strategy

Improving systems of international trade

Synonyms:
Providing international trading system
Improving international trading system
Increasing efficiency of international trade procedures
Context:
Efficient collection, organization and management of data and information are crucial to the productive management of national economies and for the efficient conduct of trade.
Implementation:
UNCTAD has in recent years concentrated a significant proportion of its technical cooperation resources on helping developing countries improve their systems and procedures in international trade and finance. These programmes have encompassed a wide range of activities - systems development, developing and updating computer software packages, and installing computer systems in individual countries and in the offices of subregional and regional organizations, as well as training and advisory services.

The overall impression is that, with a few exceptions, these interventions have been avidly sought by developing countries, and that donor agencies have responded to these needs. These activities have been financed both by UNDP and by Trust Funds of bilateral donors in almost equal measure, which is one indication of the demand for these programmes, their relevance to needs and the mutual interest of both donors and recipients. Apart from increasing the general economic efficiency of recipient countries, these systemic and procedural reforms help improve the smooth functioning of the international trading and financial system as a whole, albeit modestly. This has happened primarily through the propagation of common and consistent standards in data collection systems, data presentation and data analysis and in enabling improved access to such data and information. It is abundantly clear that technical cooperation in this area also serves the interests of both developing and developed countries. Since it is predicated on major information and data capacities built up over time, and on the 'state of the art', which is constantly and rapidly evolving, it is essential that these capacities continue to be sustained, improved and kept up-to-date.

One of the earliest technical cooperation programmes in systemic and procedural improvement focused on maritime transport and more particularly shipping and ports management. Maritime cargo information systems, harmonized port tariff structures, simulation models of port revenues and an Advanced Cargo Information System are some of the activities that have benefited. Evaluations of these programmes concluded that the contribution of UNCTAD has been significant, especially to poorer developing countries, mainly in Africa. UNCTAD's technical capacities also led to its being entrusted with the rehabilitation and management of the Mogadishu and Kismayu ports in Somalia alongside the United Nations peace-keeping operation.

In the broad field of trading operations, the customs management (ASYCUDA) Programme has contributed significantly to the reform and improvement of customs management. Customs procedures and the methodology of data collection have undergone radical transformation in many countries (over 50 are implementing ASYCUDA Programmes) and these reforms have led to speedy transactions, benefiting the private sector in these countries immensely. Customs revenues have seen substantial and rapid rises, and opportunities for untoward practices reduced. Customs is normally considered a bureaucratic and regulatory agency, and ASYCUDA has helped to place this institution more squarely in the development context. Technical cooperation in trade facilitation has been equally productive, though it is too early to make any judgement on the contribution and impact of the Trade Efficiency programme and especially the establishment of Trade Points. What can be stated is that UNCTAD's conceptualization of trade efficiency issues, and the development of a methodology for its operationalization have been imaginative and have elicited positive responses both from developing and developed countries. An other valuable contribution can be seen in the field of Trade Control Measures, where UNCTAD established a large inventory of non-tariff barriers, which is now being transferred to developing countries through the trade analysis and information system (TRAINS). However, the experience with another computer software programme - SMART - has not been equally satisfactory as access to, and updating of, data were not assured, though it was useful for Uruguay Round processes.

An other well-regarded programme is the debt management and financial analysis systems (DMFAS), which has emerged as a key instrument in the management of the external debt of many countries and illustrates the impact that technical cooperation can make when it is aimed at critical, high priority issues. There are several examples of efficient debt management systems and negotiations resulting from DMFAS, which have led to important gains for the countries concerned. The debt negotiating process has gained in efficiency as a consequence of improved information.

Overall, UNCTAD's contribution in improving systems and procedures has been commendable. It demonstrates what is feasible in related areas of economic management, and should stimulate developing countries to develop their own computerized systems and procedures. The private sector, and other organizations, are also engaged in identical activities, but UNCTAD's contribution has been generally superior in terms of quality, coverage and costs. It enjoys the major advantage of being able to generate significant economies of scale due to its engagement in a large number of countries, and through standardization. It may well be timely to explore the feasibility of recovering some of the costs of these services from clients, and with this in view, new institutional arrangements might be considered, such as hiving off data management activities to an autonomous non-profit making institution.

While there is undoubtedly a great opportunity to develop computer software systems, and other procedural and systemic improvements in the broad field of trade, it needs to be borne in mind that these systems and procedures can be effective only in a dynamic trading context, where developing countries generate exportable surpluses. There was a period a decade or two ago when technical cooperation activities attached high priority to the development of export promotion boards and agencies. There is now some disillusionment on this score. It is important not to be carried away by immediate euphoria regarding the excellence of these systems and procedures. Unless they contribute to trade expansion or greater efficiency, there is no particular attraction in them. It is also necessary to seek every opportunity to enable developing countries to develop their own computer software, as even least developed countries have significant computer expertise in their owe countries and such expertise can be used cost-effectively, enabling indigenous institutional development at the same time.

Subjects:
Trade
Cybernetics
Systems
Reform
Type Classification:
D: Detailed strategies