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Report Outline ITC: Sustainable Export Development in Romania (2006-08) Final report Final SECO Evaluation Marius Birsan Peter Lunenborg Matthias Meyer May 11, 2010 Table of contents Paragraph Page Abbreviations and acronyms 2 Our assessment in a nutshell 4 Summary report A. Background 5 B. Relevance 5 C. Efficiency 6 D. Effectiveness 13 E. Sustainability 15 F. Lessons for the future 16 Technical background report Chapter 1: Background 1 24 Chapter 2: Relevance 33 34 Chapter 3: Project design 40 36 Chapter 4: Governance and management 72 46 Chapter 5: Implementation efficiency 95 53 A. Introduction 95 53 B. National and regional export strategies (module 1) 100 54 Monitoring of NES Action Plan (output 1.1) 106 56 Revision of NES (output 1.2) 110 57 Two Regional Export Strategies (output 1.3) 119 59 C. Capacity building for export development (module 2) 153 66 Generic training (output 2.1) 157 67 Wood and furniture (output 2.2) 190 75 Garments (output 2.3) 212 80 Organic agriculture (output 2.4) 238 86 IT services (output 2.5) 258 91 D. Trade information system for exporters (module 3) 263 93 Chapter 6: Effectiveness 277 98 A. Outputs 278 98 B. Outcomes 282 99 C. Transversal themes 295 103 Chapter 7: Sustainability 299 108 Annexes Annex 1: Terms of reference 110 Annex 2: List of persons met (a) during field visit and (b) at SECO and ITC 114 Annex 3: Activities under module 2 117 Annex 4: Outcome of value chain analysis for the garments sector 118 Annex 5:Value for money in the garments sector 120 1 Abbreviations and acronyms ADR Regional Development Agency ADTCP Asociatia de Design pentru Textile, Confectii si Pilearie ANCA National Agency for Agricultural Advisory ANEIR National Association of Exporters and Importers of Romania ANIS National Software Industrial Association APMR Romanian Furniture Manufacturers Association ARIES Romanian Association of Electronics and Software companies ASFOR Forestry Employers Association in Romania BDS Business Development Service BDSs Business Development Service Providers BioTerra Organic Farmers Association of Romania CCI Chamber of Commerce and Industry CHF Swiss francs CIPE Centre for International Private Enterprise Directorate Export Promotion Directorate within Ministry of Trade EDS Export Development Service EDSs Export Development Service Providers EMDS Enterprise Management Development Services, ITC technical section EPA Export Potential Assessment EU European Union FDI Foreign Direct Investment FEPAIUS Romanian Employers Federation of Light Industry FiBl Forschungsinstitut für biologischen Landbau FNAE National Federation of Organic Farmers GDP Gross Domestic Product GTZ Deutsche Gesellschaft für Technische Zusammenarbeit, German Cooperation Agency HS Harmonized System IMF International Monetary Fund INL National Institute of Wood IPM International Project Manager IT Information Technology ITC International Trade Centre ITC International Trade Centre MADR Ministry of Agriculture and Rural Development MAR Market Analysis and Research, formerly Market Analysis Section (MAS). ITC technical department Ministry of Trade Ministry of SMEs, Trade and Business Environment MOU Memorandum of Understanding NASMEC National Agency for SMEs and Cooperation NEC National Export Council NES National Export Strategy 2 NPM National Project Manager OASEC ITC‟s Office for Arab States, Europe and the Commonwealth of Independent States PHARE Poland and Hungary: Assistance for Restructuring their Economies. EU financed pre-accession instrument, formerly available for Romania PMP Preparing Market Profiles PPP Power Purchasing Parity RES Regional Export Strategy RFTC Romanian Foreign Trade Centre, predecessor of RTPC ROCA Reţeaua Organizaţiilor de Consultanţă In Afaceri, network of consultancy firms established under a Phare project RTPC Romanian Trade Promotion Centre Sapard Special accession programme for agriculture and rural development SC Steering Committee SECO State Secretariat for Economic Affairs of Switzerland SME Small and Medium sized Enterprise SOC-IEP Sector Operational Programme „Increase of Economic Competitiveness‟ SQAM Standardisation, Quality Assurance, Accreditation and Metrology SRAC The Romanian Society for Quality Assurance SWOT Strength, Weaknesses, Opportunities and Strengths TCAS Trade Competitiveness Assessment TIN Trade Information Network TIP Trade Information Portal UNCTAD United Nations Conference on Trade and Development UNDP United Nations Development Programme UNIDO United Nations Industrial Development Organization USAID United States Agency for International Development USSR Union of Soviet Socialist Republics (Soviet Union) VCA Value Chain Analysis 3 Our assessment in a nutshell What was achieved? Export strategy : The first two regional export strategies in Romania were prepared, action plans are now monitored and national experts were given advice in how to revise the country‟s first national export strategy (which was published in 2005). Capacity-building: Close to 600 business intermediaries, consultants and enterprise staff participated in training, a few were also given advice to in company visits. Training focused on four dynamic export sectors: wooden furniture, garments, organic agriculture and information services. Generally participants appreciated the quality of the training. Some consultants use the acquired knowledge in their services to enterprises, some enterprise managers increased process efficiency in their firms, and in organic farming an export association was formed in the aftermath of training. Trade information: A national trade information portal has operated for a year and is highly appreciated by exporters. Is it sustainable? Export strategy: Yes, Romania is now in a position to prepare national and regional strategies and monitoring them without external technical support. Capacity-building: Originally, it was expected that only business trainers would be formed and would then be able to give advice to firms in the four sectors. This goal could not be achieved and the expected impact of the actual training on domestic training capacity and on export skills of enterprises is very small. Trade information: Yes, the portal has a good institutional basis and relies on a solid network. What was found wanting? Export strategy: Action plans have not been translated efficiently into action on the ground. Capacity-building: Project objectives were too ambitious given the financial means and the timeframe available. Project design was insufficient to direct ITC‟s interventions towards trainers and areas where trade competitiveness could be improved the most. Trade information: The operation of the portal relies almost exclusively on the staff and budget of the Directorate of Trade Promotion. A further deepening of information is necessary to facilitate its use by individual exporters. Which are the main lessons? Export strategy: ITC should pay attention in its support to an effective selection of actions and their translation into feasible reforms and projects. Capacity-building: An early intense dialogue with enterprise and intermediary counterparts is key to assessing needs and designing implementation plans with each main counterpart in the country. Often other tools than short training are relevant as for instance upgrading specialized academic training, research and development, industrial and IT parks, and clustering. New counterparts should be addressed like lead exporters in agriculture, certifying agencies, and managers of parks and clustering ventures. Time spans for projects should be adapted to achieving significant project outcomes. Trade information: For its development, the portal requires more dedicated professional staff, unavailable in the Directorate, and a stronger participation of chambers of commerce and other business organizations. Summary report The content of this report is based upon a more detailed Technical Background Report which follows. It is not self-contained. The brief and focused findings and recommendations made here have to be read in the context of the analysis and the views expressed in the broader report. Please refer to it whenever you have doubts reading this summary. A. Background This report evaluates the project "Sustainable Export Development in Romania (2006-2008)” which was implemented by the International Trade Centre (ITC) from July 2006 to March 2009. The Romanian Ministry of Trade, through its Directorate of Trade Promotion, was ITC‟s main counterpart. This capacity-building project was funded by the Swiss State Secretariat for Economic Affairs (SECO). The project a) gave support to monitoring and revising the National Export Strategy (NES) 2005 to 2009, and to drafting export strategies in two Romanian regions; b) trained Romanian enterprises and intermediaries to increase their export competitiveness in garments, wood processing and furniture, internet technology services and organic agriculture; and c) was instrumental in establishing a trade information system for exporters. B. Relevance For Romania to implement a National Export Strategy (NES) was highly relevant in the context of increased international competition and European Union accession and the corresponding need to diversify and increase the value added of exports. The NES is a potent tool to build a national consensus around the best options for higher export competitiveness. More specific export strategies on a regional level are essential as well because they allow for stimulating the formation of industrial clusters, exploiting
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