2015, our trade and market intelligence tools facilitated close to $300 million in trade transactions. This is more than a double increase over 2014. This alone is more than 3 times ITCs total annual budget!

From the Central European Free Trade Area to the Dominican Republic, we have surveyed businesses on non-tariff measures. And armed with good evidence we have supported countries in addressing these barriers to cut down trade costs. We have helped Mauritius introduce a Trade Obstacles Alert Mechanism through which businesses can report trade impediments to local authorities in real time. The mechanism has swiftly resolved multiple port blockages, and Mauritius has eliminated dozens of export and import permit requirements, which has translated in a better playing field.

On building a more conducive business environment for trade, we have helped develop export strategies in Burkina Faso, Cameroon, Tanzania and Cambodia. We have supported Liberia and Afghanistan to conclude WTO accession talks.

We have also supported implementation of the WTO Trade Facilitation Agreement in more than 50 countries, a 50% increase in the number of countries we supported in 2014. In 2015, 12 countries supported by ITC ratified the agreement. In the first six months of 2016, three more have done so.

A big part of this work has involved bringing private sector voices to the table, so that governments better understand the practical problems businesses encounter. We have done this partnering with others such as UNCTAD, UNECE and the Global Alliance for Trade Facilitation.

And we have done this in an extremely cost-effective and efficient manner: for an average $20 000 per country, UNCTAD and ITC, working together, have helped over 50 countries to categorize and notification their commitments to WTO. This is excellent value for money especially considering that UNCTAD and ITC combined only account for 3% of the total funds allocated to support the Trade Facilitation Agreement. Imagine what we could do with increased and more predictable resources for trade facilitation!

More than 300 trade and investment support institutions supported by ITC increased managerial efficiency and the quality of services they provide to their SME clients. This is close to three times the support we provided in 2013. Why is this important? Because a study run by ITC in collaboration with the University of Geneva and the European Trade Promotion Organisations network revealed that each additional dollar spent on export promotion, results in $87 worth of additional exports and a $384 increase in GDP.

On supporting SMEs connect to value chains we helped Bangladesh IT services providers connect to clients in Europe and Nigeria. Fiji agro processor export to Australia and New Zealand; Sri Lanka exporters get to Europe; Laos and Cambodian exporters get to Chinese markets. PNG women producers to Japanese and Australian market, Nicaragua to USA; Tajikistan and Kyrgyzstan companies to Russia. In Benin, under an EIF funded project of $641,000 over three years we helped catalyse cashew exports worth over $30 million in the first year. That’s a return on investment of about 150 to 1.

In Kenya, we teamed up with German electronics giant Bosch to help SMEs reduce waste and boost productivity through lean production techniques. Our partner in this work, the Kenya Institute of Supplies Management, has now introduced lean manufacturing to its portfolio of advisory services. To sum up: ITC leveraged the private sector’s expertise for SMEs, and these gains will now be multiplied throughout the country by a key domestic institution.

On mainstreaming inclusive and green trade, we have launched the SheTrades initiative to connect 1 million women in business to markets by 2020 which will be presented to you this afternoon. At last year’s Women Vendors Forum in Brazil, women entrepreneurs signed letters of intent to export worth a total of $20 million. This is a four-fold increase over the 2014 figure. The poor communities affiliated to our Ethical Fashion Initiative in Ethiopia, Haiti, Mali or Palestine registered a 70% increase in trade. Building skills and market connections for raffia and cocoa gave communities in Madagascar and the Peruvian Amazon more revenues with greater biodiversity protection.

In our sixth and final focus area, supporting regional economic integration and South-South links, two exciting projects are bolstering trade and investment ties between Africa and the two biggest emerging economies: China and India. The Supporting Indian Trade and Investment for Africa (SITA) project has already catalysed close to $5 million worth of trade in turmeric, pulses, and cotton – with $50 million worth of deals in the pipeline. And late last year, we launched the Partnership for Investment and Growth in Africa (PIGA), which seeks to encourage Chinese investment in export-oriented value addition in Africa. By the end of this year we are looking to announce the first Chinese investment deals in Ethiopia, Kenya, Zambia and Mozambique. And there is more in the area of South-South and triangular cooperation with ITC working with Chili, Korea, Malaysia, Turkey, Morocco, UAE and other to help other developing countries.

Strong focus on innovation

Constant innovation is critical to “doing more and doing it better,” which has been my credo since arriving at ITC. This is why we have created a small Innovation-Lab as a centre to spur ideas and novel thinking working with educational and scientific institutions, other UN agencies, and think tanks.

Some examples of our innovations in 2015:

- The SheTrades app helping to e- connect women in business to markets, developed with Google and with the Brazilian company CI&T.

- Our work on supporting SMEs to e-trade. In collaboration with DHL and eBay, we have developed a comprehensive package of ‘E-Solutions’ to help firms overcome barriers to e-commerce. You can try them out today at the e-Commerce Caravan in the WTO atrium. You will be able to buy fashion accessories from Syria, Côte d’Ivoire, and Ethiopia, coffee from Rwanda and food products from Morocco and Senegal. Among the people benefiting from your purchases will be war-displaced women in Damascus, poor weavers in Ethiopia, and workers at one of Rwanda’s few domestically-owned coffee washing stations. Here I am pleased to welcome Rania from Syria, Mafi from Ethiopia, Anna from Rwanda, and El Amine from Morocco. Later today ITC will be signing a MOU with the Vice President of Ebay to strengthen our partnership in delivering e-solutions for SMEs.

- Together with partners such as the Norwegian Refugee Council (NRC) and UNHCR, ITC is developing pilot projects in refugee camps to explore how connecting refugees and displaced communities to trade can help them earn incomes and build skills for the future.

- Using geolocation numbers and ‘big data’,in partnership with GS1, we are supporting farmers and agro-business companies to ensure traceable and more sustainable agriculture value chains.

Innovation for us means: rewarding fresh thinking, partnering with others and in particular with the private sector and ensuring innovations can be scaled up for greater impact.

Better measuring the impact of ITC interventions

Turning now to impact, in 2015 we have significantly invested in better capturing the impact of our work.

Impact is about contribution, not just attribution. Measuring it well relies on a repository of comparable information over time, so that we can make evidence-based determinations of change. The SheTrades app, company specific surveys and the geolocation based initiative for agribusinesses will build up such information.

Impact is also investing in methodologies. This is why we have invested in RISE – which stands for Respect Invest Sustain Empower (RISE) – a benchmarking, monitoring and impact measurement approach to examine the poverty reduction effects of business resulting from interventions targeting micro-entrepreneurs. This is why we have invested on a methodology to assess the impact of Trade and Investment Support Institutions. This is also why we have invested in a methodology to analyse the international competitiveness of SMEs through our SME Competitiveness Outlook. Finally, this is also why we are cooperating with research institutions such as two Dutch Universities under the PRIME initiative.

Our immediate ambition for upgrading performance measurement is for all projects and programmes to seamlessly comply, by the end of this year, with results measurement standards set by the Donor Committee for Enterprise Competitiveness (DCED).

An important part of improving performance is understanding costs. With the implementation of the new UN-wide Enterprise Resource Planning system– UMOJA – last year, we are working to leverage the system’s transparency and varied reporting structures to fully cost ITC operations across all budgets in 2016. I say “hope” because we are still on the UMOJA learning curve, with many of its features becoming available only now.

Investing in more diverse and professional human resources

ITC’s strongest asset is its staff. Last year we maintained our trend towards greater diversity and efficiency. Through our recruitments, which took 121 days, compared to 187 days in 2013, we delivered greater geographic diversity - 82 nationalities represented in 2015, up from 74 in 2013; more staff members and JPOs from developing and least developed countries and more women, who won 45% of competitions to recruit fixed-term staff, slightly higher than in 2014, and well above the 13% figure registered in 2013.

This means we are walking the talk on gender equality, by implementing the policies adopted last year to reach gender parity across professional levels by 2020.

Finally, in 2015 we conducted the first staff engagement survey, which provides a baseline for future improvements in areas such as fairness, well-being, information-sharing and personal commitment. We are not afraid of asking ourselves sometimes tough questions, because we are committed to improving.

Challenges ahead 2016 and beyond

In conclusion, 2015 was a good year for ITC, that is, for all of you, our Members.

A year in which the support that funders provided through ITC translated into concrete impact on the lives of people.

A year in which we showed once again that ITC can be relied on to deliver increasing value for money. A conservative estimate shows that every technical assistance dollar you have entrusted us with has generated an estimated eight to ten times more in business deals. And that same dollar has leveraged 25% of additional funds in cash and in kind from the private sector. This is why ITC will continue to invest heavily in building partnership with the private sector, both in the North as well as in the South.

We have started 2016 in full force. Just over the last two months we have launched a publication on ‘Bringing SMEs onto the E-commerce Highway’, we have hosted a series of events around the digital economy on ‘e-com souks’, we have co-hosted a dialogue on climate change and trade with the LDC group and a discussion on MSMEs and trade policy with the Permanent Mission of the Philippines and other interested parties, we have held a successful ‘women in business’ event in Finland and launched work on coconut value chains in the Caribbean. We have held a series of regional trade facilitation and non-tariff measures events in West Africa – UEMOA and ECOWAS - to articulate a programme of work for the region.

During these upcoming 6 months ITC will host the Women’s Vendor Forum in Turkey in September, the World Export Development Forum in Sri Lanka in October, and the Trade Promotions World Conference in Morocco in November. I invite all of you to attend.

We must acknowledge, however, that there are clouds on the horizon at least for 2016. ITC’s expected extra-budgetary resources for this year are lower than in 2015. This has in part been a consequence of pressures on some funders to adjust development assistance budgets and shift funding away from Aid for Trade. Moreover, these reductions are happening in un-earmarked contributions, limiting ITC’s ability to innovate and respond to changes in our operating environment. The fact that such contributions are made on a short-term, year-to-year basis also make it harder for ITC to plan with its partners and build long-term capacity that will endure after the withdrawal of support.

At the same time, earmarked funding is becoming relatively more important and ITC’s healthy project pipeline post 2016 confirms that funders trust ITC to deliver sustainable Aid for Trade solutions. The humanitarian tragedies and refugee crises embroiling large sections of the world today will not disappear tomorrow. In the long run, however, history shows that broad-based growth contributes to civil peace. And that most people do not risk life and limb in search of a better life elsewhere if they have meaningful economic opportunities at home.

Amidst the pressures to favour short-term emergencies at the expense of longer-term investments, I ask you to continue to place your faith in ITC as an implementer of Aid for Trade projects to promote inclusive growth and sustainable development. With your support, we can continue to deliver trade impact for good.

Let me in closing thank ITC staff for their hard work and dedication, as well as the senior management team led by Dorothy Tembo. Without their teamwork none of this would have been possible.

Thank you for your attention.

Thank you for your attention.