Trade and Technology FORUM

2019 ADVISING, EMPOWERING & INSPIRING TRADE

Issue 1 INTERNATIONAL TRADE Trade and technology FORUM

MESSAGE FROM

Technology for all

ARANCHA GONZÁLEZ, Executive Director, International Trade Centre

he world of 2019 is very different than Indeed, such dramatic progress makes it Tthe world of 1995 when the World Trade easy to forget that more than half the world’s Organization was established. The way we population is not connected to the internet. produce, trade and consume been transformed While internet penetration is high in some by technology and efficiencies in transportation parts of the world, reaching 95% in Europe, and global poverty has decreased. in Africa it is only around 36%, according to We are witnessing a digital revolution Internet World Stats. which has made information more freely If we are to achieve the overarching available than ever before but we are also in goal of the United Nations 2030 Agenda for the midst of an ecological crisis where the Sustainable Development – leaving no one the benefits that come with technology and limits of the planet is being tested and we are behind – this has to change. are increasingly taking advantage of these seeing social agitation with citizens across the For trade in the digital economy, a recent opportunities. But for MSMEs in developing world demanding better jobs, less inequality step in the right direction was taken in January, countries to truly reap the benefits of and a greater stake in global governance. when a group of World Trade Organization participating in international trade, they need In the world of trade, the digital revolution members launched talks on rules to govern greater support such as access to finance and has reshaped the ways countries interact as global e-commerce. This matters, for the access to technology. well as how companies move goods, services future of global commerce and it is important At ITC we are stepping up our efforts in and information across borders. for all countries that they have a stake in the response to these needs by working with our Apple launched its first iPhone in 2007; discussions and eventual outcome. partners in the public and private sectors to today, one in three people across the world Technology was creating new opportu- ensure that the technologies needed to succeed owns a smart phone. Africa, with its growing nities for trade long before the advent of the in trade in the 21st century reach those that youth population is part of this revolution with digital economy. In this issue of International need them the most. 15% of the continent’s 400 million mobile- Trade Forum, logistics company UPS describes But for the world to truly benefit from the phone subscribers owning a smart phone. how it is taking advantage of technology to opportunities provided by the digital revolution, Over the past decade global e-commerce reach more people across the world and, in we need to ensure that more players play a has been expanding at an average rate of 20% effect, connecting more people to global mar- greater part in ensuring that technology delivers a year, with some countries hitting 50%, as kets. Meanwhile, the IRU, the road transport for all and that no one is truly left behind. bricks-and-mortar shops have languished. organization, explains how technology makes And while this trend keeps accelerating in it easier to transport goods across borders. many parts of the world, poor logistics remain Be it in Africa, Asia or Latin America and a barrier to e-commerce growth in many the Caribbean, micro, small and medium- developing countries. sized enterprises (MSMEs) are realizing

FORUM ISSUE 1 | 2019 | 3 International Trade Editor Forum focuses on trade Jarle Hetland promotion and export Contents development as part of Writers ITC’s technical Annegret Brauss Co-operation programme Delphine Clement with developing countries David Fox and economies in Mujinga Tambwe transition. Ann-Kathrin Zotz GLOBAL VIEW Published quarterly since Copy editor 1964 in English, French Michael Kelley NEWS BRIEF...... 6 and Spanish. Design, illustrations WHY PROTECTIONISM SPELLS TROUBLE See the online version at and art direction FOR GLOBAL ECONOMIC GROWTH...... 10 tradeforum.org Kristina Golubic Iva Stastny Brosig Jonathan D. Ostry, Deputy Director, International Monetary Fund Sign up for e-mail headline alerts at tradeforum.org/ Printer HOW TECHNOLOGY IS HELPING THE TRANSPORT SECTOR alerts ITC Digital Printing BECOME MORE SUSTAINABLE ...... 18 Subscriptions Disclaimer Umberto de Pretto,Secretary-General, International Road Transport Union [email protected] Views expressed in Trade Forum are the contributors’ AGENDA...... 38 Print subscription and do not necessarily US$ 60/year (free to coincide with those of ITC, trade support institutions UN or WTO. Designations and firms in developing employed do not imply the countries) expression of any opinion on the part of ITC concerning ISSN: 0020-8957 the legal status of any country, territory, city or

Address area, or of its authorities © ITU International or its boundaries; or the Trade Centre endorsement of any Palais des Nations firm or product. 1211 Geneva 10 Switzerland Publisher The International Trade t +41 22 730 0111 Centre is the joint agency of f +41 22 733 4439 the World Trade Organization intracen.org and the United Nations.

Reprints Cover photo: Articles from this Shutterstock.com magazine may be freely reprinted, with attribution to the author and to International Trade Forum, ITC. A copy of |12 the reproduced article would be appreciated. Copyrighted photos may not be reproduced.

SPECIAL REPORT

SMALL AND MEDIUM-SIZED ENTERPRISES: ENGINES OF THE DIGITAL REVOLUTION...... 12 Houlin Zhao, Secretary-General, International Telecommunication Union

GO BIG OR GO HOME: GETTING SMALL BUSINESS TO THINK LARGE ...... 14 Philippe Gilbert, President, Supply Chain Solutions, UPS

WHY BLOCKCHAIN COULD BECOME THE NEW CONTAINER OF INTERNATIONAL TRADE...... 16 Emmanuelle Ganne, Senior Analyst, World Trade Organization

ITC EMPLOYMENT AFRICA’S GREEN OPPORTUNITY...... 20 Camaren Peter, Associate Professor, Allan Gray Centre for Values-Based ITC is recruiting qualified professionals within different Leadership, University of Cape Town areas of expertise. If you would like to contribute your skills to increasing export competitiveness for developing TAKING A CLOSER TOOK: THE IMPACT OF TECH ON TRADE...... 22 economies, and are motivated to work in an international environment that promotes diversity, please check our Ziyang Fan, Head of Digital Trade, World Economic Forum, and Ulrich Mans, jobs website, which is updated weekly: Innovation Attaché, Netherlands Embassy Washington www.intracen.org/about/jobs

4 | FORUM ISSUE 1 | 2019 PHOTO FEATURE

ADAPTING TO CLIMATE CHANGE Kenya’s cut-flower sector is responding to challenges posed by climate change.

ITC IN ACTION

IMPROVING AFGHAN FOOD SAFETY TO BOOST EXPORTS...... 30 David Fox, Consultant, International Trade Centre

‘CREATIONESIA’ WINS INTERNATIONAL TRADE CENTRE’S

GUINEA: BOOSTING YOUTH INITIATIVES AND ENTREPRENEURSHIP ...... 34 Mujinga Tambwe, Communications Officer, International Trade Centre | 24 PUBLICATIONS

RESOURCES ON TRADE AND EXPORT DEVELOPMENT...... 37

SPECIAL REPORT

EFFICIENT HARVESTS, EFFECTIVE TRANSPORT CAN ELIMINATE HUNGER...... 24 Silvia Gamboa, Head of Sustainability and Environment, APM Terminals Moín

SMART POLICIES HELP HUNGARY’S MSMES BENEFIT FROM THE FOURTH INDUSTRIAL REVOLUTION ...... 26 Tamás Vattai, First Secretary, Permanent Mission of Hungary to the United Nations and World Trade Organization

AFRICA’S POTENTIAL ‘BORN DIGITAL’ TRADE AGREEMENT...... 28 Craig Atkinson, consultant, International Trade Centre

FORUM ISSUE 1 | 2019 | 5 NEWS News Brief

South-South trade helps firms build competitiveness, meet growth goals, report says

Companies that engage in South-South value chains and produce higher value-added goods are more competitive and better able to reach growth targets, a new International Trade Centre (ITC) report says. ‘The Power of International Value Chains in the Global South’ was produced in collaboration with the Research and Information System for Developing Countries, a think tank based in New Delhi. Using macroeconomic data and a survey of 558 East Afri- © Shutterstock.com / ITC can firms, the report shows that recent proliferation of regional trade agreements and rising trade in technology-intensive goods have propelled the South’s growth in the past two decades. The economy of the ‘Global South’ – which encompasses least developed countries, economies in transition and developing economies – more than quadrupled to $30.9 trillion from 2000 to 2016, the report said. The findings underscore the need for decision makers to step up support for regional cooperation to promote South-South trade and international value chains alongside South-North initiatives. The report sets out almost a dozen strategies aimed at increasing South-South trade, including recommendations to encourage inward foreign direct investment; facilitate imports; target both bilateral and multilateral South-South trading arrangements; and support investment in technology.

International Trade Centre releases upgraded SheTrades app

The International Trade Centre (ITC) has rolled out a upgraded version of the SheTrades desktop and mobile app to more easily connect women entrepreneurs to markets and buyers. The improved platform provides users with a new interface, a range of new features and a much better user experience. A central component of the SheTrades Initiative, which aims to connect 3 million women entrepreneurs to markets, the online platform makes it easier for women entrepreneur and women-owned companies to reach out to potential buyers and vice versa. SheTrades also allows women to connect with peers and improve their business skills through online learning. In addition to providing a digital networking home for women entrepreneurs, the SheTrades online platform is also a tool for bigger companies looking to include women entrepreneurs in their supply chains. In fact, a key driver in the development of the platform was concern expressed by corporations about the challenge they face when trying to identify women vendors as potential suppliers. ITC invites businesses, institutions and agencies to be part of the SheTrades network by registering on www.shetrades.com or by © Shutterstock.com / ITC downloading its mobile app, available at the Apple store and Play store.

6 | FORUM ISSUE 1 | 2019 Business models worldwide face radical change, study shows

Global business models are changing models regardless of size, sector or rapidly and radically, creating a need for location. They are technological inno- policymakers, businesses and employer vation; global economic integration; organizations to innovate, adjust and become climate change and sustainability; more flexible, a new study has found. demographic and generational shifts; The skills gap is a major issue, with 78% and a global shortage of skilled labour. © Shutterstock.com of corporate executives saying schools are The findings of the report, ‘Chang- failing to meet future employer needs, according Business and Opportunities for ing to research conducted by the Interna- Employer and Business Organiza- tional Labour Organization’s (ILO) Bureau for tions,’ stresses that businesses cannot Employers’ Activities (ACTEMP) and the Inter- meet the challenges alone and should national Organisation of Employers (IOE). develop collective solutions through More broadly, the report identifies five employer and business membership trends radically altering global business organizations (EBMOs).

Report sheds light on impact of digital technologies on global value chains

While the expansion of global value chains The report, which looks at the impact of (GVCs) has generally slowed since the GVCs on labour markets, shows trade has not financial crisis of 2008-09, recent data been a significant contributor to declines in shows that complex value chains involv- manufacturing jobs in advanced economies ing production processes across multiple and that it has enhanced employment and economies grew faster than GDP in 2017, income in developing economies. It also according to Global Value Chain Develop- points to job gains in the services sector in ment Report 2019. Co-published by the WTO, both developed and developing economies as the World Bank Group, OECD, the Institute production processes have evolved under GVCs. of Developing Economies (IDE-JETRO), the The report nevertheless recognizes that Research Center of Global Value Chains of the structural changes in economies can vary the University of International Business and considerably across regions and individuals Economics (UIBE), and the China Develop- with different skill levels, particularly in ment Research Foundation, the report was developed countries. It therefore highlights unveiled during the 2019 Spring Meetings of the need for governments to implement the International Monetary Fund and World adjustment policies to make sure economic © Shutterstock.com Bank Group. gains are spread more evenly.

‘Critical moment’ for sustainable development at hand, UN chief tells financing forum

“Uneven growth, rising debt levels, pos- we need more money to implement the Sus- sible upticks in financial volatility, and tainable Development Goals.’ © ITC heightened global trade tensions” are Noting that development aid remains hampering progress on reaching the essential, particularly for the poorest coun- Sustainable Development Goals (SDGs), tries, the secretary-general highlighted United Nations Secretary-General António the importance of countries themselves Guterres told the Forum on Financing for generating more funding, including by

Development. increasing tax revenue and the impact of © ITC Climate change, greenhouse gas emis- investment. sions and technologies disrupting labour ‘National policy frameworks are key to markets were a major challenge, Guterres reducing risks, creating an enabling busi- said. ness environment, incentivizing investment ‘We are here today as part of an effort in public goals and aligning financial sys- to coordinate an urgent global response to tems with long-term sustainable develop- reverse these trends,’he said. ‘Simply put, ment,’ he stated.

FORUM ISSUE 1 | 2019 | 7 PHOTO SPECIAL

Supporting Kenya’s cut flower sector adapt to climate change

DELPHINE CLEMENT, ANNEGRET BRAUSS, ANN-KATHRIN ZOTZ, Programme Officers, International Trade Centre All photos: © Antoine Tardy / ITC Tardy Antoine All photos: ©

The country’s floriculture sector is increasingly feeling the impact of climate change and realizing the urgent need to adapt to stay competitive

he cut flower sector is one of Kenya’s climate resilience across international value The project highlighted the urgent need Tmain exports and one of the larg- chains. The overall objective was to provide for SMEs to build capacity and skills to actively est employers in the country. Highly support to MSMEs to integrate climate-change manage climate-induced risks and to strengthen sensitive to changing weather patterns, the considerations into their business risk analysis and awareness of, and access to, green finance. industry is increasingly feeling the impacts of to create climate adaptation strategies that include It also showed that climate change adaptation climate change. In recent years, many flower practical and bankable measures. Financed by is more easily achieved through collaboration farms have had to cope with a range of threats: the German Federal Ministry for Economic along value chains, to initiate joint action to heavy rainfalls, prolonged cold weather and Cooperation and Development (BMZ), the tackle sustainability issues in trade. too high temperatures in the greenhouses. project has also carried out interventions in the As a result, scheduling the cutting ahead of textile and agro-processing sectors in Morocco. 1. Flowers being assembled for export.Abdoulie key sales periods such as Valentine’s Day or Kenyan floriculture companies partici Drammeh, Founder, Kara Garden. Christmas is becoming challenging. pated in a six-month customized coaching 2. A woman worker in the field. The International Trade Centre’s (ITC) Trade programme that helped them identify numer- 3. Greenhouses. for Sustainable Development programme began ous adaptation measures. These included 4. Roses in cold storage. work in 2018 to support the competitiveness the selection of new flower varieties that can 5. A woman readies roses for exports. of micro, small and medium-sized enterprises tolerate higher temperatures and the use of 6. A variety of roses grown to satisfy a variety of (MSMEs) in Kenya’s floriculture sector as well temperature and humidity sensors to control customer preferences. as the tea and coffee sectors, looking to build the temperature in the green houses. 7. Workers in the field.

8 | FORUM ISSUE 1 | 2019 FORUM ISSUE 1 | 2019 | 9 GLOBAL VIEW

Why protectionism spells trouble for global economic growth

JONATHAN D. OSTRY, Deputy Director, International Monetary Fund For hundreds of years, competitive markets have been seen as most likely to maximize economic output © Shutterstock.com

t is sometimes alleged that for all the Economists, however, have generally microeconomic distortions that protec- been sceptical. Since the time of Adam There is in addition a powerful lesson from history. Protectionist policies I tionist policies inflict, there can be a sil- Smith (or maybe even before), open and helped precipitate the collapse of ver lining in terms of macroeconomic gains: competitive markets have been seen as international trade in the 1930s, and more jobs, more output and a stronger trade most likely to maximize output by directing this trade shrinkage was a plausible balance. Indeed, some economies today are resources more productively. Tariffs, on the seed of the Second World War. seemingly using commercial policy to pur- other hand, encourage both the deflection of sue macroeconomic objectives. Tariffs can trade to inefficient producers and smuggling And the redistributions associated with dampen imports, boost net exports (the in order to evade them; such distortions tariffs tend to create vested interests, difference between exports and imports, or reduce any beneficial effects. Further,so harm tends to persist. Broad-based the trade balance), and so boost GDP, other consumers lose more from tariffs than protectionism can also provoke retaliation, things being equal. producers gain, so there is deadweight loss. which adds further costs in other markets.

10 | FORUM ISSUE 1 | 2019 THE ECONOMIC EFFECT OF TARIFFS

Output () Productivity () Unemployment (ppt) 0.4 0.4 0.4 0.2 0.2 0.3 0.0 0.0 0.2 -0.2 -0.2 -0.4 0.1 -0.4 -0.6 0.0 -0.8 -0.6 -0.1 -1.0 -0.2 -0.8 -1.2 -1.0 -1.4 -0.3 -1 0 A1 2 3 4 5 -1 0 B1 2 3 4 5 -1 0 C1 2 3 4 5 Inequality (ppt) Real exchange rate () Trade balance-to-GDP ratio (ppt) 0.35 2.0 0.4 0.3 1.5 0.3 0.25 0.2 1.0 0.2 0.1 0.15 0.5 0.0 0.1 0.0 0.05 -0.1 -0.5 0.0 D -0.2 -0.05 D -1.0 E -0.3 F -1 0 1 2 3 4 5 -1 0 1 2 3 4 5 -1 0 1 2 3 4 5 These results are for the full country sample as listed in Table 2 of NBER WP 25402/CEPR DP13389.

Moreover, economists believe macro- variables to changes in the tariff rate: real protectionism, and that tariff increases lead economic policies (fiscal and monetary GDP, productivity, the unemployment rate, to greater inequality after a few years. policies such as interest rates or the budget the real exchange rate, the trade balance We found that the hit to economic growth deficit) to be the natural instruments for and inequality. from a tariff increase is more pronounced if the achieving macroeconomic goals, such as We found that tariff increases have tariff increase is undertaken during an economic raising growth and jobs. Tariffs are more likely adverse domestic macroeconomic and expansion. It is also larger for advanced to lead to offsetting changes in exchange distributional consequences: these effects countries than it is for developing countries. rates that frustrate the achievement of are robustly and statistically significant, and This is worrisome, since tariffs are macroeconomic objectives; less imports and are large enough in an economic sense to currently being used as a macroeconomic a stronger trade balance increase demand for merit the attention of policymakers. instrument in buoyant economic conditions the domestic currency, and so its value. We also found that output (GDP) falls and in advanced economies. There is in addition a powerful lesson after tariffs rise because of a significant To summarize: the aversion of the from history. Protectionist policies helped decrease in labour productivity. When firms economics profession to the deadweight losses precipitate the collapse of international trade in the import-competing sectors receive caused by protectionism seems warranted. in the 1930s, and this trade shrinkage was protection, resources are reallocated within While the case against protectionism has a plausible seed of the Second World War. the economy to relatively unproductive typically been bolstered by theoretical or So while protectionism has not been much uses, and this is harmful to the added value microeconomic evidence, the macroeconomic used in practice as a macroeconomic policy, generated by the economy. That is, the case for liberal trade is also strong. Higher tariffs most economists emphatically consider that wasteful effects of protectionism lead to a seem to lower output and productivity, while this is as it should be. meaningful reduction in the efficiency with raising unemployment and inequality, and But times change. Some economies which labour is used, and thus to a fall in leaving the trade balance unaffected. These today are using commercial policy output. Nor did we find an improvement results are wholly consistent with conventional seemingly for macroeconomic objectives. in the trade balance after a rise in tariffs, wisdom from standard economics, and bolster Can we say something about what the likely plausibly reflecting our finding that the real the case for free trade. Protectionism just practical consequences of such actions are exchange rate tends to appreciate as a result weakens the macroeconomy. likely to be? In a recent study covering the of higher tariffs (a prediction that is in line vast majority of developed and developing with theory and much earlier empirical This article was first published on the World countries in the world, and half a century’s- evidence). We also found that protectionism Economic Forum’s Agenda and draws on joint work with Furceri, Hannan and Rose, published as worth of macroeconomic data, we examined leads to a small increase in unemployment, Macroeconomic Consequences of Tariffs, CEPR the responses of six key macroeconomic further bolstering the case against Discussion Paper 13389, December 2018.

FORUM ISSUE 1 | 2019 | 11 SPECIAL REPORT

Small and medium-sized enterprises: engines of the digital revolution

HOULIN ZHAO, Secretary-General, International Telecommunication Union Creating jobs and driving technological development are keys to growth © Shutterstock.com

ew technologies – from the Internet This digital revolution cannot happen of Things to artificial intelligence (AI) without small and medium-sized enterprises SMEs and entrepreneurs face very Nto 5G communications – hold great (SMEs). specific challenges, in particular potential for human progress. Along with micro and local businesses, an urgent need to develop local They are already enabling innovations start-ups and entrepreneurs, SMEs are crucial to skilled talent; access to new markets and sectors; and investment. in health, financial services, energy, trans- ensuring economic growth in a sustainable and portation and smart communities. They inclusive manner across developed and emerg- will be essential for the realization of every ing economies alike. Businesseswill increas- (ICTs) that power today’s digital economy, help- single one of the United Nations Sustainable ingly be a key driver of the development of the ing to ensure local needs for new digital services Development Goals (SDGs). information and communication technologies are met in all corners of the world.

12 | FORUM ISSUE 1 | 2019 © ITU © ITU

incubators; accelerators; and supportive SHARING CONNECTIONS A neutral, international platform to regulatory regimes. ITU has also increasingly focused our flag- promote global collaboration and Still, there is a pressing need for a ship event, ITU Telecom World, on fostering foster SMEs in the ICT sector for wider platform to share good practices, to the success of SMEs. economic growth and social good bring together ideas and initiatives that have ITU Telecom World 2019 in September is required to help SMEs reach their full potential. proved successful, to facilitate connections will attract participants from governments, between innovators, investors, industry and businesses and SMEs from around the world governments. A neutral, international plat- to showcase their innovations, share knowl- DRIVING THE DIGITAL ECONOMY form to promote global collaboration and edge, make new connections and explore ICT startups and entrepreneurs – and the foster SMEs in the ICT sector for economic new partnerships. solutions, applications and innovations growth and social good is required to help The event will include a special pro- they develop – are a fundamental source SMEs reach their full potential. gramme of activities and exhibition for of new jobs, with tremendous potential to This is where the International Tel- young people, entrepreneurs and innova- boost global, regional and national econo- ecommunication Union (ITU), the spe- tors. It will take place at a time when more mies. Flexible, adaptable, scalable and cialized United Nations agency for ICTs than half the world’s population is using the responsive, they can operate and innovate – with its established role as a central internet for the first time in history. anywhere there is connectivity, making a meeting place for public and private sec- South African President Cyril long-lasting impact on our societies and tors from emerging and developed econ- Ramaphosa last year described ITU Telecom markets. omies across the ICT ecosystem – has a World as ‘a guide to the future [where] SMEs and entrepreneurs face very spe- vital role to play. we are able not only to anticipate techno- cific challenges, in particular an urgent need ITU has the connections, experience logical change, but also to harness it for the to develop local skilled talent; access to new and expertise to serve the interests of small advancement of humanity.’ markets and sectors; and investment. and micro businesses, innovators and entre- The central theme of ITU Telecom Funding, whether from government, preneurs – and the socio-economic develop- World 2019 is ‘Innovating together: con- corporate or non-governmental (NGO) ment they can deliver. nectivity that matters.’ We will address sectors, is critical to take ideas to scale and Our organization has been based on key issues such as developing 5G through gain critical mass. However, it is always public-private partnership since almost its new partnerships, expanding connectivity in short supply and often extremely dif- inception 154 years ago. Today, some 600 through innovative funding and infrastruc- ficult to locate and secure. Regulatory bar- private companies and 160 academic insti- ture, collaborating for safe global cyber- riers can also be intimidating for SMEs, tutions take part in our activities. We are space, optimizing the use of AI for good particularly in converged markets where working hard to support and foster the – and much more. rules and approaches can be unclear or growth of small and innovative players in Consider joining us in Budapest, Hun- outdated. the sector to help them take the industry gary from 9-12 September as we explore The potential to change those con- forward. how to support the critical work of SMEs to ditions is in place. Many government ITU member states recently agreed to drive our shared digital economy forward. initiatives aimed at supporting digital entre- allow SMEs to reap the rewards of ITU mem- preneurship already exist, from national bership at reduced fees. We provide remote 1. Artificial intelligence poses challenges and opportunities. programmes seeking to foster innovation participation to many of our meetings to 2. ITU Secretary-General Houlin Zhou. to technology parks and hubs; business avoid travel and accommodation costs. 3. Innovation is at the heart of the ITU Telecom World.

FORUM ISSUE 1 | 2019 | 13 SPECIAL REPORT

Go big or go home: getting small business to think large

PHILIPPE GILBERT, President, Supply Chain Solutions, UPS

Using technology to create a global presence means more customers, revenue © UPS

f global trade were fashion, it would be Dig beyond grand headlines and you’ll Ia challenge to keep track of whether it see something bigger and more important There are multiple modes of was in the ‘what’s hot’ or ’what’s not’ that isn’t going away either. Worse, it can transport and harmonized tariff category. The broad-stroke headlines sug- prevent micro, small and medium-sized codes as confusing as the regulatory gest challenging headwinds one day and enterprises (MSMEs) from competing in a requirements attached to the goods being moved. As if that isn’t enough, great opportunities another. The reality is global e-commerce boom that is projected factor in excessive manual and paper- simple, though: global trade is not going hit $3.3 trillion this year and more than based forms and processes as well as away. We live in a deeply intertwined double to $6.7 trillion by 2025. The sticky duty drawback services. world. wicket? It’s called complexity.

14 | FORUM ISSUE 1 | 2019 MSMEs have an enormous and largely untapped market staring them © UPS in the face every day – it’s called ‘the world.’ However, if they don’t get some help to simplify the complexities of trading across borders they will become just another statistic.

Global trade is, quite simply, complex. When you consider the number of touch points for an international shipment, the intricacy of it all can seem daunting. Very quickly, you have to factor in working in multiple languages, working across time zones and trading in different currencies (which, of course, fluctuate). There are multiple modes of transport and harmonized tariff codes as confusing as the HERE ARE SOME TIPS FOR SMALL the planet each day and the technology regulatory requirements attached to the BUSINESSES LOOKING TO that makes it run plays no small part in goods being moved. As if that isn’t enough, ‘GO GLOBAL:’ smoothing the process of global trade. You factor in excessive manual and paper- Get expert advice. will want to put your key into a network based forms and processes as well as duty It sounds elementary, but surrounding your- that is ready to go for you on the first turn. drawback services. self with experts with an outside view is a Get excited. safe place to start. We can help. Our staff If you’ve got a good source for external TRADE AND TECH can see a problem from halfway around the advice lined up and a tech-ready network Pulling your hair out yet? Here’s the good world and, based on previous experience, in the wings, you’re ready to punch above news: the complexity of global trade can be know the solution before the challenge your weight and tap into new cross-border mitigated by technology. We work every sin- lands. As the world’s largest brokerage pro- markets. Since you know that the com- gle day to smooth the flow of digital trade. vider, we’re building even more expertise plexities are as great as the opportunities, When you’re moving 3% of the world’s GDP via strategic acquisitions. Most recently we you’ll be well-placed to combine trusted daily, as we do, efficiency is the name of the acquired Zone Solutions to add Free Trade outside advice and purpose-built technology game. We are committed to sharing these Zone (FTZ) services to our portfolio, as well together and be ready to scale. If you operate efficiencies with our customers so they can as Sandler & Travis Trade Advisory Services a women-owned businesses you can also get focus on what they do best, while we focus to provide expert legal and trade manage- help from UPS and The UPS Foundation’s on shipping and logistics. ment and consulting services. Women’s Exporters Program and the com- For example, we recently announced a Make smart technology purchases. pany’s new alliance with the United States new software platform called eFulfillment It won’t come as a surprise that you will Agency for International Development that immediately connects shippers to need purpose-built technology. An initial (USAID) – efforts meant to enable women- 21 online marketplaces. Plug in and we investment in software and a multi-language owned businesses to strengthen their skills take care of the rest. It’s turnkey. It allows website is enough to tell the world about in order to be able to export around the small businesses to market at scale with your product and respond effectively to globe. Another vital resource for women a fully managed presence on eBay, Wal- customer requests. Accurate online tracking entrepreneurs looking to enhance their vis- Mart, Etsy, Amazon and many others. services also give your customers predict- ibility on the global stage and get connected In a similar fashion, there’s a massive ability as well as the confidence to know with potential buyers, investors, suppliers need for a turnkey software platform to where a shipment is and when it will arrive. and business support organizations is ITC’s simplify the complexities of global trade. Seemingly small touches can have an SheTrades Initiative. MSMEs have an enormous and outsized effect. Once orders start rolling Being prepared to scale is another largely untapped market staring them in in, having the right supply chain and way of showing the world you’re ready the face every day – it’s called ‘the world.’ logistics partner by your side – one who for success. What are you waiting for? However, if they don’t get some help to can help you manage returns, distribution, Go global or go home! simplify the complexities of trading across warehousing and customs regulations – can borders they will become just another make the difference between success and 1. State-of-the-art technology is used to improve UPS’s statistic. They may never trade beyond failure. Today, our smart global network complex logistical operations. their own borders. moves nearly 21 million packages around 2. Drones allow UPS to reach clients in remote areas.

FORUM ISSUE 1 | 2019 | 15 SPECIAL REPORT

Why blockchain could become the new container of international trade

EMMANUELLE GANNE, Senior Analyst, World Trade Organization © Shutterstock.com

Digital record-keeping offers potential of lower costs, less cumbersome procedures

nternational trade in goods has experi- the Netherlands,, can produce a pile of enced comparatively little innovation paper 25 cm high and the cost of handling it The promise of greater efficiency and Isince Malcom McLean invented the can exceed the cost of moving the container. higher security is leading an increasing intermodal sea container in the 1950s. More than 100 people and 200 informa- number of financial institutions to Containerization revolutionized transport tion exchanges are involved in the process, explore how the technology could better facilitate trade finance processes. of goods. It cut freight costs drastically by leading to complex and often duplicative removing the need for repeated handling administrative procedures, which weigh of parcels. It did not, however, stream- most heavily on small businesses seeking to A blockchain is a digital record of line bureaucratic processes or eliminate participate in international trade. transactions – the term is used here in its paperwork. A new technology, blockchain, is seen generic form to refer to distributed ledger International trade transactions con- by many as the possible next game-changer. technologies. It is decentralized (no single tinue to rely heavily on paper forms. Ship- Could it become the new container entity controls the network) and distributed ping a container of roses and avocados of international trade? What makes this (records are shared with all participants) from Mombasa, Kenya, to Rotterdam, technology so unique? and transactions are shared, verified and

16 | FORUM ISSUE 1 | 2019 The opportunities that blockchain opens to facilitate and digitalize trade processes, enhance transparency and slash trade costs are potentially

detect counterfeits, track tainted products, and assert claims are legion. Provenance, Everledger and Blockverify are only a few of a myriad of startups offering such services. Several major retailers already use the technology on a day-to-day basis to track millions of products along their supply chain.

ENHANCING TRANSPARENCY The opportunities that blockchain opens to facilitate and digitalize trade processes, enhance transparency and slash trade costs validated on a peer-to-peer basis. Transactions significantly reduce the time needed to are potentially significant. While MSMEs are time-stamped and stored in a highly process transactions – in some cases from in particular can gain through lower fixed secure, verifiable and nearly permanent way several days to just a matter of hours. The costs and less burdensome procedures, thanks to various cryptographic techniques. development of blockchain-based trade these opportunities come with equally Smart contracts, i.e. computing programmes finance platforms could be particularly important challenges. that automatically enforce themselves when interesting for micro, small and medium- Like in the early days of the container, specific conditions are met, can be used to sized enterprises (MSMEs), which often before an ISO standard was developed, there automate transactions. struggle to access trade finance. is not one single type of blockchain. Instead, Likewise, key actors in the transpor- there are a myriad of different technologies REAL-TIME COLLABORATION tation and logistics sectors are rushing to using different consensus mechanisms Blockchain therefore allows participants with establish platforms that would connect all and ways to validate transactions. Many no particular trust in each other to collabo- actors along the supply chain, including platforms do not talk to each other, which rate on an equal basis in real time with the freight forwarders, ocean carriers and port poses a particularly acute problem in the guarantee that the information on the block- and customs authorities. IBM, a computer case of international trade as a single trade chain has not been tampered with. These company, and Maersk, a logistics firm, consignment can figure in multiple ledgers. unique characteristics make it a particularly opened the race with the launch of their Developing a single blockchain standard interesting tool to accelerate the digitaliza- Tradelens platform. Others are following is, however, unrealistic. Various distributed tion of trade and streamline trade processes. suit. Gains could potentially be significant, ledger technologies will continue to co-exist. The promise of greater efficiency and with estimated shipping costs slashed as Developing inter-operability solutions is higher security is leading an increasing much as 20%. therefore critical. Scalability also remains a number of financial institutions to explore The use of blockchain and smart concern, in particular for public blockchains. how the technology could better facilitate contracts could also help enhance the Last but not least, blockchain is only trade finance processes. With 80% of efficiency of various border procedures, a tool. It will only succeed in facilitating trade financed by some form of trade including certification and licensing; customs and digitalizing international trade if financing - letters of credit or supply chain clearance; revenue collection; identity manage- e-transactions are recognized and other legal financing - trade finance is the backbone ment; and post-clearance audit. Various issues clarified. of international trade. However, such proofs of concepts have been developed Blockchain could have a truly transfor processes, in particular letters of credit, to assess, for example, how blockchain mative impact on international trade. remain labour- and paper-intensive. could help facilitate procedures linked to It could become the new infrastructure That is changing. Various bank e-phytosanitary certification, though explo- underpinning international trade. Under- consortia including eTradeConnect, Komgo, ration is still in its early stages. standing the practical and legal implications the Marco Polo Network, Voltron and One of the most frequently cited of blockchain on international trade and we.trade have emerged recently to offer applications of blockchain in supply chains is striving to develop collective solutions to trade finance services based on blockchain. traceability. Examples of blockchain projects current challenges is key if this technology The first results are encouraging and to track products along the supply chain to is to have a chance to become the latest seem to confirm blockchain’s potential to prove their origin, attest authenticity, help transformer of international trade.

FORUM ISSUE 1 | 2019 | 17 GLOBAL VIEW

How technology is helping the transport sector become more sustainable

UMBERTO DE PRETTO,Secretary-General, International Road Transport Union

Technology is making border crossings faster, more secure and more efficient, reducing transport costs and boosting trade © Shutterstock.com

he road transport industry is an essen- Cost-effective and high-quality trans- tial element of the modern supply port systems are therefore indispensable to While innovation is clearly Tchain. It links production, distribu- the fortunes of any economy. However, in a powerful driver, it is not a tion and consumption across geographies to most of the developing world, where the flu- panacea. Tackling inefficiencies provide door-to-door services and connects idity of cargo and people is almost entirely in road transport services requires all supply chain stakeholders at the local, dependent on road transport, poor logistics frameworks to improve productivity, national, regional and global levels. performance often hinders economic and safety, competition, sustainability, transparency and overall Road transport also plays a crucial role social development. professionalism. Innovation in developing countries and regions that lack Improvements to road transport ser- has a part to play – but it is not alternative transport systems, such as railway vices in these contexts could have immediate the whole solution. infrastructure or inland waterways. In this beneficial impact. The social contribution of context, it is often the only available mode the road transport industry – which largely for landlocked developing countries to access comprises micro, small and medium-sized social welfare. The creation of new markets regional and global markets and participate in enterprises (MSMEs) – is also relevant in and trade corridors can significantly benefit cross-border trade. terms of employment, living conditions and the communities along the routes.

18 | FORUM ISSUE 1 | 2019 membership. YMM is the first domestic The social contribution of the road © IRU cargo transport dispatch platform in China transport industry – which largely to fully use the latest technologies in cloud comprises MSMEs – is also relevant computing, big data and mobile internet. It in terms of employment, living has more than 3.9 million registered heavy conditions and social welfare. truck drivers and more than 850,000 registered cargo owners. The efficiency benefits unfortunately not uncommon for payments of managing such vast numbers of transport to be delayed by days and sometimes weeks stakeholders are staggering. Taking one because transport operators need to show example, the average time for finding cargo signed CMR papers. In a business that was reduced from 2.27 days to 0.38 days. depends on profit margins in low single digits, Great digitalization examples can also cash flow is often an issue for daily survival. be found in different parts of Africa, where freight exchange platforms are booming and ECONOMIC IMPACT the M-Pesa phone-based banking and payment Equally, from the ground up, there is momen- system is used to pay for goods deliveries. GLOBAL MOBILITY tum to realize the benefits of better transport But while innovation is clearly a power- With global mobility a key factor in real- services. The stories that emerged from our 70th ful driver, it is not a panacea. Tackling inef- izing the United Nations 2030 Agenda for anniversary campaign – #WeLoveTheRoad – ficiencies in road transport services requires Sustainable Development, the International showed just how intimately transport impacts frameworks to improve productivity, safety, Road Transport Union (IRU) was actively economies and communities. competition, sustainability, transparency and involved in the drafting of the Global IRU is driving this wide-scale expan- overall professionalism. Innovation has a part Mobility Report, which includes vital contri- sion of trade corridors through our services, to play – but it is not the whole solution. butions made to chapters on efficiency and advocacy, certification and advisory work. universal access. The promotion of innovation, new tech- FAIR COMPETITION Highlighting the relationship between nologies, better connectivity, profession- Professionalism needs to be driven by an cross-border connectivity and economic pros- alism and harmonization is at the fore of enabling regulatory environment generat- perity, IRU put the spotlight on trade and trans- our endeavours together with our partners ing fair competition and quality of service. port facilitation through the implementation of across the globe. Access to the profession should be evalu- tried and tested United Nations conventions. While Europe and Eurasia make clear ated by qualitative criteria, so licenses and The next steps are to focus on transport steps towards the adoption of digital trans- rules should be framed around the quality performance measurements. These include port documents, these regions can learn of service rather than the quantity of – for efforts to incorporate tangible services and tools from the practical experiences of Brazil and example – trucks or loading bays. This can such as TIR (the global customs transit system) Mexico. In both countries transport con- only be achieved where there is consistent and e-CMR (electronic consignment notes) as signment notes have been electronic for enforcement and transparency. If not, the sustainability implementation indicators. several years, providing increased transpar- playing field is no longer level. As road transport becomes increasingly ency between stakeholders and simplifying In the context of emerging economies, digitized, connected and automated, new compliance with regulatory processes. IRU strongly supports efforts to review the technology, business models, legal frame- Looking at the road transport system regulatory environment at the regional level. works and investment strategies – together in the United States of America, the main The move towards a quality-based, multilat- with changing trade patterns, market needs digitalization effort in the past few years has eral regulatory framework for road transport and environmental expectations – are trans- been the introduction of electronic logging is very positive. With trade so reliant on forming the landscape. devices (ELDs). From 18 December 2017, road transport, increased efficiency will yield While 2019 marks the 70th anniversary of ELDs have been mandatory on all trucks untold economic growth. This is particularly TIR, it is a 21st century digital tool. The system operating in the United States. This intro- pertinent for MSMEs operating in sometimes is fully intermodal. It makes border crossings duction was preceded by discussions on top- remote, underdeveloped regions with lit- faster, more secure and more efficient, reducing ics such as how ELD data will be used by tle transport infrastructure. The use of new transport costs and boosting trade. Importantly, the authorities and how data security will technology and innovation to drive these with the recent accessions of China, India and be ensured. While different in its implemen- efficiencies offers a way forward to long-term Pakistan it is now poised to serve a further 40% tation from European digital tachographs, sustainable development. of the world’s population and to connect some which have been in place for many years, of the world’s largest economies. both solutions share the same purpose of Together with the electronic consign- recording driver time and occupation. ment note, these digital systems will increase We are also very pleased to count 1. While 2019 marks the 70th anniversary of TIR, transparency, accuracy and the speed of the intelligent logistics information plat- it is a 21st century digital tool. business processes. In Europe, today it is form Yunmanman (YMM) within the IRU 2. IRU Secretary-General Umberto de Pretto.

FORUM ISSUE 1 | 2019 | 19 SPECIAL REPORT

Africa’s green opportunity

CAMAREN PETER, Associate Professor, Allan Gray Centre for Values-Based Leadership, University of Cape Town © Shutterstock.com

How African cities can harness green technologies for growth and jobs

n 1967 one gigabyte of hard drive storage worlds has come to be known as the ‘fourth Ispace cost US$ 1m. Today it’s around two industrial revolution’. Absorbing green and sustainable US cents. Computer processing power So far, relatively little attention has technologies can help seed small has also increased exponentially: it doubles been paid to the overwhelming potential of to medium-sized enterprises on every two years. This is just the tip of the the fourth industrial revolution to catalyse a large scale and increase their investment appeal. iceberg when it comes to technological much needed transitions to a more sustain- progress in the 21st century. able society – particularly in the developing There have also been tremendous world. System Initiative’. These documents have advances in communication technology; This is slowly starting to shift. The World begun to address some key questions around robotics; nanotechnology; genetics and arti- Economic Forum recently published a set of the potential role of the fourth industrial ficial intelligence, among other things. This briefs as part of its ‘Shaping the Future of revolution in supporting the United Nations merging of digital, physical and biological Environment and Natural Resource Security Sustainable Development Agenda.

20 | FORUM ISSUE 1 | 2019 © Shutterstock.com

don’t require major infrastructure investment. UNLOCKING OPPORTUNITIES Economic diversification and And their decentralised nature enables them And, perhaps the biggest boon of them all: development on the continent could to keep up with cities as they change. the fourth industrial revolution presents a benefit considerably from harnessing The introduction of green technol- massive opportunity to leapfrog African coun- the opportunities emerging in ogy solutions and systems can also bring tries’ productive economies into a wholly the green technology and fourth down household costs. Between 50 and new space. industrial revolution spaces. 70% of poor African households’ budg- Economic diversification and develop- ets are spent on food, water, energy and ment on the continent could benefit con- There are many compelling reasons for transport. This makes them vulnerable to siderably from harnessing the opportunities combining the offerings of the fourth indus- external shocks such as sharp rises in the emerging in the green technology and fourth trial revolution with new green technolo- costs of electricity, oil and petroleum, food industrial revolution spaces. This will shift gies, infrastructures and systems to tackle and water. them onto a significantly new economic the developing world’s challenges. Multiple These factors are also interlinked: for growth and developmental trajectory. It will benefits can be realised through introducing example, if oil prices rise, so do the costs of also go a long way towards ensuring that as these offerings in new, innovative ways that transport and food. That places extra pres- emerging economies develop, they will do so are customised for local contexts. sure on already struggling households. in a manner that doesn’t exacerbate climate These green technologies can generate Green technologies can buffer poor change and environmental degradation. employment, ease pressure on infrastructure households from these shocks by decou- A number of African countries are in rapidly growing cities and lower energy pling them from their dependence on local already positioning themselves to harness costs, especially for poorer households. grids and provincial, national or global sup- this opportunity. Both Rwanda and Ethio- ply systems. pia, for example, have placed green eco- CHANCE FOR CHANGE That’s at a household level. Then there’s nomic development and sustainability at Unplanned slums and informal settlements the bigger picture. Absorbing green and sus- the heart of their national economic devel- present systemic problems in most develop- tainable technologies can help seed small to opment strategies and plans. More recently, ing world cities. This is particularly the case medium-sized enterprises on a large scale Kenya has committed to actualising a 100% in both large, established and smaller, emerg- and increase their investment appeal. transition to green energy by 2020. ing African cities. Municipalities are under This, in turn, can drive economic growth Other African countries would do well strain. They simply don’t have enough bulk and get cash circulating at the levels where to follow these nations’ examples. The fourth infrastructure – water, sanitation, electricity it’s most needed. industrial revolution is here. Combining it and waste management facilities – to cater Introducing new technologies to a city with green technology is a way for the con- for growing populations. is a great job creator. People are needed tinent to benefit at all levels.

The value of green technologies and sys- to install solar panels, solar water heaters, This article was first published by The Conversation. tems is that they are largely decentralised or biogas digesters, energy savings devices; or semi-decentralised. Examples include solar to set up urban agriculture and permacul- panels, energy saving devices, and small-scale ture operations. There are already examples 1. A solar-power plant in Uganda. wind and hydro energy technologies. These of this in several African cities. 2. A wind farm in South Africa.

FORUM ISSUE 1 | 2019 | 21 SPECIAL REPORT

Taking a closer took: the impact of tech on trade

ZIYANG FAN, Head of Digital Trade, World Economic Forum, and ULRICH MANS, Innovation Attaché, Netherlands Embassy Washington

Applied effectively, blockchain and artificial intelligence are among tools that can benefit buyers and sellers alike © Shutterstock.com

igital technologies are rapidly chang- This article introduces a visual aide to ing every aspect of our societies, and clarify how digital technologies relate to the Artificial intelligence, blockchain, and Despecially international trade where three basic components of international trade digital payment systems could help all these technologies are converging. From in goods***. For each of these digital layers we build trust and speed transactions artificial intelligence (AI) and distributed see a variety of new applications. while lowering costs and barriers ledger technology (DLT)* to 3D printing and to entry, especially for small and medium-sized enterprises (SMEs). 5G networks, emerging technologies are no DIGITAL FINANCE longer abstract ideas but daily realities of The financing and payment of international international trade. trade transactions have traditionally been a credit to participate in international trade, and An article published by the World Eco- hurdle for many stakeholders, often result- some 75% of the affected businesses were SMEs. nomic Forum (WEF) in 2018 explored the ing in complex structures, costly intermedi- With potential advantages in disinterme- potential impact of various technologies on inter- aries, and lengthy processes. AI, blockchain, diation, real-time review, trust-building, and national trade. As technology moves fast, it is and digital payment systems could help build transparency, blockchain has been a popular time to zoom in on some of the concrete applica- trust and speed transactions while lowering technology to deploy among international trade tions of digital technologies starting to gain trac- costs and barriers to entry, especially for stakeholders, from banks to shipping com- tion, particularly trade in goods**: digital finance, small and medium-sized enterprises (SMEs). panies to tech-solution providers. For exam- digital shipping, and digital compliance. We see On trade financing in 2017, there was a ple, we.trade, a platform backed by IBM and growing interest among tech and trade experts in trade financing gap of $1.5 trillion, the Asian 14 major European banks, offers to provide exploring the role of digital technologies for each Development Bank estimates, representing 10% more companies with easier access to trade section of the value chain, the pain points they of global merchandise volume. This gap means financing with increased trust and transparency could address, and their potential challenges. many businesses didn’t have access to sufficient enabled by blockchain. Another example can

22 | FORUM ISSUE 1 | 2019 ITAL FINANC For example, port operations depend on trade single window. The policy framework DIG E the seamless transfer of goods across various will be implemented in a specific pilot project handlers. Blockchain solutions have the benefit in Argentina to build a neutral and trusted BUY/PAY of immutability and – if applied successfully environment for bilateral and global interop- – can reduce fraud. When everybody relies erability of national trade single windows. E

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N G on the same database to verify the status of a In addition to blockchain, AI is being

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G erlands aimed at paperless trade, in collabora- sis, and streamline complex processes. For

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D tion with Samsung Digital Software and Dutch example, Korea’s Customs Service has been bank ABN Amro NV. Similarly, suppliers of leafy experimenting with using AI to help with green vegetables for American retailers such as the screening and assess the risks of items to Source: United Nations/CEFACT International Walmart Inc. are required to upload their data deal with increasing e-commerce volume. Supply Chain Reference Model to the blockchain so produce could be traced from farm to table to ensure food safety. LOOKING FORWARD The digital divide is still growing. Looking at AI-related trends, a growing Digital technologies are constantly evolv- But the need for scale also means number of port-related projects across the globe ing, and can disrupt global trade as it is con- that there is a clear incentive to target digital tracking systems that include sen- ducted today. New developments such as implement the political agenda of sors, IoT devices or automatic image-recog- AI, blockchain and 5G raise new questions the Sustainable Development Goals. nition software to ensure that port authorities on their impact on trade. The good news is know the movements of every single shipment that TradeTech is in a good starting position. be found in Malawi, where a blockchain-based by any handler at any moment. Autonomous Trade by definition is scalable. This provides system creates a verifiable and transparent audit transport technologies, such as stacking, cran- market incentives for technology develop- trail to offer cheaper finance for local tea farmers ing and quayside loading – as well as autono- ment and adoption. The flip side is that there who implement sustainable practices. mous ships – are also being tested in locations is still a long way to go in terms of technol- Artificial intelligence also plays a role in including Shanghai, Rotterdam and Hamburg. ogy adoption, especially between developed digital finance. A startup in China is using Both blockchain and AI technologies are and developing countries. The digital divide algorithms to issue millions of microloans set to impact digital shipping in the medium is still growing. But the need for scale also to enable the “underbanked” access credits term. Ongoing experimentation has already means that there is a clear incentive to imple- online quickly. Instead of asking for finan- brought together various players of the logis- ment the political agenda of the Sustainable cial history that many in the “underbanked” tics community in their need to adopt to the Development Goals. SDG 9 calls for innova- populations don’t have, the algorithms ana- digital age. It is still early days, but it is worth tions for an inclusive global trading system, lyze unique variables, such as typing speed watching the pioneers as some of these tech- including improved access by SMEs across the and phone battery percentage, to predict nologies mature. globe to international supply chains. repayment with over 90% accuracy. During a recent World Economic Forum Digital payments also become increas- DIGITAL COMPLIANCE event it became clear that the tech sector is ingly important, especially mobile payment Driven by the potential to offer reduced already on board with trade experts seeking to options, such as M-Pesa, Paytm, and Alipay. administrative costs, improved security, push for innovations in the sector. An impor- These have already significantly lowered the decreased clearance time, and increased trust tant caveat in this debate: TradeTech will not bar for buyers and sellers to gain access to among parties, government authorities around succeed if it is built on a disruption-only model. global e-commerce and trade, in particular the world have started to test blockchain to To increase adoption across the various busi- SMEs in developing countries. In addition, ensure compliance across the trade ecosystem. nesses involved along the international trade the introduction of Central Bank Digital Cur- For example, in anticipation of Brexit, roadmap, we need to develop trusted technolo- rency (CBDC), the digital form of fiat money, the UK and Northern Ireland anticipated a gies, which properly reflect concerns including could have a significant impact on interna- 363% increase in customs declarations on fairness, equal access, and data protection. tional trade if adopted globally. It could boost trade between itself and the European Union. *In this article Distributed Ledger Technology, financial inclusion and access to credit. The UK customs agency in 2017 conducted or DLT, is used interchangeably with a blockchain pilot aimed at reducing admin- blockchain, for ease of reference. DIGITAL SHIPPING istrative and coordination costs while auto- **Digital technologies have made important impacts on trade in services as well, from digital services When goods move from A to B, digital technolo- matically detecting anomalies and enabling platforms to AI-assisted language translation, but gies can play multiple roles in making shipping compliant shipments to clear customs faster. this article will focus more on trade in goods. faster, cheaper, and more reliable. However, some Meanwhile, the WEF is working with ***The model is inspired by the UN/CEFACT technologies develop more quickly than others. the Inter-American Development Bank to International Supply Chain Reference Model of ‘Buy- Ship-Pay’ and modified for digital trade context; as the Looking at recent examples, it is worth noting that co-design a framework for policymakers on sequencing and components of international trade are blockchain-based applications are gaining traction. how to deploy blockchain in the form of a complex and varied, this model is for reference only.

FORUM ISSUE 1 | 2019 | 23 SPECIAL REPORT

Efficient harvests, effective transport can eliminate hunger

SILVIA GAMBOA, Head of Sustainability and Environment, APM Terminals Moín

How public-private partnerships to improve port infrastructure can positively impact the Global Goal © APM Terminals Moín APM © Terminals

ost-harvest management is closely logistics; lack of technology; insufficient related to United Nations Sustainable skills; knowledge and management capacity Once the terminal is fully operational P Development Goal (SDG) 2 – ending of supply chain actors; and lack of markets. average waiting time is expected hunger and all forms of malnutrition world- On the other hand, food waste refers to be slashed from 19.4 hours to wide by 2030. The post-harvest system should to food appropriate for human consumption 1.4 hours, while average berthing time is expected to drop from be thought of as encompassing the delivery of being discarded. It occurs at the food-chain 20.0 hours to 14.0 hours. a given crop from the time and place of har- (retail and final consumption) level and vest to the time and place of consumption, relates to retailers and consumers behaviour. with minimum loss, maximum efficiency and Food wastage also refers to any food lost by connectivity, enable worldwide efforts to reduce maximum return for all involved. deterioration or waste and includes both food insecurity in an increasing world population. Food loss refers to the decrease in food loss and food waste. For example, in the case of Costa Rica, post- edible food mass or nutritional value of One third of global food wastage happens harvest handling of pineapples and bananas food intended for human consumption. during post-harvest and transportation phases. serves a key role in minimizing post-harvest loss It is mainly due to poor infrastructure and For this reason improvements in liner shipping and increasing available global fresh fruit supply.

24 | FORUM ISSUE 1 | 2019 In Limón, one of the ongoing corporate responsibility projects entails establishing APM Terminals as the strategic partner for a food bank branch to serve the port region. It is estimated 5,000 daily plates are Moín APM © Terminals delivered to the population through this effort.

AGRICULTURAL EXPORTS The Central American nation has in recent years been ranked years as the world´s largest exporter of fresh pineapple and among the 10 largest exporters of bananas. Pineap- ple exports from Costa Rica have increased up to 400% in the last decade, making it the Construction of the new Moín con- around 45% of the costs insurance and top agricultural export product, above tradi- tainer terminal began in 2016 and opera- freight price on transport and logistics. tional ones such as bananas and coffee. The tions started there in February 2019. The The investment in the new Moin Con- export destinations for these fresh fruits is main driver of the terminal concerns reefer tainer Terminal operated by APM Terminals mainly North America and Europe. exports, mainly bananas and pineapples. are expected to drastically reduce inefficien- However, Costa Rican pineapple and Once the terminal is fully operational aver- cies, delays, unreliability, inventory costs banana exporters face logistics costs of up to age waiting time is expected to be slashed and allow the percentage of post-harvest half the value of the content of a container. from 19.4 hours to 1.4 hours, while aver- food loss happening to be reduced sig- Fresh fruit products have no tolerance for age berthing time is expected to drop from nificantly. Local partnership and additional lack of cooling after picking. A clear exam- 20.0 hours to 14.0 hours. Overall this cor- efforts to reduce food wastage ple is pineapples, which are very vulnerable responds to a total reduction in port turna- APM Terminals and the Maersk Group to unreliability and inefficiencies. It is esti- round time of about 60%. Also in the first are channeling efforts to reduce post-harvest mated that unreliability, delays and hedging years, an increase in container throughput wastage. In Limón, one of the ongoing corpo- costs can add up to 26% of the costs per con- from 1.10 million to more than1.36 million rate responsibility projects entails establishing tainer to exported pineapples. is expected as Costa Rican trade increases. APM Terminals as the strategic partner for a The new terminal is expected to food bank branch to serve the port region. It PORT INFRASTRUCTURE eliminate 70% of current delays. By con- is estimated 5,000 daily plates are delivered As reported by Costa Rica’s Caribbean Port cession expectations, waiting time can be to the population through this effort. Administration Bord (JAPDEVA), in 2014, maximum 10% of the berthing time. Under Now that the Moín Container Terminal average waiting time at Costa Rica’s Limón- these assumptions, average delay should be is operational, part of the efforts of the Moín terminals was 19.4 hours while berth- reduced to less than 2.4 hours. project will include distributing harvested ing time was nearly 20 hours. Average Within only the first year of the new fresh fruit and sub-products to regions delays were up to 15 hours, mainly due to terminal fully operational and given there of Costa Rica. These will come from our low weather resistance, low productivity, are six STS cranes in the new terminals, it clients’ operations, mainly products that for closings and vessel crane breakdowns. is expected that the berth moves per hour some reason cannot reach the exportation Costa Rica´s liner shipping connectivity (BMPH) will increase from 13 to more than phase (normally considered food wastage) – a measure of how well a country is con- 60. Also, given the increase in BMPH com- but are perfectly adequate for human nected through regular and frequent con- bined with the increased berth length and consumption. For example, a container tainer transport – was until last year in the water depth allowing bigger fully cellular carrying fresh pineapple that does not meet lowest quartile worldwide and the country vessels, it is calculated the berth moves per the size guidelines for international markets ranked very poorly on the Global Port Infra- call will increase from 915 to over 1900. and therefore does not make it to the structure Quality Index. vessel- instead of being discarded -would Its port infrastructure until 2017 had REDUCING TRADE COSTS be distributed through the food bank to impeded trade and caused high transport By reducing unreliability, the terminal is local Costa Rican entities taking care of and logistics costs, including subsequent expected to reduce trade costs by 15% and populations at risk, in example daycares. high costs for farmers and exporters due consequently a reduction in post-harvest to food loss. Transport inefficiencies also losses will follow. This may help improve caused delays; unreliability; long transport the competitiveness of Costa Rica’s pine- and lead times; increased inventory costs apple exporters, which despite significant 1. Pineapple harvest in Costa Rica. and proportional post-harvest food wastage. improvements in productivity still spend 2. Pineapples being sorted and prepared for export.

FORUM ISSUE 1 | 2019 | 25 SPECIAL REPORT

Smart policies help Hungary’s MSMEs benefit from the fourth industrial revolution

TAMÁS VATTAI, First Secretary, Permanent Mission of Hungary to the United Nations and World Trade Organization © Shutterstock.com

Digital transformation programmes provides opportunity to improve economic output while increasing connectivity

he fourth industrial revolution offers a large companies is another important factor Tunique opportunity for countries with promising large growth potential. Close to half of workforce activities in smart economic policies, which aim Accelerating digitization and converg- Hungary today could be automated to boost energy efficiency and sustainable ing towards a technology-driven economy by 2030 using technology that is transport, to raise domestic value added and can increase Hungarian GDP growth by an already available, leading to greater productivity. increase economic growth. extra half percentage point each year until Such policies on one hand have to 2025, according to global management con- improve the ecosystem horizontally for sultancy McKinsey & Co. Close to half of and currently under-digitized sectors, such business actors. On the other they have to workforce activities in Hungary today could as manufacturing, agriculture and trade, target strategically important sectors, where be automated by 2030 using technology show significant automation potential. digitization can have the most impact. Closing that is already available, leading to greater For a successful digital transition, the productivity gap between micro, small productivity, the analysis shows. It is par- Hungary adopted in 2016 the Industry and medium-sized enterprises (MSMEs) and ticularly the historically workforce-intensive 4.0 programme. This focuses on sectors

26 | FORUM ISSUE 1 | 2019 that have already a strategic importance in the economy and in which digitization, Hungary has reduced the higher research and development can administrative burden for business, including by introducing single considerably raise the value added window government services. By 2020, content. These targeted sectors include © Shutterstock.com all public services will be electronic. the electric and automated vehicles; e-health; tourism; digital trade; and smart agriculture industries. Supporting MSMEs Meantime the ‘Program Your Future!’ is a key aspect of the industry development scheme aims to increase the number of strategy as these companies contribute students that graduate in information and 54% of Hungarian GDP and employ 70% communications technology (ICT); improve of the nation’s workforce. the cooperation between the educational Some Hungarian MSMEs are institutions and the ICT sector; and increase the successfully integrated in global value popularity of technology-related professions. chains, especially automotive suppliers and Furthermore, Hungary has introduced an pharmaceutical companies. However, most education system for vocational schools and in MSMEs are less productive than larger tertiary education which is practice-based and companies. Closing this gap in productivity builds on industry needs. and applications. Currently, ICT experts are and increasing the ability of MSMEs to bring Innovation plays a key role in formulating currently evaluating the digital maturity of innovative products and services to the the ecosystem. The renewed research and MSMEs to determine how prepared a given market represent a major opportunity for innovation strategy forecasts an increase of company is to adapt to digital changes. improvement to the whole economy, given R&D expenses to 1.8% of GDP by 2020. It Based on this evaluation a tailor-made ICT the high share of these companies in GDP puts universities and science/technology parks development strategy is prepared for the and employment. In order to enhance their at the centre of the innovation ecosystem. company to optimize and to automatize its productivity the government is improving Science parks create new business production processes. the business ecosystem for doing business opportunities for MSMEs, which can In the Supplier Development Programme and has introduced tailor-made development collaborate with universities and other firms larger companies help MSME suppliers programs for MSMEs. in R&D activities. One example is ZalaZone, develop and produce value-added products, a complex development project with the aim adopt Industry 4.0 technologies and improve IMPROVING THE ECOSYSTEM of providing an optimal test environment to their human resources capabilities. Partici- Hungary has reduced the administrative electric, autonomous and connected cars pating MSMEs can be integrated into the burden for business, including by introduc- incorporating smart-city and smart-road global supply chains as they become certified ing single window government services. solutions. With this project Hungary is seeking suppliers of multinational companies. By 2020, all public services will be electronic. to position itself as a R&D centre for modern A new programme intends to build The time to start a business has decreased mobility technologies (hybrid, electric and national MSME champions. It selects a from 3.5 days to 1 day and the cost of start- autonomous driving). The project is set up set of MSMEs based on their growth and ing a business has fallen from €363 ($410) to in cooperation with Austria and Slovenia. export potential. They receive tailored and 105. Most companies file tax returns elec- Leveraging strengths of neighbouring countries special assistance including financial advi- tronically. Hungary has the European Union’s encourages regional cooperation and planning in sory services and grants to develop their most competitive company income tax with R&D instead of developing solutions in isolation. products or services, promote their brand a 9% flat rate. Research and development and company images and improve their (R&D) costs can be deducted from corporate TARGETED DEVELOPMENT production processes and corporate organi- income tax bases. PROGRAMMES zations. The initiative can serve as a paragon Automation and digitization of the There are Industry 4.0 model factories in of what MSMEs can achieve by leveraging economy will cause significant shifts in the Hungary where 14 different types of tech- instruments available to all, inspiring other labour market. Reskilling the workforce is nologies are showcased and MSMEs can companies to follow. essential to manage this transformation. The learn about modern production manage- Finally, MSME financing has improved strongest demand will occur for both basic ment, big-data solutions, 3D printing and remarkably in the last few years. Credit and advanced technological skills. autonomous robots. With the help of men- schemes as the Funding for Growth The Hungarian Digital Education Strategy tors they can prepare their own intelligent Programme of the Hungarian Central Bank will introduce digital pedagogy methods in factory development plan tailored to their have had positive effect on access to loans public education and will reshape adult and needs and level of development. and MSMEs investment. professional education. For example, it sets up Similarly, the Modern Business hotspots for digital competence development Programme aims at increasing digital entre- 1. A view of Budapest, Hungary’s capital. to ensure digital learning workshops are preneurship and digital skills of MSMEs as 2. Hungary expects its R&D expenses to increase to 1.8% available for adult education. well as the professional use of ICT devices of GDP by 2020.

FORUM ISSUE 1 | 2019 | 27 SPECIAL REPORT

Africa’s potential ‘born digital’ trade agreement

CRAIG ATKINSON, consultant, International Trade Centre The African Continental Free Trade Area Agreement has the potential to be innovative in its conception as a 21st century arrangement and become the world’s first ‘born digital’ trade agreement © Shutterstock.com

he African Continental Free Trade Area to rise by more than 50%. The AfCFTA T(AfCFTA) agreement, presently signed also has the potential to be innovative in its A ‘born digital’ AfCFTA would make by 52 African Union (AU) member conception as a 21st century arrangement the agreement easier to access, states, is remarkable in its geographic cover- and become the world’s first ‘born digital’ understand and apply. At the most age and ambition to create a single market trade agreement. basic level, this would imply the creation of an authorized ‘machine for the continent. The agreement’s exten- consumable’ translation of the text. sive protocols will cover trade in goods, TRADE CHALLENGES trade in services, investment, competition Free trade agreements, negotiated for the and intellectual property rights. benefit of businesses and consumers, can be and domestic rules. These issues are com- Following its ratification by the Gambia challenging to understand and apply. Even pounded by the reality that legal texts are in April 2019, the agreement is now set to legally trained experts may find it difficult often difficult to access – whether unavail- shift the nature of economic relations in to navigate the complex array of interac- able electronically, not up-to-date or not the region: intra-African trade is expected tions between different trade agreements easily searchable.

28 | FORUM ISSUE 1 | 2019 relevant clauses of the AfCFTA agreement as algorithms. Creating a digital translation and schedules of executable rules would ensure consistency across the entire trade

© Shutterstock.com area and reduce the need for individual member states to duplicate resources in digitising the agreement. A digital AfCFTA would be able to support trade-facilitation systems and dramatically enhance the deployment of any single window. There are also significant implications for the automation of cross- border e-commerce in the free trade area as platforms would be able to fetch and apply rules in real time.

trade agreement could, and should, equally A TEMPLATE FOR THE FUTURE If executed correctly and practically focused, the benefits of the AfCFTA represent any natural language counterpart. Because the AfCFTA is implemented by AU can be more easily realized and its To add to usability, computational clauses, member states, computer executable rules intended beneficiaries can get the navigational aids and meta-data information would need to exist as a template to seam- most out of it. could be integrated via digital formats. lessly integrate into national customs systems. Use of emerging standards such as Legal Ideally, these computer-language versions of RuleML would enable users to easily search laws will be openly accessible. With the rules Survey data from the 2018 ECORYS and jump between related sections. Meta- coded in this way, individuals without trade Study on the use of Trade Agreements data on specific sections could help users to or legal training – such as small traders – can Final Report suggests that key barriers to identify particular provisions. This would be more easily ensure they are seizing the ben- the use of free trade agreements include especially helpful for those unfamiliar with efits of the AfCFTA. Over time, these rules limited availability of information and that legal and trade terminology when searching could be integrated with other systems, such information is difficult to understand. This can for relevant parts of an agreement. as e certificates of origin, as well as other digi- mean intended beneficiaries do not use the A digital AfCFTA also provides an tal tools important to trade, such as financing agreements to their advantage, undermining opportunity for home-grown innovation. mechanisms, payments systems and digital expected economic and social outcomes. Creating a machine consumable version of identity mechanisms. While effective use of the rules the agreement would provide developers A digital AfCFTA will make it more sim- presents a challenge for all businesses, it with the means to layer other technologi- ple and cost effective for those who engage in is especially problematic for micro, small cal solutions over the digitally expressed trade to access, interpret and apply the new and medium-sized enterprises (MSMEs). clauses, making them even more user rules. If executed correctly and practically This is due to the resources they require for friendly and accessible. focused, the benefits of the AfCFTA can be interpretation, determination of calculations more easily realized and its intended benefi- and compliance with documentation. As the ‘RULES AS CODE’ ciaries can get the most out of it. majority of businesses in Africa are small, Several initiatives are making progress in the Fortunately, there is more than enough the AfCFTA must target these enterprises area of ‘rules as code’. For example, New legal, developer and technical talent in to meet its objective to ‘promote and attain Zealand is providing domestic laws in the Africa to ensure such a version of the sustainable and inclusive socio-economic Extensible Markup Language (XML). Glob- agreement could be achieved. There is a development’. Fortunately, legal technology ally, the Xalgorithms Foundation is working good case for leapfrogging access to trade can improve access to, and the functionality to enable the availability of legislation in agreements through technology in the of, trade agreements for different user automation-friendly, computer-executable African context. All that is needed is the will groups, including enterprises, customs forms. Its alliance of contributors has devel- to make it happen. agencies and policymakers. oped components for online publishing, dis- covering and fetching of digitally expressed A ‘BORN DIGITAL’ AGREEMENT laws via an ‘Internet of Rules’. A ‘born digital’ AfCFTA would make the Thus, a ‘born digital’ AfCFTA could agreement easier to access, understand include online schedules providing and apply. At the most basic level, this executable forms of rules to be used to would imply the creation of an authorized automate cross-border transactions that ‘machine consumable’ translation of the involve the determination of calculations. 1. The Port of Durban, South Africa. text. Such a computer-friendly version of a To do so, it would be necessary to express 2. A truck with bananas in Kampala, Uganda.

FORUM ISSUE 1 | 2019 | 29 ITC IN ACTION

Improving Afghan food safety to boost exports

Technology, teaching, training initiatives help producers increase yields, profits

ave you ever seen a grape this big?’ a small plum, plucked from a row of vines Bharat Toshar from Euro Fruits asked exposed to an experimental blend of drip While WTO membership is designed Hhis guests, rotating the engorged irrigation and fertilizers. to facilitate both imports and exports, green fruit for all to see. Squeezed between The speaker was director of opera- no member is obligated to accept the food imports of another member rows of vines resting on trellises, the visitors tions at Euro Fruits, a Mumbai, India-based if they do not meet established food being questioned slowly shook their heads. exporter of fresh produce. His audience was safety requirements. The grape in question was nearly the size of composed of Afghan government officials

from relevant Afghan agencies. Funding was institutions when it comes to food safety. I am sure that their experience in provided by the European Union as a part According to the government’s Food Safety India and their first-hand knowledge of the three-year Advancing Afghan Trade Act of 2016, the responsibility for food of how FSSAI functions will help them (AAT) initiative. safety control is segmented between differ- to structure a food authority ‘The primary objective of this capac- ent ministries and agencies. The ministries in Afghanistan. ity-building exercise was to help the par- of public health, agriculture, irrigation and ticipants understand how to set up a food livestock, industry and Commerce and the representing a range of ministries related to regulatory system,’ said Sanjay Dave, a lead- Afghanistan National Standards Authority food production and trade. ing expert on food safety recruited by AAT to each play different roles. Officials from all While members of the Afghan delegation help develop the programme. The idea was four of these institutions were represented relished the opportunity to learn about the to give participants both a macro and micro in the delegation. farm’s advanced irrigation system – grapes perspective on India’s food safety apparatus, and raisins are two of Afghanistan’s most cel- he said. Destinations included Chandigarh, FOOD-SAFETY ROADMAP ebrated products – agricultural training was where participants received instruction on Through the programme in India, ITC aims not the purpose of the excursion. Toshar was market inspections; Kochi, where the focus to support the Afghan government in analys- explaining how Euro Fruits worked with its was on import and export procedures; and ing the current division of food safety-related suppliers in the Indian state of Maharashtra New Delhi, where the delegation visited a responsibilities among its various institu- to implement a system of traceability for food-testing laboratory and received a num- tions. The participants would then have the its products. Every unit of grapes that Euro ber of briefings. requisite knowledge and technical support Fruits shipped around the world could be The programme comes at a critical time to develop a roadmap for strengthening food tracked down to the exact plot of land where in Afghan economic development, with the safety related activities in order to oper- it was harvested. If contamination was dis- government looking to reap the full benefits ate more efficiently and effectively. Pawan covered in one cluster of grapes, others from of its 2016 accession to the World Trade Agarwal, chief executive of FSSAI, is con- the same farm could be identified and pulled Organization (WTO). While WTO member- fident about Afghanistan’s future prospects. from storage facilities without the entire ship is designed to facilitate both imports ‘I am sure that their experience in India inventory being compromised. and exports, no member is obligated to and their first-hand knowledge of how FSSAI accept the food imports of another member functions will help them to structure a food FOOD-SAFETY TOUR if they do not meet established food safety authority in Afghanistan,’ Agarwal said.

The instruction on traceability was just one requirements. component of a larger training programme Afghanistan continues to struggle with on food safety undertaken by the members food safety compliance issues in exports, of the Afghan delegation. The itinerary for which are caused by a number of factors. their tour, which stretched across India These include difficulty equipping and staff- 1. Plum-sized grapes. from 27 January to 8 February 2019, was ing government laboratories; a low level 2. Explaining how food-safety is reflected in correct developed by the International Trade Centre of knowledge about food safety among labelling. (ITC) and the Food Safety and Standards Afghan food producers and processors; and 3. Laboratories are helping improve food safety in Authority of India (FSSAI) based on input overlapping mandates among government Afghanistan.

FORUM ISSUE 1 | 2019 | 31 ITC IN ACTION

‘Creationesia’ wins International Trade Centre’s Student Video Pitch Contest for Gender Equality

Bandung Institute of Technology students sway jury and audience with idea to turn plastic waste into economic opportunities for women, taking top prize in the Women’s Day contest

reationesia’, a team of three stu- investors attending the International Trade dents from the Bandung Institute Centre’s flagship event in the fall. We never thought that we would win Cof Technology, Indonesia, was on The video-pitch contest was organized in this competition. We are speechless 7 March announced as the winner of the partnership with the Republic and Canton of and very grateful for winning. It’s International Trade Centre’s Women’s Geneva, the University of Geneva, Campus because of support from family, friends, and especially our business school, the Day video-pitch competition for ideas to Biotech, the Enhanced Integrated Framework, School of Business and Management empower women in business. Creationesia and the International Gender Champions. at the Bandung Institute of Technology. convinced the jury and audience with their Speaking on behalf of the winning team, Thank you so much! We’re hoping that business idea to turn plastic waste into eco- Avrantsa Alna Qamara, said: ‘We never with our idea we will be able to help a nomic opportunities for women, doing good thought that we would win this competi- lot of people in Indonesia. for people and the planet. tion. We are speechless and very grateful for For producing the winning video, ‘Crea- winning. It’s because of support from family, tionesia’ will win a trip to the 2019 World friends, and especially our business school, Thank you so much! We’re hoping that Export Development Forum and a chance the School of Business and Management with our idea we will be able to help a lot of to refine and re-pitch the business idea to at the Bandung Institute of Technology. people in Indonesia.’

32 | FORUM ISSUE 1 | 2019 © ITC / Laurena Arribat © ITC / Laurena Arribat © ITC / Laurena © ITC / Laurena Arribat © ITC / Laurena Arribat © ITC / Laurena

Their idea - the Wage Gap Meter - was a col- Jury members for the Women’s Day An incredible amount of thinking has our-coded label to include on items indicating video pitch competition were: Ambassador gone into the idea presented by these the pay gap between men and women. Mikael Anzén, Permanent Representative three students from the Bandung Rawia Chaouali of Tunis Business of Sweden to the World Trade Organiza- Institute of Technology. Creationesia’s School, Tunisia, was awarded third place for tion; Yemi Babington-Ashaye, President, idea to use waste to create job a pitch entitled the Women Entrepreneur- United People Global; Alexandra ‘Santu’ opportunities from women is not only ship Institute - L’Ellethom, focusing on train- Boethius, Co-Founder, Impact Hub Geneva an idea that will help women, but is also good for societies and the planet. ing and economic empowerment of women and Lausanne; Gabriele Lechner Cherubini, in rural Tunisia. Financial Consultant, Banque Pictet and The other shortlisted entries were Cie SA Wealth Management; ITC Execu- Congratulating the team on the win, Developing Female-led businesses through tive Director Arancha González; Anne ITC Executive Director Arancha González Communal Economy by Olubusola Mada Hornung-Soukup, Chair of the Board of said: ‘An incredible amount of thinking of Lagos Business School, Nigeria and Wom- Directors, TPG Public Transport of Geneva; has gone into the idea presented by these en’s Leadership Trips by Kaleigh Carlson and Annette Ssemuwemba, Deputy Executive three students from the Bandung Institute of Karun Gopinath, from the Geneva-based Director, Enhanced Integrated Framework, Technology. Creationesia’s idea to use waste Graduate Institute. World Trade Organization; Estefania Tapias, to create job opportunities from women is The second and third place winners Co-founder and CEO, WeSpace; and Laure not only an idea that will help women, but will receive training, capacity building and Ognois-Zaugg, Director of Research Ser- is also good for societies and the planet.’ expert advice from the International Trade vices, University of Geneva. Creationesia, which was developed by Centre’s Innovation Lab, the SME Trade Avrantsa Alna Aulanniswah, Al Fadhilah and Academy and the SheTrades team. Tiara Rahartono of the Bandung Institute of The contest was open to students from Technology, Indonesia, staved off competi- universities across the world. Pitches came tion from four other entries that had made it in from universities in Cameroon, China, to the contest jury’s top five selections. Hungary, India, Indonesia, Japan, Nigeria, 1. Winners, jury members and audience at the event. Runner-up in the pitch contest was a mul- Russian Federation, Senegal, South Africa, 2. Modern voting. ticultural team from Switzerland’s the Gradu- Switzerland, Tunisia, the United Kingdom 3. The audience counted for one jury vote. ate Institute-Cassandra Bragdon, Dhwani of Great Britain and Northern Ireland and 4. Members of the audience engaged in a livley debate. Nagpal, Boroka Godley, and Kaoru Inoue. the United States of America. 5. Jury members debate the shortlisted entries.

FORUM ISSUE 1 | 2019 | 33 ITC IN ACTION

Guinea: Boosting youth initiatives and entrepreneurship

MUJINGA TAMBWE, Communications Officer, International Trade Centre ITC programme seeks to create jobs and economic growth by encouraging, educating prospective business owners © Shutterstock.com

ith more than 75% of its people to enable economic opportunities for the under the age of 35 and a median country’s youth. In Guinea, entrepreneurship can be Wage of 19, Guinea boasts one of the Funded under the European Union part of the solution to many challenges world’s youngest populations. Giving youth Emergency Trust Fund for Africa for a dura- faced by the population – and youth in particular – namely migration, opportunities at home, building on resources tion of four years, INTEGRA seeks to tackle socio-economic insertion and and reducing irregular migration are among economic root causes of irregular migration, financial autonomy. the country’s most pressing priorities. supporting entrepreneurship and job crea- To address those concerns, the Gov- tion at the grass-roots level and providing ernment of the Republic of Guinea and opportunities for growth. services firm Enviro Africa. ‘At the time I used the European Union launched the ‘Support ‘My initial goal was to create jobs to work some 10 hours a day for my emplo- programme for the socio-economic inte- for others,’ said Mamady Kobele Keita, yer. I wondered what it would be like to use gration of the Guinean youth’ (INTEGRA) managing director of environmental- the same 10 hours working for myself.

34 | FORUM ISSUE 1 | 2019 Africa has a wealth of opportunities. It is now time that African youths explore those possibilities and that African society can benefit from the success of their sons and daughters. © Socra/Monarch Services © Socra/Monarch Services ‘When the entrepreneur knows that he is working for himself, he gives his all. We managed to create local jobs for youths who did not believe in themselves.’ In line with government priorities, the International Trade Centre (ITC) accepted the challenge to support those efforts by increasing the employability of 15,000 youths and creating some 3,000 jobs. To The first of its kind, Boffa’s incubator will ACCESS TO FINANCE that end, it developed a four-pillar approach be replicated in three other regions of the Access to credit and capital remains a major to promote youth entrepreneurship; skills country. constraint for MSMEs, not only at the start development; access to finance; and of their activities but also for their subse- improved competitiveness of micro, small YOUTH ENTREPRENEURSHIP quent growth. and medium-sized enterprises (MSMEs) in Like many African countries Guinea is fac- ‘Young entrepreneurs do not always the agricultural and information and com- ing a high rate of youth joblessness, a condi- have funds or know their way around to munications technologies (ICT) sectors. tion exacerbated by its youthful population. initiate their activities,’ said Swann Diallo, This has helped prospective business own- Given the reduced scope of the formal pri- managing director of hotelier MLYS. ers realize their ambitions while creating vate sector and limited job opportunities in ‘Besides, they do not always have a sense of opportunities for others. the public sector, entrepreneurship and self- economics or might not have planned to be ‘Beyond the desire to be my own boss, I employed work would be an appropriate involved in an entrepreneurial project. It is decided to become an entrepreneur to have response to youth unemployment. essential to work with experienced partners an increased impact on my community,’ said ‘The private sector is the key driver for who can help you achieve both your vision Fatou Camara, managing director of Mon- investment as it plays a central role in wealth and mission.’ arch Services. ‘As a matter of fact, there is and job creation,’ said Gabriel Curtis, the Guin- Thanks to the establishment of a pool a lack of expertise in the areas of ICTs and ean minister of public-private investments and of financial counsellors, ITC works towards marketing in Guinea. I therefore wanted to partnerships. ‘In Guinea, entrepreneurship facilitating access to funds for Guinean bring my contribution to improve quality in can be part of the solution to many challenges youth-owned businesses and projects. After those sectors.’ faced by the population – and youth in particu- completing a training programme in busi- The programme has advanced on sev- lar – namely migration, socio-economic inser- ness support, selected consultants will be eral fronts since its inception in November tion and financial autonomy.’ joining private-sector institutions to help the 2018, especially on the initiatives support- It is in this spirit that ITC and the beneficiaries become more competitive and ing youth entrepreneurship have made par- Guinean Employment Promotion Agency attractive for investments. In the next two ticular headway. (Aguipe) supported the organization of the years certified advisors are expected to work first edition of the Salon des entrepreneurs with at least 600 entrepreneurs. That kind ‘WORKING FOR YOURSELF’ de Guinée (SADEN), a citizen’s initiative of commitment can help budding businesses The city of Boffa, known for its mining emanating from the youth themselves. With realize even their grandest dreams. activities and tourism potential, will in June some 2,000 visitors from home and abroad, ‘We would like to build other installa- host a business incubator in the premises of the innovative forum addressed opportuni- tions in the West African region and more the city’s youth centre. The initiative is part ties and challenges of entrepreneurship in widely on the continent,’ Diallo said. ‘More of an agreement between ITC and Guinea’s the country, providing inspiration and focus. importantly, we would like to become a ref- Ministry of Youth and Youth Employment ‘Africa has a wealth of opportunities. erence on the African continent and thereby to build support for entrepreneurship and It is now time that African youths explore promoting Africa in the world.’ boost the creation of sustainable economic those possibilities and that African society opportunities for local youth. can benefit from the success of their sons The entrepreneurs featured in this article are not Named ‘Walyètèbè’, which means and daughters,’ Camara said. ‘I would like involved in the INTEGRA programme. ‘working for yourself’ in the Sousou lan- to keep on promoting entrepreneurship in guage, the programme will support young Guinea through initiatives such as the Salon 1. An aerial view of Conakry. entrepreneurs with training, coaching, des entrepreneurs de Guinée and specific 2. Fatou Camara. knowledge transfer and networking. training programmes.’ 3. Swann Diallo.

FORUM ISSUE 1 | 2019 | 35 Out on 27 June 2019! For your free online copy, see: www.intracen.org/publications

36 | FORUM ISSUE 1 | 2019 PUBLICATIONS

THE POWER OF INTERNATIONAL VALUE CHAINS IN THE GLOBAL SOUTH DIRECTORY Companies can build competitiveness and grow by engaging in South-South value chains and producing higher value-added goods, according to a survey of more than 550 East African companies. This report shows major trends that ITC PUBLICATIONS have propelled the South, including the recent proliferation of regional trade agreements and Resources on trade increasing trade in technology-intensive products. and export development www.intracen.org/publications/Global-South/ for exporters, trade support institutions and policymakers

New papers JOINING FORCES FOR E-COMMERCE: HOW For free download, please visit: SMALL AFRICAN FIRMS SUCCEED WITH COLLABORATIVE BUSINESS MODELS www.intracen.org/publications Micro, small and medium-sized enterprises (MSMEs) in Africa can tackle e-commerce barriers such as formalization, e-payments and delivery by joining forces through collaborative business models. This paper examines the pros and cons of three models – associations, consortiums and cooperatives – and its findings indicate that cooperatives are the most suitable to connect small African firms to cross-border e-commerce. TURNING EXPORT POTENTIAL INTO EMPLOYMENT: A CASE STUDY FOR JORDAN www.intracen.org/publication/joining-forcesecommerce Jordan could create more than 85,000 new jobs, about a quarter of them for women, by unlocking its regional trade potential, according to a new ITC study. The report, which identifies export sectors with employment potential by using an innovative methodology, can help guide policymakers in focusing export promotion on sectors that promise the most employment. PROMOTING SME COMPETITIVENESS

IN ZAMBIA www.intracen.org/publication/export- potentialemployment-Jordan Small and medium-sized enterprises (SMEs) in Zambia play a key role in boosting economic growth and job creation. Data from the SME Competitiveness Survey shows that SMEs in the agri-food sector have good capacity to deliver products on time; manufacturing firms are content with the skillset of their workers; and firms in NO SUCH THING AS A COMMODITY business support services maintain a competitive Small and medium-sized enterprises (SMEs) edge by offering high-quality services. The data are important actors in all economies and key assesses the international competitiveness of Zambian firms. to policies for inclusive growth, innovation, productivity and job creation. However, www.intracen.org/publication/SME-Competitiveness- they tend to be trapped in low value-added tasks Zambia/ and commodity dependence. This joint paper with the World Economic Forum sets out five ways these enterprises in developing and least developed countries can move to higher value- added activities and increase their earnings.

www.intracen.org/publication/No-such-thing-as- acommodity DOMINICAN REPUBLIC: COMPANY PERSPECTIVES – AN ITC SERIES ON NON-TARIFF MEASURES

Pre-export procedures are one of the main trade challenges of small businesses in the Dominican Republic, according to ITC interviews with more than 800 local businesses. The good news is that overcoming those hurdles is relatively easy. The report recommends reinforcing coordination and integration among institutions. Available in Spanish only.

www.intracen.org/publications/NTM-Dominican- Republic

FORUM ISSUE 1 | 2019 | 37 NEWS

NEWS Agenda from 28 May 2019

Upcoming events

3 June Women Deliver 2019 Global Conference, 9 September ITU Telecom World 2019, Budapest Vancouver, Canada 10 September UNWTO General Assembly, St. Petersburg, 3 June World Circular Economy Forum, Helsinki Russia

10 June Global Youth Entrepreneurship Summit 2019, 18-20 September Women’s Forum Asia 2019, Singapore Cartagena, Colombia 17-30 September 74th Session of the United Nations General 12-14 June 11th World Chambers Congress, Rio de Janeiro Assembly, New York

17-18 June Annual Bank Conference on Development 23 September Climate Action Summit, New York Economics 2019, Washington 24 September United Nations High-level Political Forum on 18-19 June European Development Days 2019, Brussels Sustainable Development, New York

26 June Women’s Forum for the Economy and Society, 28 September Broadband Commission Annual Meeting, Kyoto, Japan New York

27 June United Nations Micro, Small and Medium-sized 7 October Trade for Sustainable Development Forum, Enterprises Day Geneva

28-29 June G20 Summit 2019, Osaka, Japan 8-10 October WTO Public Forum 2019, Geneva

2 July Annual meeting of the International Trade 17-18 October Young Africa Works Summit, Cape Town, Centre’s Joint Advisory Group, Geneva South Africa

3-5 July WTO Aid for Trade Global Review, Geneva 18-20 October Annual meetings of World Bank Group and International Monetary Fund 9-17 July United Nations High-level Political Forum on Sustainable Development, New York 29-30 October Africa Women Innovation & Entrepreneurship Forum, Cape Town, South Africa 19-23 August Latin American and Caribbean Climate Week, Salvador, Brazil 5 November China International Import Expo, Shanghai, China 25-30 August World Water Week, Stockholm 18-22 November ITC’s World Export Development Forum, 25-27 August 45th G7 summit, Biarritz, France Addis Ababa, Ethiopia 28 August 7th Tokyo International Conference 20-22 November Women’s Forum Global Meeting, Paris on African Development, Yokohama, Japan 2-13 December Santiago Climate Change Conference 2-6 September Asia-Pacific Climate Week, Bangkok, Thailand (UNFCCC COP 25), Santiago de Chile 4-6 September World Economic Forum on Africa, Cape Town, South Africa

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