Competitiveness of, and Challenges for, ACP Countries in the Current International Trading Environment
This document was prepared by ITC (International Trade Centre UNCTAD/WTO) on the initiative of the ACP Secretariat (African, Caribbean and Pacific).
II. Competitiveness of ACP countries
A. African ACP countries
B. Caribbean ACP countries
C. Pacific ACP countries
D. Market diversification of ACP exports
A. The principal bottlenecks
B. Ranking of bottlenecks
IV. Challenges for enhancing the participation of ACP countries in international trade
A. Trade support services
B. Trade information
C. National policy framework and trade development strategies
D. Human resource development
E. Product and market development
F. Physical infrastructure
A. Data on world imports from ACP countries
B. Survey of firms in ACP countries
Since the mid 1990s, exporters from ACP countries have proven their international competitiveness to the world. These countries have been able to increase their world market share for the majority of their leading export products. The decline of their market share in European imports has come to a halt, and they are diversifying their exports to new markets.
This positive performance is all the more remarkable, as the business community in most ACP countries faces an uphill struggle in their international business development efforts. The survey on which this paper is based underlines the complex and stifling barriers with which exporters in ACP countries have to cope.
The analysis of the recent export performance of ACP countries and the answers to a survey recently conducted by the International Trade Centre UNCTAD/WTO on bottlenecks to international business development call for priority action in five areas, if ACP countries are to consolidate their recent trade performance and further enhance and broaden their participation in international trade:
This document has been prepared as a background paper for the Summit of ACP Heads of State and Governments. It takes a two-pronged approach. First, it examines the international competitiveness of ACP countries and identifies opportunities on the basis of growth trends of ACP exports and the evolution of international demand. These indicators have been derived from data on world imports from the ACP countries.
Second, this macro-economic approach is complemented, at the micro-level, with the views of enterprises in selected ACP countries on what they perceive as the most important obstacles to more rapid international business development in ACP countries and what they consider as priorities for trade-related technical cooperation programmes.
This second approach is based on the responses of 233 firms and 38 business associations from 29 ACP countries to a survey questionnaire carried out by the International Trade Centre UNCTAD/WTO in mid 1997. The vast majority of enterprises and business associations invited to respond to the questionnaires were either known to ITC or recommended by the International Organization of Employers, the International Chamber of Commerce or the World Economic Forum.
Answers obtained from the questionnaire survey are reproduced largely in their original form to maintain their authenticity. They reflect the views of the respondents.
The findings of the analysis of the exports of ACP countries and the survey are presented in two parts. Part One takes a combined look at ACP countries and presents the results in the form of a narrative.
Part Two profiles the export performance for each ACP country. The tables and charts provide indicators on the competitiveness and growth trends of all ACP countries for all of their major export products. This type of indicator may be of interest for sectoral priority setting in trade development.
Details on the methodology are given in chapter V.
II. Competitiveness of ACP countries
The economic performance of ACP countries has improved significantly in the mid-1990s. This applies not only to GDP growth, but also to the development of their exports. Over the period from 1992 to 1996, the value of their exports in current US$ has expanded at an annual growth trend of 7 per cent.
This acceleration of exports represents an important turn-around in the supply response of ACP countries when compared to the early 1990s. At the same time, export growth rates remained below the world average. World imports grew at nearly 11 per cent p.a. over this period of time.
What have been the reasons for this below- average performance? Is the declining share of ACP countries in world trade the result of an erosion in competitiveness in its major export products? What are the implications for the future, and which products and markets offer new opportunities?
In order to shed light on these questions, ITC classified exports of ACP countries according to their competitiveness into four categories distinguished by whether they have been losing or gaining international market share and whether international demand for these products has increased at above- or below-average growth rates. These four categories are referred to as:
Champions - winners in growth markets (upper right, first quadrant): These are the export products for which the ACP country under review has performed very well. They comprise particularly dynamic products which are growing faster than world trade in general, and for which the exporting country under review has been able to outperform its competitors and has increased its share in world imports. ACP exporters of these products have proven their international competitiveness over the mid-1990s. Trade promotion efforts for these products are less risky, as there are national success stories which can serve as reference points. Promotional efforts should aim at broadening the supply capacity.
Underachievers - losers in growth markets (upper left, second quadrant): These products represent particular challenges for trade promotion efforts in the exporting country under review. While international demand has been growing at above-average rates, the ACP country under review has been falling behind. Its exports have either declined or grown less dynamically than world trade. As a result, the country under review has been losing international market share. In general, the bottleneck is not international demand, but supply side factors. For these products, it is essential to identify and remove the specific bottlenecks which impede a more dynamic expansion of exports.
Losers in declining markets - sunset industries (lower left, third quadrant): The export prospects for these products tend to be bleak. World imports of the product concerned have increased at below-average rates or actually declined, and the market share of the ACP under review has gone down. Trade promotion efforts for product groups in this category face an up-hill task. They need to adopt an integrated approach to take into account bottlenecks both on the supply and on the demand side.
Achievers in adversity - winners in declining markets (lower right, fourth quadrant): Products in this quadrant are characterized by growing shares of ACP exporters in world import markets which are declining or growing below average. From a trade promotion perspective, niche marketing strategies are required to isolate the positive trade performance from the overall decline in these markets.
It should be noted that the criterion for distinguishing growing and declining products is the average nominal growth rate of total world imports from 1992 to 1996, which was at 10.7 per cent yearly. Products for which world imports have grown below this rate - e.g. at 5 per cent yearly - are classified as declining products, as their share in world trade is declining.
The charts also provide an overview of the concentration of exports: the appearance of one or a few comparatively large circles shows that exports are highly concentrated.
A. African ACP countries
This classification of products according to their international competitiveness brings out a surprising feature: African ACP countries have increased their world market share for the majority of their export products over the period from 1992 to 1996. Most of their exports have grown faster than world imports. This may be gathered from chart 1, where most of the product bubbles were on the right side of the diagonal. However, exports were concentrated in non-dynamic products with below average growth rates, referred to in the chart as "achievers in adversity" (fourth quadrant). This applies to precious stones, a variety of wood products, fish preparations and fruits and nuts. For all these products, African ACP countries have outperformed their competitors from other countries, but since growth of world demand has been lacklustre, the share of their total exports in world trade has continued to decline.
The implications are twofold. First, exporters from African ACP countries need to consolidate their successful export performance for those products, for which they have proven to be able to resist in weakening markets. ITC’s industry-specific experience suggests that there remains significant room for improvement at the operational level. Second, a diversification into more dynamic products is essential in the medium- and long-term, if African ACP countries want to participate to a larger extent in the dynamics of world trade. Chart 1 shows that exporters from African ACP countries were involved in a number of products characterized by vigorous growth in the mid 1990s.
Of course, the performance of African ACP countries is strongly influenced by oil exports. Crude oil accounted for nearly half of total exports of African ACP countries, and the dollar value of oil exports increased by an annual average of only 1 per cent per annum. If one excludes oil from the exports of African ACP countries, the growth rate over the period from 1992 to 1996 moves up to 10 per cent, i.e. very much in line with the growth of world imports.
There are four champion product groups in which exporters from African ACP countries have proven to be very successful over the period under review, namely natural rubber, coffee, cocoa and leather. In each of these four product groups, they have been able to increase their world market share.
In the mineral sector, however, African exporters were losing market share over the first half of the 1990s. This applies to copper, aluminium and other bases metals, which otherwise recorded high nominal growth rates over the period under review. Similarly, African producers were falling behind for crude oil; iron, aluminium and base metal ores. This trend underlines the importance of the recent growth of foreign direct investment inflows into mining in African ACP countries.
The review of the export performance of individual countries bears witness to the diversity of trade performance among African ACP countries. In line with its economic reform programme, Uganda managed to achieve impressive growth rates for its coffee sector. Nigeria’s export performance was limited by its dependence on crude oil exports, for which international demand expanded only at very modest rates. Mauritius’ textile sector has come under increasing competitive pressures. These different experiences underline the importance of designing country-specific trade development strategies reflecting trends both on the supply and demand side.
B. Caribbean ACP countries Taken together, the Caribbean ACP countries have proven their international competitiveness in a number of different product areas. Their combined exports are, in fact, quite diversified when compared to those from the other ACP countries. The largest export item, namely aluminum ore, accounted for only 11 per cent of total exports in 1996. The corresponding ratios are significantly higher for African and Pacific ACP countries. At the same time, there is a high degree of intra-regional specialization, and exports from most individual countries, and in particular the smaller ones, remain concentrated on a few items.
The overall export growth remained with 7 per cent p.a. below the growth of world trade, which implies that the share of the Caribbean ACP countries in world exports has been declining.
Yet, Caribbean exporters outperformed their competitors for many of their leading export items: world imports from Caribbean ACP countries increased with above-average rates for men’s clothing, apparel articles, accessories and aluminium ores. For all of these leading products, however, world demand grew at below-average rates. Similar to the situation for African ACP countries, the largest share of export products were found in the fourth quadrant, characterized by growing world market shares in declining markets.
Both for primary products and manufactures, more than 40 per cent of total export value was found among these "achievers in adversity". Grenada’s exports of spices and fish, Haiti’s exports of women’s clothing and Jamaica’s exports of apparel articles are cases in point.
For many of the small Caribbean producers, this niche strategy is a viable approach. The share of Caribbean countries in world imports remains very low for practically all export items. Producers of a number of different textile articles have been able to expand their exports at double-digit growth rates over the period from 1992 to 1996, focusing primarily on the North American market. More generally, only in six out of the top 40 export product groups were EU members the leading export destination for Caribbean ACP countries.
From a trade promotion perspective, products in the third quadrant (losers in declining markets) are particularly difficult. For a variety of products such as crude oil and other petroleum products, fruits and nuts, jewellery, alcoholic drinks and ships and boats, Caribbean firms have been losing world market share in stagnating or declining markets.
The trade performance over the early and mid 1990s shows, as well, that the Caribbean ACP countries have been able to seize existing opportunities in a number of the most dynamic growth markets. Companies from the subregion, for instance, had export "champions" in 65 different industrial product groups accounting for US$ 1.3 billion or 22 per cent of their total industrial exports. Examples are manufactured tobacco, where exports increased at 38 per cent p.a.; coffee, pig iron, inorganic chemicals and fertilizer.
Trinidad and Tobago, for instance, had a cluster of champion products with national export growth rates between 10 and 20 per cent p.a. for which international demand has been growing at above-average rates and Trinidad and Tobago has been able to increase its share in the world market.
C. Pacific ACP countries
Among the three ACP regions, the Pacific countries are the smallest exporters with a combined export value of less than US$ 4 billion in 1996, compared to US$ 10 billion for the Caribbean and US$ 44 billion for African ACP countries (see tables 1, 2 and 3).
The international competitiveness of the subregion hinges on the performance of the primary sector, and in particular mining (crude oil, copper and gold) and agricultural and forestry products such as wood, sugar, vegetable oils, and coffee.
Exports of the two leading export items, crude oil and rough wood, which accounted for 41 per cent of combined exports, have been expanding rapidly at rates significantly above the growth of the world demand for these products. Similarly, exports of fish and a number of apparel articles have evolved dynamically, and the Pacific ACP countries have been able to increase their world market share for these products. Yet, none of these products were among the fast growing items in world trade.
Fiji has been an example of successfully diversifying in a variety of products, for which world demand has been lacklustre. Notwithstanding limited overall growth prospects in these markets, exporters from Fiji have pursued niche strategies which have enabled them to realize annual export growth rates of between 10 and 50 per cent p.a. over the period from 1992 to 1996.
While there were hardly any sunset industries, some 30 per cent of the exports of Pacific APC countries fall into the category of underachievers in growth markets. In products such as copper ores, cocoa, oil seeds and vegetable oils, for all of which international demand has been growing at above-average rates, the Pacific countries have been falling behind. From a trade promotion point of view, these products represent particular challenges, as the bottlenecks are likely to be on the supply rather than on the demand side, and export expansion tends to be easier in dynamic markets.
The Pacific ACP countries are well integrated into the Asia-Pacific economic area. For only six out of the 40 top export items - including sugar, vegetable oils, coffee, fish and natural rubber - were European countries the most important buyers.
D. Market diversification of ACP exports
Europe remains the most important destination for exports from the ACP countries. In 1996, an estimated 46 per cent of all ACP exports went to the 15 EU members (see table 4). It is, however, very instructive to follow recent trends in market diversification of the ACP countries.
ACP exports to the EU have grown at an average rate of 6 per cent p.a. from 1992 to 1996. This was equivalent to the overall growth of EU imports over the same period of time. It follows, that the erosion of the market share of ACP countries, which has taken place since 1975, has come to a halt in the mid 1990s. Over the period of time under review, the ACP countries maintained their market share of approximately 1 per cent in total imports of the EU (see annex 2).
Exports to non-EU countries expanded at a faster pace: from 1992 to 1996 they grew by 8 per cent p.a. At the same time, ACP countries experienced a decline in their overall import market share in non-EU countries, as the latter’s total imports expanded at a rate of 14 per cent over the five years under review.
One interpretation would be that the traditional and preferential ties of ACP countries to the EU have helped ACP countries vis-à-vis its competitors to maintain its relative position in the EU. In absolute terms, however, other markets, which now absorb more than half of total exports of ACP countries, have proven to be more dynamic outlets, even though ACP exporters have not been able to maintain their import share in these markets.
For a number of leading export products, ACP exporters are trying to diversify in view of their present pronounced dependence on the EU market. This trend is shown in chart 4: for all product groups above the diagonal line, non-EU destinations are becoming more important in the mid-1990s. Examples include precious stones, coffee and natural rubber, for each of which the EU absorbs more than two thirds of total ACP exports.
On the other hand, ACP countries have effectively increased their market presence for several products which so far went primarily to other destinations. Footwear is a case in point. EU imports from the ACP countries increased by an annual rate of over 50 per cent as the EU share in ACP exports was only 13 per cent. Gold and women’s clothing were similar.
The large differences in import growth trends between the EU and other markets underline the importance of identifying target markets on the basis of economic fundamentals such as market size, dynamics and structure of demand. Trade policy factors, such as tariff preferences, can play an important additional role if they being used in a strategic manner, but they can not override fundamental market trends. This is borne out by the diversification efforts of exporters from ACP countries.
III. Bottlenecks to international business development - The perception of the business sector in selected ACP countries
More successful participation of the ACP countries in world trade hinges upon systematic elimination of existing bottlenecks to international business development. In order to identify these obstacles from the perspective of the enterprises concerned, ITC undertook a questionnaire survey on what the business sector in selected ACP countries considers as the most serious handicaps in their international business development efforts.
The results of this survey (which were also used in preparation for the High-Level Meeting on Integrated Initiatives for Least Developed Countries’ Trade Development) suggest that enterprises in many ACP countries need to cope with a particularly stifling complex of deeply entrenched and interrelated barriers to international business development.
A. The principal bottlenecks
The companies surveyed in selected ACP countries consider all four principal bottlenecks listed in the questionnaire as crucial, i.e. inadequate trade support services, difficult access to international markets, the internal weaknesses of local enterprises and non-supportive government policies. These four bottlenecks listed in the questionnaires are those most often encountered in ITC field work as well as those most regularly mentioned in the series of close to 100 seminars and workshops on the follow-up to the Uruguay Round Agreements undertaken by ITC and WTO in over 50 developing countries and economies in transition since early 1996. Each of these bottleneck factors was rated close to 4 on a scale of 1 (not important) to 5 (most important). The views of business associations and enterprises were quite similar in this respect.
Source: Survey carried out by the International Trade Centre UNCTAD/WTO, 1997.
Note *: Only 38 per cent of the enterprises and 26 per cent of the business associations indicated factors other than the four bottlenecks listed above.
The survey brings out forcefully the deep concern about the lack of efficient trade support services. This factor was rated as the most important by both enterprises and associations. The quotations in box 1 show consistently how the business community considers trade services as the weak link in their international business development efforts.
Access to international markets in the broad sense was seen as the second most important issue. Among the four principal factors, this was the only one referring to demand signals rather than to the supply side. Against the background of many recent studies which emphasize supply constraints as the leading bottleneck factors, it is interesting to see that firms in ACP countries put market access in the broad sense on a par with problems on the supply side. This rating reflects demand signals from international markets as they are being received in ACP countries. It thus includes both an objective element and a subjective one, the latter based on the perception of information reaching enterprises in ACP countries.
The internal weaknesses of local enterprises were rated as another important bottleneck. The enterprises considered their own weaknesses as the least significant among the four factors suggested.
On average, non-supportive government policies were considered as equally serious as company weaknesses. However, enterprises were more critical of government policies than were business associations. For the latter, government policies were the least important obstacle, perhaps reflecting the less operational role of associations in business development.
The variances in the ratings given by enterprises and business associations to company weaknesses and to government policies suggest perhaps a tendency to see external problems more clearly than internal ones.
A comparison of ratings given by firms of varying sizes in terms of number of employees brings out two interesting points. Small firms (SMEs) were significantly more critical of government policies than large ones: firms with less than 20 employees ranked non-supportive policies half a point higher than the larger companies. This underlines the difficulties of designing and implementing support policies for SMEs as well as the more limited capacities of SMEs to cope with complex policies. Similarly, SMEs perceived the problems of access to international markets as being more critical to their international business development efforts than did the large firms with 200 employees or more. At the same time, SMEs were less concerned with or less conscious of their own weaknesses.
B. Ranking of bottlenecks
The answers to the open question A (What, in your view, are the most important bottlenecks to more rapid international business development - exports and imports - in your country?) support and further differentiate the above ratings of the four principal bottlenecks.
Trade finance comes out as the single most important concern: close to a fourth of all enterprises evaluated trade finance as the most serious obstacle to trade development. For business associations, it was even close to one third.
The issue of trade finance encompasses a number of different but interrelated elements, and in particular inefficient banking, high cost of finance, non-availability of export credit guarantee schemes, high costs of letters of credit, and non-availability of funds.
Government policies and bureaucracy were ranked the second and third most important factors by the business sector. As can be gathered from box 1, firms feel particularly affected by inconsistent implementation, a non-existing or unsatisfactory dialogue between government and business institutions, red tape and graft. Customs offices were singled out by numerous respondents.
Access to international markets was another important preoccupation of enterprises and business associations alike. This reflected, among others, remaining import duties and quotas in the target markets of ACP exporters.
Many enterprises consider fiscal, exchange rate and tariff policies as major obstacles to their trade development efforts. In numerous countries, the business sector feels that taxes and other levies are too high and that government services in the areas of infrastructure, education, etc., are insufficient.
Overall, the breadth of concerns is striking. Entrepreneurs in ACP countries must not only attend to their core business, but also cope with a host of other issues which threaten to undermine their firms’ very existence. These range from security problems, unpredictability of the legal framework and its enforcement, and the lack of trade support services (see also box 1).
One of the few issues not mentioned as an impediment to export expansion is the lack or weakness of international demand. With some well-known exceptions, exporters from ACP countries are hardly ever sufficiently large players in their export markets to be restrained by the limited size of their target markets. This comes out as well from annex 2.
Box 1: Quotations on bottlenecks to international business development in selected ACP countries
IV. Challenges for enhancing the participation of ACP countries in international trade
In the survey, companies were asked to indicate what they perceive as priorities for trade-related technical cooperation. Most of the points raised relate to issues which go beyond the scope of technical cooperation activities and represent true challenges to be taken up jointly by the government and business sector of the country concerned.
A. Trade support services
The strengthening of trade support services is seen as the leading priority. In line with the preoccupation with inefficient financial services, 82 per cent of all enterprises and 76 per cent of the business associations look upon the strengthening of trade finance as a priority for trade-related technical cooperation programmes in ACP countries. Numerous concrete proposals are made, such as programmes catering to the special needs of SMEs, introduction of export credit and guarantee schemes, and opening the financial sector to more competition as a means of overcoming the inefficiencies and rigidities of financial institutions in ACP countries.
The strengthening of trade promotion institutions in the broad sense follows closely as a priority. Trade promotion institutions in this context do not consist only, and not necessarily primarily, of public-sector bodies. They also encompass chambers of commerce, exporters’ associations, employers’ federations and industry associations. The high rating given to the strengthening of trade promotion institutions bears witness to the awareness among ACP enterprises of the potential importance of private and public trade promotion institutions. It reflects a basic readiness to use the services of these institutions.
B. Trade information
The provision of up-to-date information on market trends in international markets ranks as the third most important priority in the combined ranking of both associations and firms. It is the highest priority for associations taken on their own. The responses obtained refer to various categories of business information (e.g. information on trade barriers such as tariffs and quotas, on prices, suppliers, international norms and trade fairs). More than a quarter of the firms believe, for instance, that up-to-date information on market access in the post Uruguay Round context should be a priority, as may be gathered from table 6. Respondents suggest technical cooperation for strengthening of information centres, and for product and market research and consulting.
C. National policy framework and trade development strategies
Business representatives in several ACP countries expressed their interest in technical cooperation programmes which would help to streamline the trade-related policy framework. Customs administrations were mentioned most frequently in this context. Over 40 per cent of the respondents felt that technical cooperation should be made available to streamline customs procedures. Similarly, many companies emphasized the need to review tax and tariff structures as well as foreign exchange controls.
Several enterprises suggested a closer coordination of trade and investment promotion efforts. The encouragement of these flows was seen as another area to which technical assistance could contribute and which required innovative thinking.
A large number of firms and business associations call for assistance in developing a national strategy for trade development. In fact, 61 per cent of all enterprises feel that the preparation of a national trade strategy should be a priority for trade-related technical cooperation. The importance attached to this point is closely related to what many enterprises perceive as the "lack of a clear-cut policy framework" for outward-looking development, the "lack of commitment to export development and the lack of goals and priorities" and a "lack of a medium- and long-term vision among government and business circles". In this context, many firms call for a closer dialogue between the government and the private sector.
D. Human resource development
Human resource development (HRD) is another major concern: more than half of all enterprises and two thirds of all associations believe that technical cooperation should focus on strengthening HRD facilities. The proposals cover different target groups, including not only the business sector (entrepreneurs, skilled and unskilled labour) but also civil servants concerned with trade issues (for example, customs personnel and staff of trade promotion institutions). In terms of subject areas, management and international marketing figure highest on the agenda. Close to half of the enterprises, for instance, referred to the importance of international marketing management.
E. Product and market development
Numerous respondents called for additional efforts in product and market development. Over 40 per cent of the participating enterprises, for instance, believe that assistance in quality control should be a priority for trade-related technical cooperation. There was considerable interest in technical cooperation programmes focusing on packaging issues. Furthermore, a number of companies called for support in the acquisition of relevant technology.
Respondents view assistance in selecting trade and investment partners abroad as another priority for trade-related technical cooperation. More than half of the enterprises raised this point. Answers referred to two different modes of delivery, namely the provision of information on potential partners and sector-specific and/or partner-country-specific technical cooperation programmes at the enterprise level to identify suitable partners.
F. Physical infrastructure
Many business representatives suggested that technical cooperation should contribute to improving the physical infrastructure in ACP countries. In this context, the upgrading of telecommunications, roads, electricity and water was mentioned very frequently.
A. Data on world imports from ACP countries
1. Sources
The export profiles for all 70 ACP countries have been prepared on the basis of TradeMap, ITC’s database and programme library for applied trade flow analysis. All indicators are based on mirror statistics. As only very few ACP countries reported their export data to the United Nations trade database COMTRADE, the world’s most comprehensive source of trade data, the export profiles of ACP countries have been derived from import data reported by 64 major trading nations for 1996. For the calculation of growth trends, an additional nine countries which reported for four of the five years from 1992 to 1996 were taken into account. These 73 countries, which are listed in annex 3, account for approximately 90 % of world trade.
However, mirror statistics have shortcomings which need to be taken into account. First and contrary to international convention, ACP export values are expressed in CIF terms, i.e. including cost, insurance and freight. As a general average, CIF values tend to be about 10 per cent higher than the FOB values normally used for exports. For most ACP countries, particularly the landlocked and island countries, the difference is likely to be significantly higher. Second, mirror statistics capture only the ACP exports that go to the 73 reporting countries. As a result, a large share of the ACP countries’ trade with neighbouring countries is excluded.
In order to provide an idea of the discrepancies between the mirror statistics and national, aggregated export data, the second line of the table on world imports in the country profiles gives the value of total exports according to the IMF Direction of Trade Statistics.
More generally, trade statistics have a number of well-known weak points. For instance, they exclude non-declared and informal trade, which accounts for a large share of trade in numerous ACP countries.
Notwithstanding these shortcomings, ITC has found mirror statistics to be useful indicators on orders of magnitude and trends on the trade performance of ACP countries.
2. Presentation formats
a. Tables
The tables on world imports (the second page of every profile) present major indicators on the export performance of each ACP. The indicators included in the tables are defined as follows:
All goods (mirror data): The top line gives value, growth and stability information for the country’s total exports according to the import data of the major trading nations. The growth trends are the source for the positions of the reference lines on national export growth in the graph on the third page of each profile.
All goods (IMF): The second line indicates the value of national exports according to national sources as reported by the IMF Direction of Trade Statistics or, in the case of Kiribati, the Asian Development Bank (ADB). The comparison of this figure with total exports as derived from partner country data provides an indicator of how well the mirror statistics cover the exports of the country under review. In a few countries, the mirror statistics are actually larger than the national data (i.e. in Angola, Burundi, Comoros, Equatorial Guinea, Gambia, Haiti, Madagascar, Samoa, Solomon Islands and Vanuatu). This may reflect the CIF-FOB difference in valuation and the non-reporting of exports in the ACP countries under review.
Rank value: Rank of the 40 leading merchandise export groups of the country under review at the three-digit level of the Standard International Trade Classification, Revision 3 (SITC) in 1996.
SITC Rev.3: SITC code. Data are listed in ascending order of SITC codes.
Product: Abbreviated product description. It should be noted that the product descriptions refer to larger product groups defined at the SITC three-digit level, and that some of the products may refer to re-exports (e.g. aircraft exports).
Value 1996: Value of exports of the product in US$ million in 1996 calculated as the sum of imports from that country by all 64 reporting countries providing data for 1996.
Trend 92-96: Annual percentage growth (calculated as least-square trends) over the last five years of value. The table indicates n.p. - i.e. new product - in the case of annual growth rates exceeding 100% p.a., as the initial export values for most of these products were negligible in 1992 or 1993.
Trend stability: Stability of the trend 92-96. Products are classified as having a High, Medium or Low level of stability of growth around the trend. The classification is based on the percentage of variation in export value indicated by the trend. High stability is defined as 0.70 to 1.00, medium as 0.35 to 0.70, and low as 0.00 to 0.35. This measure will be greater when the value has been less volatile.
World trend: Annual percentage growth of world imports of the product under review, 1992-1996, calculated as least-square trends.
Market share: Percentage share of exporting country in imports of all reporting countries of the product under review, 1996.
Unit value: Relative average unit value in 1996, i.e. average unit value of the country’s exports of the product under review, divided by the average unit value of imports from all reporting countries of the product under review. Relative unit values, which differ from the average by a factor of 10, i.e. which are larger than 10 or smaller than 0.1, have been replaced in the tables by n.a. for not available. Such extreme values imply that products within the same product group are too heterogeneous to permit an analysis of relative unit values.
SI: The Specialization Index shows whether a product is more, or less, important in the export basket of the country under review than it is to the average for the world. A value above 1 indicates that the country under review specializes in exporting the product under review in comparison with all countries. A value below 1 shows that it is not. All data refer to 1996.
No: Number of import markets which have imported the product concerned from the ACP under review in 1996.
Leading markets: Lists the three largest import markets for the exports of the country and product under review in 1996. Country codes are given in annex 3.
b. Charts
The charts present for each ACP the performance of its 30 leading export product groups. The charts show the export value of the product group under review (size of the bubbles), and they compare national export growth (horizontal axis) with the growth of international demand (vertical axis).
In addition, the charts indicate the average nominal growth of total exports 1992 to 1996 of the ACP under review (dotted vertical reference line) and the average nominal growth of world imports over the same period, which was 10.7 per cent p.a. (dotted horizontal reference line). Moreover, the diagonal line (i.e. the line of constant world market share) divides the chart into two parts: exports of product groups to the right of this line of the country under review have grown faster than world imports and thereby increased their share in the world market. Conversely, product groups to the left of the diagonal line have seen an erosion of their world market share.
B. Survey of firms in ACP countries
In preparation for both the Summit of ACP Heads of State and Government as well as the High-Level Meeting on Integrated Initiatives for Least-Developed Countries’ Trade Development, ITC carried out a survey on the views of the business sector in selected ACP countries, most of which were also LDCs. The short questionnaire used (reproduced in annex 1) focused on the bottlenecks to international business development and on priorities for trade-related technical cooperation. The questionnaire was sent to 1,439 firms in 41 ACP countries. In addition, 105 business associations'in particular employers’ associations, chambers of commerce and exporters’ associations'were contacted and asked to reply to the same questions. The enterprises were either known to ITC or were recommended by the International Organization of Employers, the International Chamber of Commerce and the World Economic Forum. Table 7 provides an overview of the number of questionnaires sent and answers received by country.
The overall rates of response were 16 per cent for firms and 36 per cent for business associations. These rates have to be considered satisfactory in view of the special circumstances of the survey.
In total, ITC received answers from 233 enterprises and 38 business associations in 29 ACP countries. Business associations in 19 out of the 41 ACP countries replied. Many of them are statutory bodies mandated to represent the views of the national business community at large. Their member companies have several hundreds of thousands of employees. This represents a non-negligible share in the total employment in the modern sector of the countries under review. The firms for which employment data were available have a combined employment of approximately 150 000. They are fairly equally distributed across the modern sector of the countries under review, with 31 per cent of the firms in the primary sector, 37 per cent in manufacturing and 32 per cent from the services sector (see table 8).
How representative are these answers? For low-income ACP countries taken together, the survey is thought to be quite representative of the modern sector. It should, however, be recalled that ACP countries are a heterogeneous group of countries, and that it is difficult to come up with generalized answers applying to all of them.
The presentation of the survey results follows a few general principles. Whenever possible, answers to the open questions have been quoted. In general, they have been transcribed without any editing and have been reproduced in italics. At times, it was necessary for reasons of space to summarize recommendations; in these cases, they are reproduced in normal characters. A selection of quotations has been included in the text boxes 1 and 2.
Table 8: Distribution of responding enterprises in selected ACP countries, by sector (in per cent)
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