Deepening the trade priorities of the least developed countries
Development strategies for tourism, clothing and sustainable development are covered in a new series of Guidance Notes of the Enhanced Integrated Framework
International trade can be a powerful tool for least developed countries (LDCs) to reduce poverty and stimulate economic growth. But this is not a comprehensive solution.
Individual country contexts, government planning and prioritization, the private sector situation, and other idiosyncrasies – not to mention consumer preferences and global trends – intertwine to stimulate (or not) trade development. Being able to take advantage of available opportunities and create one’s own requires awareness and action, as well as the mobilization of targeted support in order to make trade work for the people of LDCs.
A series of three notes recently launched by the Enhanced Integrated Framework (EIF) responds to these needs, examining areas of particular importance to LDCs striving to strengthen their presence in world trade. For over ten years, the EIF has worked with LDC governments to build strong trade institutions and policies and to support local trade sectors in promising ways; this new analysis builds on that experience and forms part of its trade support.
Using case studies from various countries as models, the briefs offer insight into critical business topics and include a set of recommendations for action.
How can an LDC ensure the sustainability of its trade development? Could tourism be part of the support for the response to the pandemic? Where in the garment industry value chain can resilience be built?
The Briefing Notes pose and answer these and other questions, with a particular focus on the impacts and responses of COVID-19, offering detailed examples from Solomon Islands to Zambia to Bangladesh. Here’s a rundown of what’s covered.
Trade integration and sustainable development
Trade is not necessarily part of a country’s development strategy. It has to be integrated at the national level by members of government, and it is not necessarily a simple process.
By what is called “trade integration”, countries recognize the cross-cutting effects of this approach, that the economic, social and environmental dimensions are closely linked. LDCs can and should learn from what others have done, short note Mainstreaming trade into sustainable development strategies of least developed countries.
Cambodia, for example, has made enormous strides in reducing poverty and achieving its development goals. And international trade and investment have played a major role in the country, with an average growth rate of 7.9% from 1997 to 2017.
The country has succeeded in mainstreaming trade by strategically guiding the process, investing in its human capacities and encouraging dialogues and consultations among stakeholders within government institutions. Cambodia took the list of recommended actions from its first Diagnostic Trade Integration Study (DTIS) and turned it into a roadmap for trade integration. The fourth and latest version of the DTIS – the Cambodia Trade Integration Strategy (CTISU) 2019-2023 – amplifies the link between the trade strategy and the country’s broader development agenda, including by exploring new sources of growth in the digital arena.
The goal of integrating trade into a country’s development planning is to improve livelihoods. But there must also be some evidence that international trade is contributing to it – something that must be part of trade integration work, the brief notes.
Zambia, for example, continues to work to mainstream trade into various policies and strategic areas of work. But, as EIF coordinator Griffin Nyirongo at the Zambian Ministry of Trade, Commerce and Industry states in the brief, “Integrating trade into development planning does not guarantee effective integration unless there are sufficient resources. national and foreign countries are engaged in the implementation of trade-related policies. and programs.
Financial resources are necessary for business success. Funding is also needed to be able to follow this success – whether it be policy changes, initiatives or programs aimed at reducing poverty through trade.
Trade in tourism
Some LDCs have successfully used tourism to boost their economies. Through its many links between various stakeholders and activities, the sector can contribute to economic growth, community development and environmental conservation. But the pandemic has dramatically disrupted global tourist arrivals, and therefore local workers who depend on tourism dollars.
How can the recovery of COVID-19 be used to better develop tourism in LDCs?
First, tourism sectors must be rebuilt for the sake of sustainability. Community-based and nature-based tourism shows promise in this regard, and the government of Sierra Leone has sought to capitalize on the country’s natural and cultural resources to attract tourists and promote community development.
A sustainable tourism development project that started in 2020, coordinated by the EIF with the Sierra Leone National Tourism Board and the Ministry of Tourism and Cultural Affairs, addresses key constraints and strives to increase Sierra Leone’s presence as an attractive tourist destination in the international market. . In the aftermath of the pandemic, LDCs aiming to boost tourism should focus on raising finance, advises Supporting Sustainable Tourism Development in Least Developed Countries amid the COVID-19 recovery dossier.
This CIR project launched during the pandemic aims to help the country build its strategy for mobilizing public and private sector investment in tourism. The increased visibility of tourism could now serve as a catalyst to attract public and private funding, and LDCs should take this into account to boost community-based, environmentally friendly and sustainable tourism efforts.
Textiles in value chains
Clothing is one of the typical start-up industries for LDCs aiming for export-oriented industrialization. But countries that have integrated their clothing industries into global value chains have often failed to create conditions that sufficiently support their local populations. Additionally, COVID-19 has led to one of the most difficult years on record for global fashion and its supply chain, exposing the vulnerability of garment workers and businesses in LDCs.
The note Building Better Clothing Value Chains in Least Developed Countries explores how LDCs can make the most of their participation in clothing value chains as the global fashion industry recovers and evolved.
Government support and an enabling policy environment are needed, as are enabling investment frameworks. Stronger relationships between buyers and suppliers help build resilience, which includes greater transparency in the supply chain to reduce power imbalances. Finally, industry social and environmental standards should be central to the recovery, to ensure that workers in garment factories earn a living wage and have workplace protections.
Bangladesh’s garment sector has experienced strong growth over the past four decades, with its share of global garment exports increasing from 2.6% in 2000 to 6.8% in 2019. The industry is the largest provider of formal jobs in the country, estimated before COVID-19. crisis at 4.2 million, and it indirectly supports up to 25% of the Bangladeshi population. But, by April 2020, brands and retailers had canceled orders worth $ 3.18 billion from 1,150 Bangladeshi suppliers, affecting the livelihoods of an estimated 2.28 million workers.
How can the country and other LDCs with clothing value chains rebuild and better?
Through the diversification of products and markets. Through foreign investment. Through the upgrade of the environment. Through brands and retailers who are committed to paying suppliers and maintaining open lines of communication with supply chain partners. By implementing gender-sensitive measures. And there are others, as noted in the brief.
With a variety of short, medium and long term actions and appropriate planning and coordination, more sustainable development alongside trade development in LDCs is possible, the briefs note. The recommendations made for trade integration, for the tourism sector and for the clothing value chain will not necessarily apply to all LDCs as they are a very diverse group. But they’re a bunch for a reason, because of the similar challenges they face.
The submissions draw on the experiences of LDC governments, the EIF and partners working to support trade in a broad landscape. Armed with examples and evidence of what worked and what did not, along with strong support from international institutions, LDC governments can hopefully find a way forward: mainstreaming trade. that supports development, stimulates the best types of tourism and assembles garment industries that work for workers – with more resilience.