Trade Capacity Building and Private Sector Engagement

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By Kirby Bryan

For sustainable economic growth, developing countries must have the capacity to functionally interact with the global market. Much of the onus for building that capacity rests on a domestic commitment to reforms compatible with global trade. Many emerging markets have lofty aspirations that are unachievable given the current state of affairs, but are determined to rectify the situation. Access to foreign markets can cement reform efforts aimed at improving the local economy and sustaining economic growth.

In late February, the Center for Strategic International Studies (CSIS) released a report from their Congressional Task Force on Trade Capacity Building (TCB) on “Opportunities in Strengthening Trade Assistance.” While the report focuses primarily on US efforts to improve the effectiveness and relevance of its TCB programs, it signals a shift in international engagement and understanding of the role trade plays on the growth of a developing economy.

The shift is also indicative of a growing global development trend toward incorporating the voice of the recipient country from the beginning stages of negotiations through agreement ratification. What is interesting about the current TCB discussions is the recognition by major players in the development world of including the knowledge and expertise of the private sector. Ultimately, it is the private sector in the developing and developed countries that will bear the fruits of economic growth and trade.

Trade capacity is essentially about supplying enough to meet demand. International demand can come from one’s neighbors or a country on the other side of the globe. Building trade capacity is not just about making sure one’s ports are large enough to handle all of the country’s imports and exports and the physical infrastructure for transportation thereof, it is also about the institutional environment within which the private and public sectors operate, and the relationship between the two. Crippling regulatory institutions, disaffected and disenfranchised segments of the population, lack of access to capital, unresponsive, unengaged, and repressive government, and a disjointed private sector can all drastically inhibit a country’s ability to grow – and trade.

Having recognized the importance of the private sector long ago, CIPE has been on the leading edge in building business capacity. Our programs focusing on combating corruption, business association development, and legal and regulatory reform set the stage for top-level reforms to engage the private sector and make public-private interactions more efficient.

Through public-private dialogue (PPD) an organized, engaged private sector can work with the local, state, and national governments to improve the business climate, promote transparency, and create new jobs. In Afghanistan, CIPE continues to work with the Afghanistan Chamber of Commerce and Industry (ACCI) in its attempts to increase its voice in national policymaking processes through the development and marketing of a national business agenda (NBA). Within the NBA, the Chamber voices its desire for tariff policy and trade facilitation reforms.

CIPE, in conjunction with other NGOs – domestic and international – has also been working with the Lebanese private sector to combat administrative corruption as one step in improving industries’ capacities to meet domestic and international demand by lowering the cost of doing business at home.

And in Nigeria, CIPE and local partners host training programs for parliamentarians designed to aid policymakers in making informed decisions about cultivating a business environment that allows the private sector to develop and operate successfully.

CIPE welcomes an international effort to engage the private sector in building trade capacity among the world’s emerging markets and developing countries. Access to markets and the ability to meet the demand generated requires a healthy dialogue between the public and private sectors and an understanding that a thriving economy is in everyone’s best interest.

Kirby Bryan is a Knowledge Management Intern at CIPE.

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