WORLD TRADE
ORGANIZATIONWT/COMTD/IF/25
15 April 1998
(98-1485)
Committee on Trade and Development
Integrated Framework for Trade-Related
Technical AssistanceOriginal:  French
TRADE-RELATED TECHNICAL ASSISTANCE NEEDS - ASSESSMENT
BY CAPE VERDE
INTEGRATED RESPONSES BY THE WORLD BANK,
ITC, UNCTAD, IMF, WTO AND UNDP1
CAPE VERDE
                                                     
1 Published pursuant to the provisions of paragraph 5(e) of the Integrated Framework for Trade-Related
Technical Assistance (WT/LDC/HL/1/Rev.1).WT/COMTD/IF/25
Page 2
CONTENTS
Page
I. ECONOMIC ENVI RONMENT................................................................................. 3
A. Economic and Social Context........................................................................ 3
B. Macroeconomic Trends ................................................................................. 7
C. Challenges and Outlook................................................................................. 10
II. TRADE POLICY AND OBSTACLES TO  EFFORTS TO EXPAND TRADE ........... 11
A. Trade Policy...................................................................................................... 11
1. Trade policy manageme nt and obje ctives ............................................... 11
2. Export potential and outlook ................................................................... 13
3. Trade policy-making stru cture and mechanisms..................................... 16
4. Major trade policy  instruments................................................................ 17
5. Aspects related to the World Trade Organization (WTO) ................... .. 20
B. Obstacles to Efforts to Expand Trade ............................................................... 21
1. Supply constraints ................................................................................... 21
2. Trade promotion and tr ade support se rvices ........................................... 28
3. Market access .......................................................................................... 31
III. TECHNICAL ASSI STANCE N EEDS.......................................................................... 35
A. Technical Assistance as Regards Trade Policy................................................. 35
B. Technical Assistance in the Context of  the WTO............................................. 35
C. Technical Assistance with Respect to Supply................................................... 35
D. Technical Assistance in the Area of Trade Promotion and
Trade Support Services..................................................................................... 37
E. Technical Assistance as Regards Market  Access ............................................. 37
ANNEXES
Imports by group of products......................................................................................... 39
Exports by type of product............................................................................................. 40WT/COMTD/IF/25
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TRADE-RELATED TECHNICAL ASSISTANCE NEEDS -
ASSESSMENT BY CAPE VERDE
I. ECONOMIC ENVIRONMENT
A. Economic and Social Context
1. Geoclimatic characteristics and natural resources
The Cape Verde Archipelago, composed of ten islands, is situated in the area of the Sahel.
The climate is tropical arid and semi-arid and is affected by steady trade winds from the North.
Average annual rainfall is less than 300 mm. and the orographic characteristics help to accelerate
surface run-off, a contributing factor in the low rate of groundwater replenishment.  The country is
marked by the rarity, vulnerability and ongoing degradation of its fauna, flora, water, natural and
mineral resources.
Marine life is seen as an economic resource and comprises tuna and similar fish (some
indigenous and others migratory), gadidae (35,000 tonnes) and coastal pelagic species
(65,000 tonnes), spiny lobsters (5 species) and turtles.  The potential of the fisheries sector has been
the subject of several assessments and marine resources are considered to be one of the major
potential sources of wealth for Cape Verde.
The environmental degradation trend is exacerbated by substantial demographic pressure on
resources, together with inappropriate cultivation, technology, and modes of land occupancy andexploitation.
Despite the poor soil and lack of natural and water resources, Cape Verde's climate offers
very favourable conditions for the promotion of tourism.
On the one hand, renewable energy sources such as the sea, the sun and the wind constitute
abundant and invaluable natural resources for a country highly dependent on the import of petroleumproducts to meet its energy needs.  The extensive area of ocean, the constancy and speed of the wind,
together with the annual number of hours of sunshine, are potential sources of energy.
In addition, the archipelago is situated at the crossroads linking Africa, Europe and the
Americas, a privileged geographical position which in the recent past was of strategic importance as a
supply station for international maritime and air transport.WT/COMTD/IF/25
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2. Demographic situation
Population Trend, 1950-1990
(in thousands)
Year Male and female Male Female Male to female ratio (%) Rate of growth (%)
1950150.0 68.4 81.6 84.0
1960 199.3 92.3 107.2 86.1 2.88
1970271.0 129.0 142.0 90.8 3.12
1980295.7 135.7 160.0 84.8 0.88
1990341.5 161.5 180.0 89.7 1.45
Source:  General population censuses 1950-1990, General Directorate of Statistics (DGS).
From 1950 onwards, Cape Verde's population grew at a steady rate.  Despite the high
numbers migrating, the resident population more than doubled between 1950 and 1990.  According to
the 1990 census, the total population is 341,500 distributed unequally among the nine inhabitedislands of the archipelago.  The demographic st ructure shows the growing importance of youth.
In 1990, almost 45 per cent of the population of bot h sexes was less than 15 years old, whereas the
population aged 15 to 64 accounted for 49 per cent of the total.
A recent forecast of the "major demographic trends" in Cape Verde, based on the
performance of basic determinants such as mortality (in general and infant mortality), emigration andfertility, shows a total of 383,760 in the year 2000 and 437,380 in 2010.  This forecast assumes that
Cape Verde is undergoing a demographic transition with a decline in mortality and fertility trends and
a significant impact on emigration, which alone helps to lower the resident population.  In the future,
the demographic situation will undoubtedly lead to considerable pressure on natural resources, the
environment, the urban infrastructure, the education system, employment, the health system, and thehousing and sanitation infrastructure.
3. Production system
Sectoral Structure of the GDP
(1980 constant prices as a percentage)
1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992
I 19.2 16.5 12.9 11.6 11.5 13.3 13.8 17.4 17.8 16.4 14.5 13.5 12.3
II 16.3 17.0 16.4 17.7 16.9 17.9 17.8 19.1 18.5 19.4 19.5 19.6 19.7
III 58.2 60.7 64.1 63.3 64.5 61.8 61.8 58.3 58.3 60.1 60.6 60.5 60.6
Source:  DGS.
The narrow domestic production base means that the economy is highly vulnerable to
imports, exports, external capital flows and private transfers from migrants.WT/COMTD/IF/25
Page 5
The structure of the GDP is dominated by the services sector (60.6 per cent in 1992),
followed by the secondary sector (19.7 per cent) and, lastly, the primary sector with 12.3 per cent.
3.1 The primary sector and food security
Meeting Food Needs (1992-1995)
1992 1993 1994 1995
Production (tonnes)10,265 11,888 3,163 8,166
Needs as a percentage10.8 12.5 3.1 8.1
Commercial imports (tonnes)44,700 22,200 25,000 20,418
Needs as a percentage47.3 23.5 24.8 20.3
Food aid as a percentage41.9 64.0 72.1 71.6
Source:  Food security strategy, DGDI, CNASA Bulletin No. 9.
Agriculture, livestock rearing and forestry dominate production in the primary sector.  In
general, production does not meet food needs, particularly for cereals.  The deficit is covered by
imports and food aid.  Between 1992 and 1995, cereal production and imports covered an annual
average of 37.5 per cent of needs.  Over 50 per cen t of consumption requirements were therefore met
by food aid.  This form of aid also has a marked effect on investment because the funds resulting from
its sale represent between 12 to 15 per cent of public investment expenditure.
Agricultural production centres on the islands of Santiago, Santo Antão and Fogo and is
governed by the unpredictability of rainfall, the limited amount of land suitable for cultivation,
inappropriate crop-growing practices and techniques, and cultural factors.  Irrigated crops onlyoccupy 5 per cent of arable land, which itself only accounts for 10 per cent of the surface area.  The
share of agriculture in GDP form ation is generally unpredictable and ranges from 10 to 17 per cent,
although it is estimated that over one quarter of the total working population is employed in this
sector.
Animal production is fairly restricted and in 1992 only represented 1.2 per cent of GDP.  The
majority of farms are family-owned (over 99 per cent), while cooperatives (or associations), and
enterprises only account for around 0.5 per cent.
The fisheries subsector is dominated by:
(a) Oceanic pelagic resources (tuna, sharks, swordfish);
(b) coastal pelagic species (horse mackerel, mackerel, etc.);
(c) spiny lobsters (pink, green and brown spiny lobsters and rock lobster);  and(d) gadidae (scorpion fish, sea bream, hake, etc).
Fishing is carried out by industrial fleets (small vessels with inboard engines) or traditionally
(in small boats with or without motors).  The share of fisheries in the GDP fell from 4.8 per cent
in 1980 to 2.1 per cent in 1985 and 1 per cent in 1992, although in recent years there has been a clearreverse trend.  The outlook for the development of aquaculture in Cape Verde is promising for
mariculture.  The constraints that prevent an incr ease in the fisheries subsector's share of the GDP
include the following:WT/COMTD/IF/25
Page 6
(a) Inappropriate fishing techniques;
(b) obsolescence of the fishing fleet;
(c) inadequate supplies of fishing equipment;
(d) low level of training of fishermen;  and
(e) problems in disposing of and storing catches.
Mining does not yet play any major role in the industrial sector.  It consists of enterprises
working in salt mining, quarrying sand, pozzolana, plaster and stone for building and masonry.
3.2 The secondary sector and processing industries
The secondary sector is virtually dominated by the building industry.  This is one of the most
important sectors in the country both in term s of investment and production and employment.
In 1992, the building industry accounted for 14 per cent of GDP formation, while the contribution of
the sector as a whole was 19.7 per cent.  The industrial sector still plays a fairly limited role in Cape
Verde's economy both in terms of its contribution to  GDP formation, in job creation, and the export of
goods and services.  It is made up of a small number of unrelated industrial branches.  In the main,
these  are composed of small and medium enterprises, mostly belonging to the private sector.  There is
a large number of small-scale family units of limited size, for example, domestic bakeries, small-scale
production of spirits, etc., the majority of which belong to subsectors of the food industry (bread-
making), beverages and tobacco, textiles, chemicals, footwear, civil engineering, carpentry/furnishing.Food and beverage activities occupy an important place.  These are followed by tobacco, machinery
and naval repairs, carpentry, electricity and water.  The timber and furnishing industry accounted
for 3 per cent of industrial investment in 1995, 2.5 per cent of the value of production and of GVA
and 8.1 per cent of total employment in the industrial sector in 1994.  Textiles, clothing and footwear
are among the subsectors that have experienced significant growth due to foreign investment andexports.  The graphic arts are dominated by a limited number of small-scale industrial units.  The
chemicals industry (medicines) does not yet occupy an important place.
The following are some of the elements that determine development in this sector:
(a) The limitations of the production, transport, energy, water and sanitation
infrastructure;
(b) the lack of a financially stable and organized category of entrepreneurs ready to
undertake activities and assume risks;
(c) the relatively high cost of factors such as water, energy and telecommunications;
(d) the absence of a vocational training policy adapted to the country's industrialization
prospects;
(e) the scarcity of natural resources and the small size of the domestic market, which
determine the possibilities in terms of technology and profitability of investment;
(f) restricted access to technology and little industrial tradition.WT/COMTD/IF/25
Page 7
3.3 The services sector and trade
This sector occupies the predominant place in the domestic production structure and plays an
increasingly important role in GDP formation (58.2 per cent of GDP in 1980 and 60.6 per cent
in 1992).  Overall, it employs the largest number, providing 40.7 per cent of total jobs in 1990.  It is
dominated by services such as government services  (13.3 per cent of GDP in 1992), air, maritime and
road transport, banking and insurance, hotels, restaurants, housing, etc.
The trade subsector occupies an important place in terms of GDP formation.  Its share has
nevertheless tended to decrease over the years (29 per cent of GDP in 1980 and 20.4 per cent
in 1992).  As Cape Verde's economy becomes integrated in global markets, it is called upon to play a
decisive role in the domestic economy by creating new bases for economic growth, mainly sustained
by expansion of exports.  It has a markedly traditional structure and consists of a large number of
small-scale and family-based trade outlets concentrated in urban areas, with low productivity, badly-
functioning channels of distribution and the absence of an appropriate infrastructure.
Domestic trade is principally supplied by imports, which play an important role through their
impact on domestic production and on economic development.  It has to face the structural constraints
caused by distribution channels (preservation and transport structures), storage, quality control,
commercial and management skills.
Informal trade has reached an unprecedented level and already ensures the domestic
distribution of almost all local production of the fisheries, agriculture and livestock rearing sectors,
and it has reinforced its position in the distribution of industrial products.  Through its informal
imports component, it also ensures the supply of over 50 per cent of certain categories of goods and,
according to estimates, its share of total imports exceeds 14 percentage points.
B. Macroeconomic Trends
1. Development of the economy
In 1991, Cape Verde decided to adopt a market economy based on the private sector.  In the
area of production and distribution, the private sector is gradually taking over from the State and
direct economic control mechanisms are being replaced by indirect control mechanisms.  Public
enterprises are starting to be replaced by private enterprises in all sectors of activity, includingbanking.  Large-scale economic reforms are being carried out with a view to creating a legal and
institutional framework for an economy based on the private sector and regulated by market
mechanisms.
In addition, the decision to adopt a market economy and integrate Cape Verde in the global
economy have meant creating conditions capable of attracting foreign investment capital andtechnology by simultaneously encouraging the domes tic economy to participate to a larger extent in
international trade and by fostering local business initiative.  Fiscal policy is therefore aimed at giving
Cape Verde a modern, appropriate, simple and efficient fiscal system that can at the same time ensure
more revenue for the State, more equitable taxes and greater economic efficiency.  Budgetary policy
is directed towards macroeconomic stability.  Monetary policy is aimed at containing inflation,
stabilizing the value of the currency and external balance and, lastly, trade is being liberalized through
the gradual elimination of import ceilings.  An in-depth reform of the financial system has begun andthis sector is open to foreign investment.
A large amount of public expenditure is being channelled towards infrastructure sectors such
as transport, communications, energy and construction, giving the economy an annual average growth
rate of 4 per cent between 1991 and 1995, with domestic consumption steady at around 111 per centWT/COMTD/IF/25
Page 8
of GDP, despite a marked deterioration in 1995, when it rose to 117.5 per cent of GDP.  The public
consumption component constitutes one of the main causes of this increase in overall consumption.  It
rose from 20.25 per cent of GDP in 1991 to 30.18 per cent in 1995.
Inflation, measured by the consumer price index, fell from 8.1 per cent in 1991 to 3.5 per cent
in 1994, then rose to 8.4 per cent in 1995.  The decrease noted in the former years was due to the
combination of a number of local and external favourable factors.  The following were among thelocal factors:
(a) Liberalization of trade and imports and the resulting increase in competition and the
domestic supply of imported products;
(b) the price policy imposed for certain essential goods such as rice, wheat, maize, edible
oil, energy, etc.;
(c) the exchange policy tied to stable domestic prices.
Since Cape Verde imports over 60 per cent of GDP in order to meet domestic demand, among the
external factors which had a beneficial effect was the reduction in inflation in the major supplier
countries in recent years.  The increase in 1995 was due to a bad year for agriculture in 1994 and also
no doubt to the domestic demand pressure resulting from the expansionist budgetary and monetary
policy.  Wages rose at a higher rate than the nominal growth rate in GDP.
Government finance continues to deteriorate.  The global deficit, not including external
grants, rose from -19.9 per cent of GDP in 1991 to -33.2 per cent in 1995 and, including grants,
increased from -8.9 per cent to -15.9 per cent of GDP.  Total expenditure overall (37.5 per cent of
GDP in 1991 and 59.4 per cent in 1995), is increasing at a substantially higher rate than the increase
in earnings (even though this is higher than the average for developing countries, i.e. 26 per cent of
GDP) and is the main cause of this deterioration.  Current expenditure rose from 19.6 per cent of GDPin 1991 to 28.8 per cent in 1995.  Personnel costs, which are the main component, took up nearly
52 per cent of current expenditure.  The external financing of the global deficit, including grants,
was 11.8 per cent of GDP in 1991 and 20.7 per cent in 1995, of which 10.9 per cent and 16.5 per cent
respectively corresponded to grants.  Domestic financing, which accounted for 8.1 per cent of GDP
in 1991, rose to 10.3 per cent in 1995 and the new financial instruments recently introduced as part ofthe financial reforms (treasury bonds and notes) corresponded to 3 per cent of GDP in 1994 and 6 per
cent in 1995.
Between 1991 and 1995, the quantity of money rose at an average rate of 14.9 per cent per
annum, a much higher rate than the 9.1 per cent average growth in the GDP.  In 1992 and 1993,
domestic credit rose at a rate lower than that of the quantity of money, but this situation was reversedin 1994 and 1995.  The escudo appreciated by 3.42 per cent in 1994 and 2.14 per cent in 1995.
2. International economic relations
As far as international economic relations are concerned, the following table shows that,
from 1991 onwards, Cape Verde's foreign accounts, which had a structural deficit, deteriorated
significantly.WT/COMTD/IF/25
Page 9
Balance of Payments
(in Escudos millions)
1991 1992 1993 1994 1995
Current account balance -623.4 -971.3 -2,358.8 -4,034.8 -4,579.6
Not including grants -623.4 -4,932.7 -5,133.4 -7,302.6 -8,277.8
Trade balance -8,840.2 -11,085.3 -11,873.4 -15,577.0 -17,302.6
Exports f.o.b. 296.0 301.7 311.4 397.8 646.5
Imports f.o.b. -9,136.3 -11,386.9 -12,184.5 -15,974.8 -17,949.1
Non-factor services, cash 1,799.6 1,327.1 1,352.6 1,948.8 1,679.9
Factor services, cash 29.8 73.1 -299.7 -288.8 -408.4
Current transfers, cash 9,387.4 8,713.7 8,461.6 9,882.3 11,351.6
Capital accounts 501.8 1,044.3 1,529.8 3,104.7 5,312.8
Direct investment and grants for projects. 641.5 572.3 1,769.1 1,839.1 2,352.7
including:  grants for projects 555.9 623.5 1,529.4 1,604.8 1,581.8
Global balance -760.4 237.2 -935.3 -1,669.7 581.8
Change in cash reserves 694.7 -596.8 1,001.0 1,388.6 -1,152.3
Source:  National Development Plan (NDP) 1997-2000.
The trade balance increased from -38.7 per cent of GDP in 1991 to -53.4 per cent in 1995 and,
despite the increase in external transfers, the cu rrent balance, including grants, amounted to -14.2 per
cent of GDP in 1995 compared with -2.7 per cent in 1991.  Although there was a sharp rise in capital
flows, the global balance showed a large deficit, -3.5 per cent of GDP in 1993 and -5.9 per cent
in 1994.  The deficit was financed by arrears (interest and capital) and by a decrease in foreignreserves of US$12.4 million in 1993 and US$17 million in 1994.  As a result, the reserves available to
the monetary authorities decreased from 5.2 months of imports in 1991 to 2.2 months in 1994
and 2.5 months in 1995.
Cape Verde's trade balance suffers from a structural deficit.  One of the causes of this
deterioration in the trade balance is the rapid growth in imports, partly as a result of the foreign trade
liberalization policy and investment efforts.  There is  significant growth in exports, with substantial
changes in their structure:  footwear and clothing now occupy the first place instead of bananas andfisheries products.  This increase in exports to a la rge extent reflects the effort to revitalize foreign
direct investment and exports, particularly through free enterprises.  Services exports have become
increasingly important.  In 1980, they corresponded to 68.5 per cent of total imports recorded and
in 1992 this figure had risen to 80.5 per cent.
Imports have increased exponentially and amounted to 55.7 per cent of GDP in 1995
compared with 40.1 per cent in 1991, a level that exceeds Cape Verde's actual possibilities.  On the
other hand, the trend in imports can be deemed positive.  The balance of non-factor services helped toWT/COMTD/IF/25
Page 10
finance the deficit between 1992 and 1995, with an average positive balance of around
US$20 million.  The balance of factor services, on the other hand, became negative in 1993.
The trend in imports has led to external constraints and has had negative effects on economic
performance.  This both reflects and determines budgetary, monetary, exchange and income policies
within the context of a high degree of reliance on outside sources to meet the needs of economic
agents, and particularly of consumers, for goods and services.  The short-term negative effects of thisincrease in imports could, in the medium and long terms, be offset by the broad positive impact of
increased exports since the structure of imports shows a high rate of growth in building materials,
intermediate and capital goods.
Unilateral transfers have led to a significant and growing mobilization of external resources,
corresponding to 30.4 per cent of GDP in 1991 and 40.2 per cent in 1995.  The capital account
balance, the main source of financing for the current account deficit, rose from 2.2 per cent of GDP
in 1991 to 16.5 per cent in 1995, above all due to public borrowing (including public enterprises) inorder to finance investment programmes, US$8.8 million in 1991, US$38.6 million in 1994 and
US$23 million in 1995.  The annual average amount of repayments between 1991 and 1995 was
around US$10 million.  Foreign direct investment of close to US$3 million in 1993 and 1994 became
more important in 1995, amounting to US$23.8 million.
C. Challenges and Outlook
Results Expected
(Percentage of GDP)
1997 1998 1999 2000
Economic growth5.0 5.6 5.8 5.5
Economic growth/per capita2.4 3.0 3.2 2.9
Public consumption29.0 24.1 22.4 21.0
Inflation6.0 3.5 3.4 3.2
Budgetary balance-33.0 -23.8 -20.5 -17.4
Foreign reserves*8.0 7.4 7.3 7.3
*In months of imports.
Source:  NDP 1997-2000.
The options in the 1997-2000 plan see Cape Verde's dynamic integration in the global
economy as constituting the strategic basis for self-sustaining economic and social development and
the goals of all macroeconomic and development policies are governed by this overall objective.  The
table above shows the main results expected from development policies over the next three years.
With a view to promoting supply, the objective set for the period of the Plan is growth in GDP at a
rate of not less than 5 per cent.
It is estimated that real growth in exports of manufactures will be 47.5 per cent in 1997,
101.2 per cent in 1998, 91.8 per cent in 1999 and 11.4 per cent in 2000.  Because of the limited scope
of the domestic market, it is considered that promoting the export of manufactures based on foreign
investment is the development strategy to be follo wed.  The objective of exchange policy will be toWT/COMTD/IF/25
Page 11
ensure the stability of real and nominal effective exchange rates so as to provide a sustainable
guarantee of external balance and price stability.  Reserves should cover not less than 6 months of
imports and the annual inflation rate, measured according to the consumer price index (CPI), should
not exceed 3.5 per cent.
The outlook for employment is that, with an average GDP growth rate of 5 per cent over the
period of the Plan, the economy will create enough jobs to lower the unemployment level.  Monetarypolicy will be directed towards achieving the objectives of economic growth, price stability and
safeguarding the necessary internal (credit trends) and external (reserves) balances.  The quantity of
money should thus increase at the nominal rate of GDP growth and economic credit will in the first
place go to the private sector.
The main objective of budgetary and fiscal policies will be to make sufficient savings to
finance the counterpart of public investment programmes.  The objectives of budgetary policy can be
resumed as follows:
(a) The aggregate budgetary deficit financed by internal resources must not exceed 5 per
cent of GDP, although the loan taken out by the Government with the banking system
should be nil;
(b) the operational budget should be balanced;  and
(c) the increase in the level of  current expenditure should be controlled.Fiscal policy will take into account economic efficiency, fiscal equity and the need to improve
internal and external balances.  Current earnings should be maintained at 25 per cent of GDP, capital
earnings should decrease following privatization and wages should increase at the same rate as
inflation.
II. TRADE POLICY AND OBSTACLES TO EFFORTS TO EXPAND TRADEA. Trade Policy
1. Trade policy management and objectives
1.1 Strategic management
Cape Verde covers a very small area:  it is in the form of an archipelago made up of ten
islands covering a total of 4,033 km2 ; there is an even smaller area of cultivable land (40,000 ha;10 per cent of the surface);  it is dependent on unpredictable and sparse rainfall, less than 300 mm)
and has a fragile ecosystem; the population is extremely small (around 375,000);  natural resources
are few and not very varied.
For these reasons, worldwide trends and the reliance on the globalization of the economy and
regional integration are seen as a unique opportunity if globalization and regionalization giveCape Verde new and substantial market potential.  Moreover, these global trends are likely to increase
the potential represented by Cape Verde's geoeconomic situation, benefiting from its pivotal location
at the crossroads of maritime, air and communi cations routes.  At the same time globalization,
combined with its geoeconomic situation, makes Cape Verde a country with a vocation to facilitate
communication among the economic regions being established around the shores of the Atlantic so
that the country can (once again) play a new role in global traffic.WT/COMTD/IF/25
Page 12
Immediately after independence in 1975, and up until 1998, Cape Verde pursued a
development strategy that gave priority to reso lving serious social problems (employment, food,
health, education, basic sanitation) and economic problems (infrastructure essential for a development
base).  The development model followed during this phase called for a high degree of State
intervention in which priority was given to activities oriented towards the domestic market and the
public sector, which necessitated administrative tools to control the economy directly, combined withthe establishment of public enterprises in all economic spheres.
In 1998, the change to economic openness was accelerated by the sombre outlook for
economic growth, underscored by decline in econom ic performance and the reinforcement of internal
and external imbalances.  Consequently, the adoption of an externally-oriented development strategy
called for in-depth economic reforms, which were approached with great timidity.
Within this economic context, the new Government voted in as a result of the first multiparty
elections in January 1991 undertook to carry out a wide-ranging series of economic reforms within theframework of a development strategy based on the dynamic integration of the Cape Verdean economy
in the global economic system.  These reforms focused on a new economic paradigm that implicitly
assimilated economic theses such as the following:
(i) Free trade;
(ii) the private sector as the motor of the economy;(iii) markets as the main economic regulator;
(iv) the State as the promoter and facilitator of development and regulator of economic
activity.
1.2 Overall objective
Cape Verde fully accepts the challenge of globalization, on the understanding that its
integration and incorporation into the global economy will be in a form that allows it to achieve real
self-sustained development, but is aware that taking advantage of this opportunity will not be an easy
task.  This attitude is consistent with the development strategy option based on Cape Verde's dynamic
integration in the global economic system on the basis of the following principles of international
economic relations and equitable development among nations:  interdependence, solidarity and equityin relations among countries; free trade and freedom of movement for persons, goods, capital,
technology, knowledge and know-how among countri es; respect for the ecological balance and the
legitimate objectives of development and the welfare of peoples.
Within this framework, the major trade policy objectives are the following:
- The promotion of trade and the development of exports;- the development of markets and domestic demand, fully integrated within the broader
context of global markets and seen as an essential component in the
internationalization of domestic enterprises;
- efforts to achieve better internal and external balances.WT/COMTD/IF/25
Page 13
2. Export potential and outlook
2.1 Sectors where the export potential is not exploited or is little exploited (goods and
services )
Under-exploited agricultural and fisheries products
Bananas
Fisheries products (particularly tuna), fresh, frozen or cannedAquaculture
In recent years, bananas have lost their export potential as a result of international competition
and the loss of traditional markets in Europe, which now has new regulations on bananas.  The current
level of investment indicates a recovery in exports, which should reach 4,000 tonnes by the year 2000.
Fisheries (together with tourism) are one of Cape Verde's scarce natural resources and this
sector is deemed to present relatively good opportunities for development.
Data show, however, that this potential is under-exploited.  The greatest constraints are due to
the inadequacy of the fishing fleet, rudimentary fishing techniques, and an inadequate or inappropriate
processing and marketing infrastructure.  The Government strongly supports the development of this
sector, focusing attention on both industrial and small-scale fishing.
Products of the mining industry
Salt (not exploited at present)
Pozzolana ( " " )
Mineral and table waters (never exploited on an industrial scale)
Decorative rocks (marginal exploitation)
The first two products have already been export ed in large quantities.  They have, however,
lost their export potential, notably because traditional production techniques continue to be used.Further investment has been made in salt production and studies have been carried out to re-launch
the production of pozzolana.
Ethnic products (marginal/informal exploitation)
Spirits and sugar cane honey
Canned tunaSugar confectionery and biscuits
Lace and embroidery
Cape Verde has a long tradition of making these products and they are therefore of
considerable cultural importance.  For emigrants, they represent a way of feeling nearer home.  These
products have been identified as possessing considerable export potential for the ethnic market, butthere are a number of constraints, including problems of production (small quantities), technical
standards, (quality, packaging, labelling), transport and distribution channels.WT/COMTD/IF/25
Page 14
Products of light industry
Clothing
Footwear
Medicines
The export potential in the clothing sector is due to the considerable skill of the workers, both
qualified and unqualified, the great interest shown by foreign investors, and access facilities onseveral markets.  Footwear is in the same situation.  Nevertheless, with the conclusion of the Uruguay
Round negotiations and the creation of the WTO, the question of the future of access preferences in
traditional markets for Cape Verde's clothing and footwear products causes considerable concern.
International services
Tourism
Transport services
Shipping, transhipment and commercial warehousingAir and maritime traffic services
International registration of vessels
Telecommunications services
Data teleport/processing and transmission services
New services
Financial services
Offshore banks
Naval repairs
Tourism has considerable potential and is deemed to be one of the most promising sectors for
Cape Verde's economic development.  The volume of internal and external investment is rising but isstill far from meeting expectations.  However air ticket prices and better integration of certain
complementary activities, for example, cultural activities and handicrafts, will mean higher profits.
2.2 Changes in the structure and orientation of imports and exports
Trade in goods and services
Value = US$ million 1991
(US$ = 71.41)1996
(US$ = 82.59)
Exports (f.o.b.)4.15 12.57
Imports (f.o.b.)122.78 205.67
Trade balance goods-118.63 -193.10
Coverage ratio3.4% 6.1%
Services liq. (non-factor)25.20 20.91
Goods and service balance-93.43 -172.19WT/COMTD/IF/25
Page 15
Principal Sources and Destination of Trade in Goods
(Percentage)
Suppliers 1991 1996 Customers 1991 1996
Portugal34.2 40.9 Portugal 66.0 75.6
Netherlands9.8 7.6 Spain 0.0 11.4
France2.1 5.6 France 0.0 01.9
Spain5.4 3.8 Netherlands 10.4 0.5
United States1.4 3.6 ECOWAS 0.2 0.5
Germany6.3 3.0 -
ECOWAS 4.9 3.1 -
Other 35.9 32.4 Other 23.4 9.0
In 1996, 2,233 goods were imported from 77 countries and 40 products were exported to
17 countries.  There was a strong focus on trade with the European Union for both imports and
exports, with Portugal occupying a special place as Cape Verde's leading trade partner.
There was extremely high growth in imports between 1991 and 1996 due to the gradual
liberalization of import policy in favour of the private sector and the public investment effort, as well
as to the improvement of the economic infrastructure and foreign direct investment.  Over this period,the importance of the European Union as a supplier and customer was reaffirmed and the volume of
trade with Portugal increased.
The export trend was fairly positive, both in terms of value and structure, manufactures
(footwear and clothing) became more important as a result of the foreign investment and export
promotion policy.  At the same time, there was a decline in traditional exports, above all bananas.
Despite encouraging signs, exports continued to lag behind imports.  From 1995 onwards, exports
tended to focus on two products of free enterprises in particular.  Footwear and its components and
clothing account for 76 per cent of Cape Verde's exports.
In view of the investment being made, a slight change in the structure and pattern of foreign
trade is to be expected.  In the case of imports, the role of raw materials and equipment will become
more important to the detriment of consumer goods.  Measures are therefore being taken to redirect
suppliers in order to lessen the cost of factors.  In the area of exports, labour-intensive products of
light industry (footwear and clothing) and fisherie s will continue to grow in markets where Cape
Verde enjoys access facilities.  In agriculture, there is expected to be strong growth in exports of
ecological bananas.
Cape Verde's economy is essentially a services economy.  During the period 1992-1995,
non-factor services had an average positive balance of US$20 million.  Passenger transport, fuel
supply services, port and airport services, ship and plane repairs, communications, tourism and civil
engineering provide the major portion of cash receipts, while cash expenditure is on freight and
chartering and government costs.  Cape Verde is trying to promote certain international services such
as communications technology (data processing and teleport), transhipment and commercial
warehousing, offshore banks and the international registration of vessels, and also to strengthenmarine and air traffic services and tourism.  Taking into account the current level of foreign direct
investment, the tourism sector is expected to make a substantial contribution.WT/COMTD/IF/25
Page 16
3. Trade policy-making structure and mechanisms
3.1 Overall framework
The Constitution provides for full separation of the Legislative, the Executive and the
Judiciary.  The National Assembly has the legislative power and the Government the executive
power, with the Prime Minister as its leader.  The political system is based on political parties and the
party which receives the most votes at the parliamentary elections held every five years becomes thegovernment.  There are presently three political parties in the National Assembly.
Trade policy is part of the Government's five-year programme, the five-year National
Development Plan and the annual State budget, all subject to the approval of the National Assembly.
3.2 Trade policy-making structure
The Council of Ministers is the supreme body of the Government and is the forum and last
instance for policy-making and control.  It bears political responsibility for implementation, although
ministries are still held accountable.  There is a Council of Ministers for economic affairs, which iscomposed of the ministries dealing with economic matters, and a Ministry of Economic Coordination
has been set up to improve coordination of the economy as a whole.
Ministry of Economic Coordination
This Ministry is responsible for guidin g the development strategy and formulating,
elaborating, implementing and supervising the Government's overall economic policy in order tofacilitate coordination and harmonize the various sectoral policies in the economic field.  This
Ministry covers governmental areas such as the economy, finance and planning, industry, trade,
tourism and energy and development.
The following are some of the Ministry's functions:
- To guide the country's socio-economic development strategy;
- to link and harmonize the policies, instruments and measures of various ministries
and other public bodies involved in economic and financial matters;
- to coordinate the Government's macroeconomic policy;- to exercise authority in relation to fiscal, customs and financial matters, in accordance
with the legislative provisions;
- to make proposals and promote the implementation of domestic policies, on tourism,
industry, energy and trade;
- to support economic agents and foster private initiatives in the sectors under its
responsibility and to promote the necessary measures and action for the creation of a
favourable environment for their activities.
It should be stressed that the major macroeconomic instruments for the implementation of
economic and trade policies are centred on this Ministry, for example, budgetary, fiscal and customs,
monetary, credit and foreign exchange, income and price instruments.
The sectoral ministries involved in econom ic and trade policy include the following:WT/COMTD/IF/25
Page 17
- Ministry of Agriculture, Food and the Environment;
- Ministry of Maritime Affairs;
- Ministry of Infrastructure and Transport.
3.3 Advisory bodies
It is customary to consult various professional associations regarding matters that concern
them, for example, Chambers of Commerce and other associations representing various sectors ineconomic and social life.  Representatives of the private sector also sit on the board of several
institutions, including PROMEX (Centre for the Pr omotion of Tourism, Investment and Exports),
IADE (Enterprise Development Support Institut e), IEFP (Employment and Vocational Training
Institute), etc.
Today, social partnership has become an indispensable part of democracy, especially where
the objective is to harmonize and reconcile interests.  In fact, bearing in mind the role allotted to the
private sector as the catalyst for development, there is no other way.
4. Major trade policy instruments
4.1 Background
Since 1991, the Government has sought to promote economic and trade liberalization
policies.  Following a situation in which imports we re wholly controlled through prior authorization
and quantitative restrictions, the gradual liberalization of foreign trade began in December 1991.
A number of in-depth reforms of institutions and systems are being implemented with the aim
of promoting the revitalization of enterprises;  for example, reform of trade legislation with a view to
liberalization, reform of institutions and systems so as to simplify methods and procedures, notably
trade-related administration, opening up all economic and trade activities to private initiatives.  The
adoption of new regulations on foreign investment, the promotion of exports, free enterprises, labour,fiscality and the financial and banking sector have become necessary in order to develop production
and exports.
Cape Verde's currency (the escudo) has no fixed parity, is not convertible and its strength is
relative.  Between 1991 and 1996, it depreciated by 1.5 per cent in real terms but, despite the
precautions taken, it rose by 3.2 per cent in 1994 and 2.14 per cent in 1995, with negativemacroeconomic consequences on the economy's external competitiveness.  Like monetary policy,
exchange policy will continue to be linked to stable domestic prices and external balance.  By force of
circumstance, this balancing game is not favourable to exports, particularly since the exchange rate is
fairly high.  Exchange control measures will continue.  Nevertheless, the possibility of making Cape
Verde's currency convertible is being studied.
Customs duties bear more relation to the need to obtain fiscal receipts.  Import taxes continue
to play a leading role in the fiscal revenue structure, although their importance has tended to diminish
slowly (45.5 per cent of revenue in 1991 and 44.7 per cent in 1995).  The tax reform under way has
already led to the introduction of a standard turnover tax in 1996 and should end with the introduction
of VAT (value added tax) so as to act on expenditure.
Exports are not subject to any type of restriction and leave the country completely duty free.WT/COMTD/IF/25
Page 18
Three types of entry duties apply to imports:  customs duties, at rates ranging from zero to
50 per cent according to the type of product.  This category also includes a standard rate of 7 per cent
for general fees because their effect is the same as that of a customs duty, although this does not apply
to medicines nor to a large number of goods subject to fiscal exemption regimes.  The consumer tax is
a fiscal import duty that does not apply to all products.  Its ad valorem  rates range from 10 to 60 per
cent and eight products are subject to specific taxes.  The third type of import duty is made up ofvarious taxes:  stamp duty, a tax of 1.07 per cent applicable to goods entering by sea, a special
consumer tax (specific tax) on tobacco and alcohol, and the new ecological tax which has not yet been
applied.
4.2 Import authorizations
The exercise of industrial and trade professions is subject to prior authorization according to
the legal terms and conditions.  In general, foreign trade operations are subject to the direct or indirect
control of the Directorate-General of Trade and/or the Central Bank and/or the Directorate-General ofCustoms, according to the regime.
All goods for export or re-export are exempt from prior authorization and customs taxes and
duties if the operation is carried out by a body registered for this purpose with the Directorate-General
of Tourism, Industry and Trade or PROMEX (the only authority for foreign investment enterprises).
Commercial exports by informal operator s must have an export licence (BRPE).
Currently, imports are subject to the following licensing regime:
- Import declaration (DI):  this general regime was introduced in January 1992 and was
the basis for the elimination of import quotas.  Authorization for goods under this
regime is automatic and immediate, the DI being needed for statistics and short-term
foreign exchange planning;
- prior import registration certificate (BRPI):  goods subject to quantitative restrictions
must have prior authorization from the trade (Directorate-General of Trade) and
foreign exchange (Bank of Cape Verde) authorities.  The list of such products is now
fairly limited and mainly concerns certain goods produced domestically and products
which are generally supplied by international food aid.
4.3 Customs regimes
The storage of goods while awaiting a subsequent decision on their customs destination, their
use or processing for re-export are economic activities whose customs implications are covered under
the economic regimes.
In addition to the import, export and re-export customs regimes and the conditional relief
regimes, Cape Verde currently has a series of special economic regimes that exempt or limit duties
and other customs taxes upon import or provide that goods acquired abroad may be imported into
Cape Verde for a certain time for commercial or industrial purposes without being cleared.
4.3.1 Duty-free entry or tariff exemptions
There are several legal provisions concerning the following:(i) Special production sectors (industry, fisheries, agriculture, tourism) where economic
activity is being promoted;  orWT/COMTD/IF/25
Page 19
(ii) entities or persons not involved in production (Law No. 106/IV/94) but mainly
dealing with imports (State, cooperatives, diplomatic corps, international
organizations, charities, donations or relief, travellers, etc.).
Industry  (Decree Law No. 108/89 - Industria l statute) (Law No. 49/III/89 - Foreign
Investment Law) (Law No. 50 /III/89 - Industrial Development Law) (Decree No. 156/90 -
Implementing the industrial statute):  industrial ente rprises are exempt from duties, consumer tax and
general fees on the import of building materials, capital goods, loading and transport equipment to be
used exclusively for these activities, fuel, with the exception of petrol, used to produce electricity and
desalinated water.  Raw materials and intermediate goods used to manufacture final products are
exempt from all duties and consumer tax during the installation stage and for the first two years of
operation.  Over the following three years, these taxes are gradually reduced so that at the end of five
years they are no longer applicable, pursuant to Law No. 95/IV/93 - Article 18 - Exemption from
consumer tax.  The exemption period may be extended as a result of other specific incentives.
Fisheries (Decree-Law No. 153/87):  vessels are exempt from duties and general fees and are
not subject to the consumer tax, with the exception of vessels used for transport and inshore fishing.
Material to be used to build or repair vessels, equipment, tackle and spare parts, and outboard motors
for small fishing boats are also exempt from duties and consumer tax.  Industries involved in canning,
drying, smoking and salting fisheries products enjoy the benefits provided under the industrial statute.
Agriculture and livestock rearing (Article 3 of Decree No. 41.024/57;  Article 8,
paragraph (d), of Decree No. 606/73;  Decree No. 62 /74):  farms involved in agriculture and livestock
rearing are exempt from duties, general fees and consumer tax on the import of plants, seeds,
fertilizer, insecticides and other products to be used for cultivation or disinfecting agricultural
products;  equipment, agricultural machinery, tools and ploughing utensils, metal structures, materialsfor temporary buildings, and fencing materials.
Poultry farming (Decree-Law No. 114/83):  exem ption from duties and general fees for the
import of poultry to be used to produce poultry meat and eggs.
Tourism (Law No. 42/IV/92):  enterprises deemed to be of importance for tourism are exempt
from duties and consumer tax on the import of building materials, machinery, equipment and their
accompanying spare parts, tools and utensils (furniture, crockery, glassware, etc.) needed for their
establishments, sports equipment and materials to be used for cultural activities, buses and
automobiles for the transport of freight to be used exclusively by hotels.
4.3.2 In-bond warehouses (Decree No. 27/89)
The in-bond warehouse regime allows goods to be stored in a particular place under customs
control without payment of duties and other customs taxes, and without being subject to prohibitions
or other economic policy measures.
Storage warehouses to be used exclusively for commercial purposes with the intention of
building up stocks so as to ensure sufficient supplies when needed.  These may be public or private.
Goods may be stored in such warehouses for th ree years, which may be extended for two further
periods of six months each.
Industrial warehouses to be used exclusively by industrial enterprises to store goods from
abroad to be incorporated in products of the industry in question, or in the processing or packaging of
such products.  Industrial warehouses give industries the benefits of a free zone without the
disadvantages and are the basis for the legal regime on "free enterprises" solely devoted to export.WT/COMTD/IF/25
Page 20
The maximum duration for storage of goods in this type of warehouse is two years, which may be
extended for two further periods of six months each if there is due cause.
4.3.3 Temporary import (Decree No. 41.02 4/57, Decree-Law No. 108/89, Decree
Law No. 16/77, Decree-Law No. 39/88)
There are two types:  temporary import for re-export without further processing (for example,
automobiles for domestic or foreign tourists and for fo reign technicians, machines to be used to carry
out work);  temporary import for industrial purposes, i.e. for re-export after processing, repair or
additional manufacturing (finishing).  This regime has become somewhat less important since the
creation of the industrial warehouse regime.
4.3.4 Drawback (Decree No. 32.115/42)
The drawback regime (repayment of customs duties) existed in legislation prior to
independence and applied to groundnut oil, olive oil and tin-plate for the fish-canning industry.  It is
not used at present because there are other more attractive regimes that are easier to apply(exemptions, warehousing and temporary import).
5. Aspects related to the World Trade Organization (WTO)
5.1 Adjustment to the principles and rules of the WTO
Cape Verde is giving favourable consideration to requesting accession to the WTO.
Until independence in 1975, Cape Verde was associated with GATT as a colony of Portugal,
which was a Member of GATT.  Subsequently, until the WTO was established in 1995, it was an
observer country, a status given to countries deemed to apply the GATT rules de facto .  The act
establishing the WTO abolished observer status.  Cape Verde's trade policy and instruments are thus
considered on the whole to be in conformity with the WTO's principles and rules.
The principles of free trade, non-discrimination and reciprocity among countries correspond
to the philosophy and position of Cape Verde vis-à-vis  a world in which it wishes to become fully,
effectively and usefully integrated.  For example:
- Domestic taxes, as well as laws, regulations and requirements, do not discriminate in
any way between imported and domestic products nor among supplier countries;
- quantitative restrictions are being drastically reduced and are essentially applied for
balance-of-payments reasons.  They are required because of the overly instable trade
balance, exports only covering around 5 per cent of imports;
- the primary function of customs duties and other customs taxes is as a source of
revenue for the State budget;
- Cape Verde is a State where the rule of Law applies so no measure or decision can be
taken or applied without a legal basis of general application.
5.2 Extent of familiarity with the WTO
In general, in Cape Verde the broad outline of the principles, rules and mechanisms under
which the WTO operates is known.  Certain government officials dealing with trade policies andWT/COMTD/IF/25
Page 21
foreign trade have what might be considered an acceptable level of knowledge, but they have not
completely mastered the functioning and scope of certain provisions and special mechanisms.  If Cape
Verde is to accede to the WTO, it will need special support during the preparation and negotiation
phases.
5.3 Technical assistance needs
5.3.1 Technical assistance as regards trade policy
1. Analyse the impact of indirect economic co ntrol methods and policy measures (exchange,
fiscal, customs tariffs, credit, etc.), general and specific incentives and their effect on the promotion of
production and export.
2. Study and identify products that are currently imported in fairly large numbers but could be
manufactured in Cape Verde making them competitive abroad.  Those with the greatest potential will
be the subject of technical and economic feasibility studies and export market surveys.
3. Update the studies on the general and specific conditions that make Cape Verde attractive to
investment and, where necessary, propose changes to the strategies.  The "advantages" of Cape Verde
will be taken into account, together with the business environment, the institutional capacity of
national public and private organizations specializing in support for enterprises or connected with
such enterprises, the economic infrastructure, et c.  Assess the strong and weak points and make
recommendations.
5.3.2 Technical assistance in the context of the WTO
1. Support Cape Verde in preparing to accede to the WTO and during the accession phase.2. Support Cape Verde in institutional and human resource capacity-building, especially in
relation to trade policy and areas covered by the WTO Agreements.
B. Obstacles to Efforts to Expand Trade
1. Supply constraints
A number of constraints situated at several levels affect production capacity.  The main
obstacles to trade expansion are caused by the following structural problems:
- Because of the small size of the domestic market and the fact that Cape Verde
consists of a number of isolated islands, problems related to economies of scale andinfrastructural costs have an impact on production costs;
- the marked lack of traditional natural resources in the soil and subsoil, very irregular
rainfall and natural soil erosion do not favour the existence of an accessible and
diversified production base;
- the low number of entrepreneurs and the small size of enterprises raise other
problems related to the production of goods and services, of which there is only a
very limited volume and variety.
Certain weaknesses at the level of technological progress, research, a spirit of innovation,
organization and methods are genuine obstacles closely linked to problems in developing human
resources.WT/COMTD/IF/25
Page 22
1.1 Physical infrastructure
Government investment has focused in particular on the economic infrastructure, transport
and communications systems, energy, water and areas possessing an infrastructure, which are vital for
the modernization and external competitiveness of Cape Verde.
1.1.1 Maritime and air transport
Cape Verde's port and airport infrastructure can be deemed acceptable, especially when the
infrastructure and transport programme (PIT) has been completed.  It has two international seaports
and an international airport.  In addition, ports or airports already exist or are being built in all the
islands.  The problem is to modernize port equipment and port operation and management systems.
The action undertaken by the public port management enterprise has not been effective and
operational costs are very high according to exporters and importers.  An institutional reform project
is currently under way, financed by the IDA, in  order to improve port management and in this
connection the privatization of activities - at least in the two international ports - is seen as a way ofimproving the sector's external competitiveness and, in the case of the Port of Mindelo, should
enhance Cape Verde's competitiveness in the regional rivalry to attract "transhipment" operations.
In the area of shipping, the cost of maritime freight is an important obstacle to exports.
Connections are not very reliable, irregular, unpredictable and costly, both for domestic and foreign
freight.  Transporters face problems caused by the small size of companies, the operation of an agingfleet that is not adapted to container transport, inadequate financial capacity, a low volume of out-
bound cargoes - due to the low level of exports - and strong competition from foreign companies.  In
view of these factors, the Shipowners' Association considers that a policy more favourable to the
national fleet should be implemented.  Because this sector is considered to be of strategic importance
for development, the Government would like to develop its natural maritime vocation, while at thesame time ensuring that this sector becomes a factor of competitiveness and not a constraint.
In the area of air transport, the main problem according to exporters is the high cost of freight.
It is also true, however, that exports face an obstacle in reaching the international airport because
domestic air transport does not provide a cargo service.  This situation is particularly acute for exports
of fresh fish, clothing and footwear, which have a guaranteed external market and good prospects for
expansion.
The high cost of both internal and external air transport is an important obstacle to the
development of tourism, one of two sectors - the othe r is fisheries - deemed to be priorities as far as
development prospects are concerned.  It should also be noted that there is no passenger transport
supply adapted to the needs of tourists.
1.1.2 Telecommunications
In recent years, Cape Verde has invested a large amount in the telecommunications sector in
order to link the country to the outside world without any problems.  The adaptation of the most
appropriate technology is under way, taking into account the different needs for the diversification of
services and new communications services.  This sector is one of the most important if Cape Verde is
to play an important role in the global trade economy.  Modernization of the infrastructure is to be
accelerated with the following objectives:
- To complete coverage of Cape Verde by using viable technology and to develop the
capacity to convey a large volume of information;WT/COMTD/IF/25
Page 23
- to diversify the services supply, focusing in particular on value-added services.
It is generally agreed among economic operators that this sector does not present any major
problems for international business activities, with the exception of charges, which are still relativelyhigh.
1.1.3 Water and energy
Drinking water is a rare asset in Cape Verde.  The consumption needs of households and
industry can only be met through desalination by utilizing petroleum by-products to produce water.
Energy is also produced using petroleum by-products .  The high cost of these two production factors
makes the cost of producing goods and services even higher.  There is a vast wind and solar potentialwhich should allow economic use of these forms of energy as the technology is efficient.
Consequently, priority should be given to programmes to promote awareness of these sources of
energy.
1.1.4 Industrial zones
As the development of light industry and specialized services with a high rate of value-added
are essential for the development of a country that has no natural resources, industrial zones, free
zones and exhibition/fair centres of international and regional standing need to be established,
together with the necessary infrastructure.  The lack of this type of infrastructure is considered to be
an important constraint on development of supply.
1.2 Institutional capacity and the business climate
1.2.1 Producers and exporters
As a general rule, producers themselves export their products, which leads to a high degree of
vertical concentration.  Producers face problems due  to the small size of the domestic market, the high
cost of production factors and the lack of competitiveness of their products.  Moreover, they do nothave the means to finance their investment operations because of difficulties in obtaining credit.  One
of the most important constraints on exporters is their lack of knowledge of the operational
mechanisms of export markets and export techniques and operations.  Export credit and credit
insurance do not operate effectively and the exchange risk is either not taken into account or not
controlled.  These factors do not encourage exports, neither does the exchange rate policy governingCape Verde's currency.
1.2.2 Suppliers of services to producers
The first constraint is access to prices and other information on foreign markets.  For
historical and linguistic reasons, Cape Verde's economic agents mainly import from Portugal (40 percent of total imports).  In addition, the lack of trade information does not allow importers to make the
best use of international competition on supply market s.  The possible reorientation of maritime routes
in order to facilitate access to markets which supply raw materials at lower prices is under
consideration.
Quality management:  the importance of quality is not yet sufficiently recognized.  The
Government has taken measures to update the legislation and create the conditions needed to makequality an important factor.  Cape Verde does not have any quality control body.  Some laboratories
exist, but they have not been officially recognized.
Banking and insurance:  for some time the Government has been making great efforts to
modernize these two activities through increased competition at the market level.  Since the sectorWT/COMTD/IF/25
Page 24
opened up to private initiative it has been more dynamic;  nevertheless, there is not a wide range of
services and these mainly focus on the most profitable activities, showing little willingness to take
risks.
Services to producers:  studies show that during the production phase there is little out-
sourcing, which affects the efficiency and quality of the services provided.  For certain services
upstream and downstream of production, for example, marketing, auditing, legal services, dataprocessing, maintenance of equipment, etc., producers call on outside services.  In addition, market
survey and research services are rare or even non-existent in Cape Verde and marketing and
advertising have deficiencies.  Lastly, packaging services are an important constraint.
1.2.3 Public services
Legal and administrative procedures:  the programme to reform public services undoubtedly
shows the Government's strong determination to tack le the current problems related to administrative
procedures so as to take into account the needs of users in general and economic operators inparticular.  Administrative reform also includes the revision of economic and trade legislation, which
has already made significant progress.  Despite these advances, excessive bureaucracy, due to the
mentality and attitude of officials, persists, with some rare exceptions.  This problem is also related to
organizational and working methods and poor management capacity at the intermediate level, which
affect the way officials respond to requests from the public:  complex procedures and a low level ofexecutive capacity.
Efforts to modernize working methods, including computerization of services, have led to a
slight improvement.  If this trend is to be reinforced, further efforts must be made to organize services
better, introduce more efficient working methods, train officials, improve the skills of managers at the
intermediate level, but first and foremost to introduce incentives and more objective ways ofevaluating performance.  Lastly, public services n eed high and medium-level officials with expertise
in certain subjects relating to the implementation of economic and trade policy.
Customs:  the Cape Verde Customs Service no longer constitutes an obstacle to the
development of exports because it has adopted an attitude and acquired knowledge that allow it to
supply services that facilitate export.  The legislation and procedures are clear and provideencouragement.  In addition, exports are exempt from prior authorization and customs duties under
the Law on export incentives, thus providing a framework in which there are no tariff or non-tariff
barriers.
Directorate-General of Tourism, Industry and Trade:  this Directorate-General, which comes
under the Ministry of Economic Coordination, has an important role to play in matters related totourism, industry, domestic and foreign trade, and as the body responsible inter alia  for licensing
activities for which it is responsible and for imports.  Notwithstanding its responsibilities for such
important areas, this Directorate has great need of specialized managers and material resources.
1.2.4 Professional associations
The difficulties faced by professional associations are basically due to the lack of financial
resources, which hinders their capacity for intervention and does not allow them to achieve the
objectives for which they were set up.  These associations await support from the Government andmore effective participation in areas within their competence.  Chambers of Commerce believe that
the Government should give them greater opportunities to generate their own revenue by transferring
to them certain public services related to their activities, which would give them greater capacity for
action.WT/COMTD/IF/25
Page 25
1.2.5 Main obstacles to export diversification
Cape Verde only supplies a limited number of goods and services.  In 1996, two products -
footwear and clothing articles - manufactured with  imported raw materials, accounted for 76 per cent
of exports.  If fisheries products are also included, whether or not processed, the percentage is 99 per
cent.
This situation is due to Cape Verde's economic weakness, due to its lack of natural,
technological and financial resources which, as a whole, are an obstacle to diversifying exports.
The foreign investment process, which has already given good results, could make a greater
contribution to increasing domestic production and consequently to diversifying exports.
Other obstacles to the diversification of exports are the following:
- Production costs that are generally very high, which restricts competitiveness and so
acts as a disincentive to investment in production sectors;
- the possibility of obtaining immediate and substantial profits in the import and
distribution sectors, which means that local businessmen show little interest in
production.  Exchange rate and credit access facilities inter alia  would encourage this
attitude;
- low capacity for innovation on the basis of existing resources which could, with a
little imagination, provide good business opportunities in the domestic market and inspecific sectors of export markets.  There is a broad range of possibilities for new
products which could have guaranteed markets:  the ethnic market.  Together with
other institutions, national bodies specializing in providing enterprises with support
should play an important role in the diversifying exports, starting by identifying
opportunities.
1.3 Problem of investment
1.3.1 Investment and domestic policy
Growth in domestic investment faces the following constraints:  Cape Verde's economic
weakness, the low turnover in enterprises, the reduced level of domestic savings, the deficiencies of
financial institutions with respect to capital and ways of attracting savings, and the nascent financialsystem, which shows little interest in credit for industrial production.
The Government is determined to follow the path of liberalization and diversification of the
financial system.  Commercial activities have been withdrawn from the Bank of Cape Verde, for
example, borrowing and lending have been liberalized and the market has been opened up to new
institutions, thereby creating conditions favourable to increased competition in the banking sector.Legislation on the management of the financial system has been revised in order to provide a illegal
framework for new non-banking institutions, for example, companies dealing with investment,
regional development, leasing, risk capital, and foreign exchange agencies.  New financial
instruments have been put on the market, including treasury bonds and bills.  A stock exchange is
being set up.
Despite the far-reaching reforms implemented, the financial system is still in its early stages,
as can be seen from its lack of diversity and its marked deficiencies as far as the mobilization ofsavings and financing the economy are concerned.WT/COMTD/IF/25
Page 26
The strategic objective of the development of financial instruments and institutions is to
increase the savings mobilization capacity and meet the economy's financing needs, paying particular
attention to dynamic production sectors that are in a position to bring about the sustained growth of
the economy and its external competitiveness.  The requirements in terms of capital and specialized
human resources are, however, enormous.  This is true, for example, for institutions and instruments
specializing in investment in production such as PROMOTORA, the Rural Credit Fund, the TourismDevelopment Fund, the Industrial Development Fund, the Fisheries Development Fund, the
Enterprises Development Programme, the Programme to support initiatives by young entrepreneurs,
etc.
1.3.2 Foreign investment
Because of deficiencies at the domestic level in terms of capital, technology, know-how and
markets, foreign direct investment is of vital importance.  Official development assistance will,
however, still be essential and critical in order to be able to carry out the structural reforms that willhave a marked impact on the development of economic infrastructures deemed to be indispensable for
implementing the only possible strategy for Cape Verde:  dynamic integration in the global economy.
Measures to attract foreign investment are based on a policy facilitating establishment in Cape
Verde, as well as fiscal and customs incentives inter alia .  Assurances regarding investment
guarantees, foreign exchange facilities, and transfer of profits are essential, in addition to a welcoming
environment, social stability and respect for the law and private property.
Some progress has been made in attracting foreign investment, which for the moment focuses
on light industry, tourism and fisheries.  Forecasts show an increase in the volume of foreign
investment, which will continue to focus on the aforementioned sectors and should promote
employment.
As far as specialization is concerned, the economic trend is determined by domestic structural
factors and is based on highly labour-intensive activities and simple tasks, a situation well-adapted to
Cape Verde where there is a large unskilled labour force but a low number of workers capable of
reaching a high level of expertise.  In the long term, this trend should be reversed because Cape
Verde's dynamic integration in the global economy first and foremost necessitates changes in certaindomestic factors so as to adapt them to high value-added forms of specialization and this will have a
noticeable impact on the growth of GDP and the balance-of-payments.
In order to ensure that foreign investment meets the needs self-sustainable economic
development, Cape Verde will have to speed up the development of its economic infrastructure and
human resources.
1.3.3 Elements for negotiation and transfer of technology
Technology is one of the factors on which Cape Verde's development should be based and
this can be seen in various policies.  In assessing foreign investment projects, however, technologydoes not yet play an important role.  For the moment, the aspects of the greatest interest to the
authorities are:  the volume of investment, the number of jobs created, the use and development of
national human resources, the contribution towards expanding exports and the balance-of-payments.
The Centre for the Promotion of Tourism Inve stment and Exports (PROMEX), which in its
few years of existence has already acquired some experience in promoting investment, should pursue
its institutional strengthening and development efforts,  particularly as regards surveys of markets that
are potential sources of foreign investment, ways of attracting investment, and evaluation and follow-
up of projects.  In addition, PROMEX should play a more dynamic role in identifying business
opportunities to be proposed to investors, accompanied by global technical and economic feasibility
studies, focusing on activities that utilize domestic natural resources or have a high value-added.WT/COMTD/IF/25
Page 27
1.4 Supply-related technical assistance needs
1. The low levels of productivity and competitiveness are closely related to management
capacity, especially organizational factors, working methods, and the analysis of production costs.
The establishment and functioning of a Technical Assistance Office within the Enterprise Support and
Development Institute (IADE) is needed as a short-term solution.  This Office would be given a large
measure of technical capacity and its task would be to provide regular technical assistance directly toenterprises by providing job-oriented training.  In this connection, easily understood training manuals
could be prepared.  In addition, special attention should be paid to training high-level staff at the
national level.  This activity could be carried ou t by a strengthened CDI operating within the IADE.
2. Producers and exporters continually raise the problem of access to credit and other financial
services.  Technical assistance should examine the real constraints and make recommendations.  The
aspects to be taken into account include the following:  access to credit in general and special credit
lines, access to national and international support funds, the problem of exchange risks and how toinsure against them, export credit insurance, risk capital, loss reserve funds, leasing, and other
financial services.
3. The ethnic market offers vast possibilities that are not yet being exploited nor evaluated to
assess their real potential.  Cape Verdeans living abroad represent a market of around 600,000,
centred in Europe, the United States of America and some African and Latin American countries.Two approaches could be used to deal with this aspect:
(i) In terms of an export market;
(ii) in terms of large-scale "integration" in the domestic economy, viewed from the angle
of internationalization of Cape Verdean enterprises.
The following should be taken into account when considering the development of traditional
products:
(i) Products that already exist but need to be improved as far as quality standards and
packaging/labelling are concerned;  and
(ii) the potential for "new" products.
With regard to integration in the domestic economy and internationalization of Cape Verdean
enterprises, close links should be established with the emigrant community in general and, more
particularly, with businessmen who live abroad.  One example is the current internationalization of
civil engineering enterprises.  For example, civil engineering enterprises owned by Cape Verdeans
living in Lisbon could give a new dimension to the possibility of internationalization.
Concerning traditional products, technical assistance should take into account the integration
and development of endogenous technology, research and innovation.
4. Analyse the problem of packaging in Cape Verde and propose recommendations.
5. Analyse the problem of quality control and provide technical assistance for the establishment
and functioning of a quality control body.
6. Study the possibilities for new exports in the mining industry and the cultural sector,
including handicrafts.WT/COMTD/IF/25
Page 28
7. Create the right conditions for the development of aquaculture in view of the promising
prospects for mariculture.
8. Identify business opportunities and draw up technical and economic feasibility studies for the
most promising products so as to encourage local and foreign investors.
9. Technical assistance to identify and assess non-conventional technologies (sea, solar, wind) to
be used to produce water and energy at reasonable cost and in larger quantities.
10. Promotion of investment in Cape Verde:  technical assistance needed to promote the Cape
Verde business sector abroad so as to attract foreign investment and develop exports;  support for
institutional development by PROMEX, particularly for surveys of markets that are potential sources
of foreign investment, ways of attracting inve stment, the evaluation and follow-up of projects,
identification of business opportunities to be proposed to investors, accompanied by already-existing
global technical and economic feasibility studies, focusing on activities that utilize domestic resources
or have a high value-added.
11. Provide technical assistance for the preparation and carrying out of training programmes for
exporters in different areas.
2. Trade promotion and trade support services
2.1 Foreign markets
Cape Verde's exports can be placed in two major categories:- Traditional or ethnic products:  fresh or frozen fish, canned fish, bananas, spirits,
biscuits, sugar confectionery, beer, etc.;
- products made by free enterprises:  footwear and clothing, etc.
These two categories of products perform differently on foreign markets.  Whereas the
volume of traditional products exported is low and exports are irregular, the second category plays animportant role because it has a market guaranteed through contracts backed up by parent enterprises
with headquarters abroad.
Cape Verde benefits from advantageous trade preferences for access to several markets.
Nonetheless, its export sector has not known how, or  has been unable, to take advantage of all the
opportunities offered by these preferential mechanisms.
The systematic lack of trade information and the inadequacy, of the financial support
available for promotion are the cause of many export problems.
2.2 Trade promotion and support services
Cape Verde's exports face enormous difficulties in terms of supply, especially because of the
frequent obstacles to access to export support services:  administrative, communications andtelecommunications services, banking services, insurance, promotion abroad, etc.
Public authorities - Despite the reforms under way, the philosophy in public services is not
yet oriented towards exports nor is it underpinned by a system that effectively facilitates procedures
and responds promptly.  The financial resources available to public bodies that provide support at theWT/COMTD/IF/25
Page 29
enterprise level are too limited to allow them to gi ve effective support to the measures needed for an
efficient export sector.
Financial services - Financial institutions and services are also being restructured and
modernized because they do not meet the needs of cu stomers.  Exporters continue to call for speedier
procedures.  In addition, the supply of credit and other financial services for exports is limited and thisoften prevents exporters from accepting orders if investment in production and packaging capacity is
required.
There is no export credit insurance credit scheme specially designed to meet the risks
involved in international payments.
Communication and telecommunications - both internal and international maritime and air
transport continue to be a serious obstacle to exports.  Internal and international maritime freight is
expensive, services are very irregular and there is little diversification.  Air transport between islands
is not only extremely expensive but also makes it difficult to send products to the international airporton Sal Island.  International air freight is costly and, with the exception of certain European cities, the
service is irregular.
According to exporters, telecommunications do not now constitute a significant obstacle to
international business.  Nevertheless, new means of communication are not widely used.
Promotion abroad - Trade promotion bodies (PROMEX, Chambers of Commerce,
Directorate-General of Tourism, Industry and Tr ade) do not have short or medium-term export
marketing plans to give them the strategic and tact ical guidance needed to obtain and keep market
shares abroad, especially on non-traditional markets.  Promotion abroad frequently depends on
foreign financial support and, where this exists, the amounts available are not enough to provide
exporters with direct support or to set up appropriate means of communication that can guarantee
visibility and credibility.  Direct support to exporters for promotion and for the collection ofinformation on markets and customers is not very common.
In general, therefore, exporters lack information, both as regards imports and exports, and
there is no financial support or other facilities for foreign trade promotion, which means that they are
restricted to traditional markets and buyers.  The greatest difficulty facing exporters, however, isignorance of international trade techniques and operations, quality standards and presentation (design,
labelling, packaging), because there are no ente rprises specializing in supplying these services.
In the past, Cape Verde's foreign policy did not support action by its diplomats in economic or
trade matters.  Although there has been a positive step forward following the firm declaration by the
Cape Verde Government in favour of economic dipl omacy, diplomatic structures have to be adapted
to the new strategy.  The capacity and performance of diplomatic missions will have to be
strengthened, focusing on the physical (image, credibility), operational (leadership, efficiency,
opportunity) aspects but above all on personnel (professionalism, credibility, reliability).
Another factor is the inadequacy of national bodies providing support at the enterprise level,
which lack specialized knowledge of trade promoti on and support.  The support organizations as a
whole do not have international trade experts so there is a need for ongoing specialized training.
2.3 Trade information
The trend towards an information society does not only concern developed or emerging
economies, but also economies such as that of Cape Verde, which is in the process of opening up
towards the outside.WT/COMTD/IF/25
Page 30
The importance of information as an essential tool for trade promotion and market access is
recognized, whether it is concrete information on business opportunities bringing together supply and
demand, or information and surveys of products, sectors, countries and markets that allow enterprises
and promotion bodies to draw up their export and marketing strategies in a rational way.
It is also acknowledged, however, that despite the efforts and resources devoted to the
programmes and bodies supporting the export sector Cape Verdean entrepreneurs continue to facedifficulties in obtaining trade information, in particular:
Information on market conditions - Neither enterprises nor public or private entities possess
the technical capacity to collect, process, classify and disclose in a proactive and timely manner
information essential for determining whether Cape Verde's exports respond to the needs and wishes
of consumers in the market segments targeted or whether they need to be adapted.
Information on suppliers - The Enterprise Development Forum, held in Praia in
September 1995, highlighted the need to diversify traditional sources of supply, especially for raw
materials.  Taking into account the importance of export-oriented industries for Cape Verde's
integration into the global economy, the Forum concluded that action should be taken to reorient the
import sector towards countries supplying raw materials and capital and consumer goods at
competitive prices and that consequently particular attention should be paid to Brazil, Argentina,
Uruguay and South Africa.  Regular and orderly information on alternative sources of supply of rawmaterials is one obvious need.
Database - No institution in Cape Verde has a properly functioning trade information database
to serve entrepreneurs.  Moreover, the national in stitutions promoting and supporting entrepreneurs
have not derived the maximum advantage from databases abroad, including those compiled by
international organizations such as the ICC or the WTO.
Except in rare instances, the various attempts by support organizations to compile databases
have not been successful because they were one-off efforts that were not harmonized and they focused
on domestic aspects.  In other instances, there has been duplication and proliferation of efforts without
any sense of the fundamental guiding objective:  a database to serve economic agents.
Internet - The development of Internet services represents a real opportunity to integrate local
enterprises in global information exchange networks.  Cape Verde has started to take the first steps in
popularizing use of the Internet to obtain economic information in the broadest sense.  Only a few
exporters at the national level have access to the Internet or the prospect of access in the near future
for financial reasons.  Public and private support organizations will therefore have the responsibility
of obtaining information of interest and disclosing it where necessary.  The majority of operators arenot yet aware of the possibilities and advantages of the Internet.
Multilateral and regional agreements - In most cases, the terms of these agreements are
complex and it is therefore difficult for those involved to understand them or follow them up.  In
many cases, the information is available in languages that are not familiar to exporters;  the
information is scattered and few officials have the ability to utilize it.
2.4 Technical assistance needs in the area of trade promotion and trade support services
1. Support for drawing-up strategic plans to promote exports, taking into account the strengths
and weaknesses of export products in particular and the current and potential opportunities on the
most promising markets.WT/COMTD/IF/25
Page 31
2. Review of the nature and operation of trade support organizations (PROMEX, Chambers of
Commerce, IADE), as well as policies, promotion and support tools and measures.
3. Allocation of resources to public bodies and trade associations to allow them to strengthen
relations with the private sector by improving communication.  Reinforce professional organizations
and Chambers of Commerce to allow them to play their role properly and offer valuable services to
enterprises.
4. Bearing in mind that the Lomé Convention recognizes the importance of foreign direct
investment for the growth and competitiveness of the economies of ACP countries, the EU could
finance the investment promotion measures taken by the Government, including partnership forums to
inform potential foreign investors of the possibilities and the fostering of partnerships with domestic
producers.
5. Marketing plan - Support for the elaboration of a short/medium-term marketing plan for
exports, taking into account the strengths, weaknesses, threats and possibilities for specific markets tobe identified.
6. Product promotion programme - To complement the marketing plan mentioned above, an
integrated and ongoing programme to promote expo rts should be designed and implemented with the
support of Cape Verde's international partners.
7. Trade information service - After the information needs of exporters have been identified,
technical assistance could set up this service.  Some measures have already been taken under previous
technical assistance projects, but the trade info rmation structures already existing in the export
promotion organization and Chambers of Commerce ne ed to completed and made operational.  The
need for specialized databases should be taken into account.
8. Feasibility study on the creation of an international trade enterprise with sufficient
commercial and marketing capacity to ensure the sale abroad of national traditional products.
9. Export of services - Training seminars on this theme for public and private organizations:
how to take advantage of the marketing and export opportunities opened up by the global
liberalization of trade in services (engineering, telecommunications, tourism, etc.).
3. Market access
For historical reasons, the natural market for Cape Verde's products is the European Union.
But whatever the geographical destination of exports, obstacles to access abroad are virtually the
same, with the exception of products from free enterprises.
Cape Verde benefits from advantageous trade preferences for access to several foreign
markets under the ECOWAS Treaty, the Lomé Convention and the Generalized Systems ofPreferences (SGP).  These agreements are of great value not only because of the actual concessions
but also as regards their basic principles.  Noneth eless, its export sector has not known how, or has
been unable, to take advantage of all the opportunities offered by these special mechanisms to
facilitate market access.
3.1 European Union
Export trade between Cape Verde and the European Union comes under two preferential
regimes:
- Lomé IV Convention, which allows Cape Verde's products to enter the EU duty free
(provided that the rules of origin are respected) and exempts Cape Verde from quotas;WT/COMTD/IF/25
Page 32
- Generalized System of Preferences, which is utilized less by exporters because it is
not so favourable.  It mainly concerns finished and semi-finished industrial products
and gives marginal treatment to agricultural products, making them subject to
quantitative restrictions.
Despite the market access facilities available under these programmes, exports to the
European Union mainly consist of clothing articles, footwear and fisheries products.
As far as clothing is concerned, there are few external access difficulties because, as has
already been mentioned, the manufacturers occupy the markets and have well-established channels of
distribution. The majority of other products continue to face problems in exporting to the EU becauseof internal and external constraints:
Non-tariff barriers - Access to international markets has become increasingly complex and
more and more depends on considerations other than tariffs.
For ACP countries, experience has shown that, co ntrary to the principles of liberalization and
easier procedures proclaimed within the legal framework of ACP/EU trade, countries of the Union
have different technical and administrative requirements, which makes it difficult to adapt ACPproducts to these criteria, particularly Cape Verde's products.  It is therefore necessary to adopt
practical mechanisms to facilitate access to the Union's markets and to simplify the procedures and
rules seen as an obstacle to the development of exports from ACP countries.
Technical standards - With a few rare exceptions, Cape Verde's traditional products find it
difficult to meet technical standards for access to the European Union market, in particular those on
packaging, labelling, quality certification.
Languages - The language difference is another constraint.  The majority of Cape Verde's
exporters do not speak French or English and naturally tend to seek their markets in Portugal.
Promotion - Like the promotion organizations  and Chambers of Commerce, exporters have
few financial resources to implement marketing a nd promotion plans in European markets receiving
Cape Verdean products.
Marketing principles and culture - Exporters are not used to visualizing the medium and long-
term business situation, which necessitates the establishment of stable relations with importers and
agents able to guarantee permanent representation and active promotion of sales and services to
clients in the key markets targeted.
Prices - With some rare exceptions, (possibly fisheries products), the vast majority of
Cape Verde's products are not very competitive at the price level in comparison with their
competitors.
Products - The few natural resources and the low production capacity are undoubtedly factors
which determine exports, characterized by irregularity and low volume.  In addition, Cape Verde does
not yet have a packaging or labelling industry, wh ich diminishes the competitiveness of its products.
Distribution - Domestic exporters do not have a volume of production that justifies opening
commercial agencies in export markets or employin g consultants or distribution agents.  Distribution
is therefore wholly in the hands of the foreign importer.
Competition capacity - The emergence of the free market in Eastern Europe, open to
investment and trade with Western Europe, will be a source of competitive pressure for Cape Verde's
products.WT/COMTD/IF/25
Page 33
3.2 United States of America
The major obstacles mentioned above, which make it difficult for Cape Verdean products to
enter European Union markets, also apply to the United States of America.  Cape Verde's exports are
given preferential access under the Generalized System of Preferences (SGP) according to a list of
products exempt from duty.  This list includes most manufactured and semi-manufactured products
and certain agricultural products, fisheries products and primary commodities.  Cape Verde also has aslight comparative advantage because it is not subject to export quotas in the United States.
At the moment, Cape Verdean products cannot be found directly nor regularly in the United
States market despite the access facilities granted under the GSP.  Specific market access difficulties
concern the following two sectors:
(i) Clothing and footwear;  and
(ii) traditional products, termed ethnic products.
The main difficulty in exporting clothing and footwear to the United States (although this also
applies to other products) is the question of image.  A study carried out by The Services Group Inc.
shows that the vast majority of American companies do not like doing business with African
companies.  The study also notes that, in the clothing sector, it is unlikely that Cape Verde will be
able to compete on price with Asian suppliers because of the differences in transport and salary costs.
Moreover, it adds that Cape Verde is competing at  a disadvantage in the American market because of
its geography and the fact that it does not have the same free access to the market as Mexico
(NAFTA) and the Caribbean Basin.
The obstacles to access are the same for ethnic products.  According to the aforementioned
study, these could be successful on the ethnic Cape Verdean-American market in the United States,
especially foodstuffs (fresh and canned tuna), beverages (spirits and cherry liqueur) and specialarticles (biscuits, tuna pâté, sugar confectionery).  With the exception of fresh tuna and spirits, the
other ethnic products currently suffer a disadvantage in comparison with Asian-American and
Mexican-American products, which already benefit from solid marketing structures and are known on
the American market, so they have become integrated.
These ethnic products are today facing the following difficulties in penetrating the ethnic
Cape Verdean-American market and maintaining market share:
- Promotion - Promotion activities by Cape Verdean exporters are very basic and
mainly consist of occasional contacts with economic operators in the region of New
England.
- Products - These products do not at present meet the criteria of the market nor
commercial standards in the United States with regard to the size and design of
packaging, labelling, and in certain cases the content.
- Transport - As long as there is no regular or reliable transport, it will not be possible
to maintain customer loyalty in this market , which is an important factor in winning
and keeping customers.
3.3 ECOWAS
Cape Verde's export trade with ECOWAS member countries comes under the ECOWAS
Treaty.  The Cape Verde Government believes that integration into the regional economic area is ofWT/COMTD/IF/25
Page 34
vital importance for the country.  Cape Verde has the potential to penetr ate ECOWAS markets with
ethnic and pharmaceutical products, footwear, paint and salt.  It is nevertheless recognized that there
are ongoing serious problems in the trade liberalization process and in the system of payments, which
dissuades exporters from showing an interest in this market.  Furthermore, there are other access
difficulties such as the following:
- One fundamental obstacle is the scepticism shown by most exporters towards this
market because of the unsuccessful efforts made over the years;
- the unreliability of transport and communications systems, which hinders the
movement of persons, goods and capital;
- tariff obstacles, including failure to apply in practice the provisions of the ECOWAS
Treaty on the reduction and gradual elimination of customs duties;
- non-tariff difficulties due to the excessively bureaucratic administrative procedures
that hamper access to the market;
- information on market opportunities is difficult to obtain.  Due to this lack of
information, it is widely believed that the potential of this regional market is
insignificant.  In order to overcome this problem in part, Cape Verde must make the
best use of the "Trade Opportunities Management Software" (ECOTOPS), designed
by the ICC for the member States of ECOWAS.  According to information available,this software has been installed in the ECOWAS computer centre in Lomé since
March 1997.  In order to allow exporters to access this service, however, the ICC
could make the relevant users' handbook's available to Chambers of Commerce in
Cape Verde so that they could inform businessmen.
3.4 Technical assistance needs as regards market access
1. Multilateral agreements - Preparation and holding of workshops or technical seminars,
elaboration of summaries for public bodies and businessmen on:
(i) The commercial implications of the European market for the access of agricultural,
industrial and fisheries products from Cape Verde;
(ii) the WTO and the Uruguay Round Agreemen ts;  ECOWAS;  the GSP in major export
markets, from the objective perspective of Cape Verde's export possibilities.
2. Market access offices - Establishment and functioning of a market access office (within the
Directorate-General of Tourism, Industry and Trade) and building the capacity of its managerial staff.
Within the framework of this structure:  build ing the capacity of exporters by elaborating and
implementing an ongoing integrated training programme on access to foreign markets.  All trainingactivities should be complemented by practical users' handbooks for exporters for regular
consultation.
III. TECHNICAL ASSISTANCE NEEDS
A. Technical Assistance as Regards Trade Policy
1. Analyse the impact of indirect economic co ntrol methods and policy measures (exchange,
fiscal, customs tariffs, credit, etc.), general and specific incentives for their effect on the promotion of
production and export.WT/COMTD/IF/25
Page 35
2. Study and identify products that are currently imported in fairly large quantities but could be
manufactured in Cape Verde making them competitive abroad.  Those with the greatest potential will
be the subject of technical and economic feasibility studies and export market surveys.
3. Update the studies on the general and specific conditions that make Cape Verde attractive to
investment and, where necessary, propose changes to the strategies.  The "advantages" of Cape Verde
will be taken into account, together with the business environment, the institutional capacity of
national, public and private organizations specializing in support for enterprises or connected with
such enterprises, the economic infrastructure, et c.  Assess the strong and weak points and make
recommendations.
B. Technical Assistance in the Context of the WTO
1. Support Cape Verde in preparing to accede to the WTO and during the accession phase.2. Support Cape Verde in institutional and human resource capacity-building, especially in
relation to trade policy and areas covered by the WTO Agreements.
C. Technical Assistance with Respect to Supply
1. The low levels of productivity and competitiveness are closely related to management
capacity, especially organizational factors, working methods, and the analysis of production costs.
The establishment and functioning of a Technical Assistance Office within the Enterprise Support and
Development Institute (IADE) is needed as a short-term solution.  This Office would be given a largemeasure of technical capacity and its task would be to provide regular technical assistance directly to
enterprises by providing job-oriented training.  In this connection, easily understood training manuals
could be prepared.  In addition, special attention should be paid to training high-level staff at the
national level.  This activity could be carried ou t by a strengthened CDI operating within the IADE.
2. Producers and exporters continually raise the problem of access to credit and other financial
services.  Technical assistance should examine the real constraints and make recommendations.  The
aspects to be taken into account include the following:  access to credit in general and special credit
lines, access to national and international support funds, the problem of exchange risks and how to
insure against them, export credit insurance, risk capital, loss reserve funds, leasing, and other
financial services.
3. The ethnic market offers vast possibilities that are not yet being exploited nor evaluated to
assess their real potential.  Cape Verdeans living abroad represent a market of around 600,000,
centred in Europe, the United States of America and some African and Latin American countries.
Two approaches could be used to deal with this aspect:
(i) In terms of an export market;(ii) in terms of large-scale "integration" in the domestic economy, viewed from the angle
of internationalization of Cape Verdean enterprises.
The following should be taken into account when considering the development of traditional
products:
(i) Products that already exist but need to be improved as far as quality standards and
packaging/labelling are concerned;  and
(ii) the potential for "new" products.WT/COMTD/IF/25
Page 36
With regard to integration in the domestic economy and internationalization of Cape Verdean
enterprises, close links should be established with the emigrant community in general and, more
particularly, with businessmen who live abroad.  One example is the current internationalization of
civil engineering enterprises.  For example, civil engineering enterprises owned by Cape Verdeans
living in Lisbon could give a new dimension to the possibility of internationalization.
Concerning traditional products, technical assistance should take into account the integration
and development of endogenous technology, research and innovation.
4. Study the problem of packaging in Cape Verde and make recommendations.
5. Study the problem of quality control and provide technical assistance for the establishment
and functioning of a quality control body.
6. Study the possibilities for new exports in the mining industry and the cultural sector,
including handicrafts.
7. Create the right conditions for the development of aquaculture in view of the promising
prospects for mariculture.
8. Identify business opportunities and draw up technical and economic feasibility studies for the
most promising products so as to encourage local and foreign investors.
9. Technical assistance to identify and assess non-conventional technologies (sea, solar, wind) to
be used to produce water and energy at reasonable cost and in larger quantities.
10. Promotion of investment in Cape Verde:  technical assistance needed to promote the Cape
Verde business sector abroad so as to attract foreign investment and develop exports;  support for
institutional development by PROMEX, particularly for surveys of markets that are potential sources
of foreign investment, ways of attracting inve stment, the evaluation and follow-up of projects,
identification of business opportunities to be proposed to investors, accompanied by already-existingglobal technical and economic feasibility studies, focusing on activities that utilize domestic resources
or have a high value-added.
11. Provide technical assistance for the preparation and carrying out of training programmes for
exporters in different areas.
D. Technical Assistance in the Area of Trade Promotion and Trade Support Services
1. Support for drawing up strategic plans to promote exports, taking into account the strengths
and weaknesses of export products in particular and the current and potential opportunities on the
most promising markets.
2. Review of the nature and operation of trade support organizations (PROMEX, Chambers of
Commerce, IADE), as well as policies, a nd promotion and support tools and measures.
3. Allocation of resources to public bodies and trade associations to allow them to strengthen
relations with the private sector by improving communication.  Reinforce professional organizations
and Chambers of Commerce to allow them to play their role properly and offer valuable services to
enterprises.WT/COMTD/IF/25
Page 37
4. Bearing in mind that the Lomé Convention recognizes the importance of foreign direct
investment for the growth and competitiveness of the economies of ACP countries, the EU could
finance the investment promotion measures taken by the Government, including partnership forums to
inform  potential foreign investors of the possibilities and the fostering of partnerships with domestic
producers.
5. Marketing plan - Support for the elaboration of a short/medium-term marketing plan for
exports, taking into account the strengths, weaknesses, threats and possibilities for specific markets to
be identified.
6. Product promotion programme - To complement the marketing plan mentioned above, an
integrated and ongoing programme to promote expo rts should be designed and implemented with the
support of Cape Verde's international partners.
7. Trade information service - After the information needs of exporters have been identified,
technical assistance could set up this service.  Some measures have already been taken under previoustechnical assistance projects, but the trade info rmation structures already existing in the export
promotion organization and Chambers of Commerce ne ed to completed and made operational.  The
need for specialized databases should be taken into account.
8. Feasibility study on the creation of an international trade enterprise with sufficient
commercial and marketing capacity to ensure the sale abroad of national traditional products.
9. Export of services - training seminars on this theme for public and private organizations:  how
to take advantage of the marketing and export oppo rtunities opened up by the global liberalization of
trade in services (engineering, telecommunications, tourism, etc.).
E. Technical Assistance as Regards Market Access
1. Multilateral agreements - Preparation and holding of workshops or technical seminars,
elaboration of summaries for public bodies and businessmen on:
(i) The commercial implications of the European market for the access of agricultural,
industrial and fisheries products from Cape Verde;
(ii) the WTO and the Uruguay Round Agreemen ts;  ECOWAS;  the GSP in major export
markets, from the objective perspective of Cape Verde's export possibilities.
2. Market access offices - Establishment and functioning of a market access office (within the
Directorate-General of Tourism, Industry and Trade) and building the capacity of its managerial staff.
Within the framework of this structure:  build ing the capacity of exporters by elaborating and
implementing an ongoing integrated training programme on access to foreign markets.  All training
activities should be complemented by practical users' handbooks for exporters for regularconsultation.WT/COMTD/IF/25
Page 38
ANNEX
Imports by Group of Products
(In C.V. Esc. millions)
Group of products 1991 1996
Value % Value %
Live animals and animal products405.00 3.80 837.93 4.33
Vegetable products892.00 8.50 1,801.47 9.32
Fats and oils383.00 3.60 925.85 4.79
Prepared foodstuffs and beverages1,283.00 12.20 2,662.22 13.77
Mineral products1,349.00 12.80 2,305.24 11.92
Chemicals561.00 5.30 978.22 5.06
Plastics and rubber414.00 3.90 727.02 3.76
Raw hides and skins and articles thereof21.00 0.20 37.03 0.19
Wood articles304.00 2.90 519.25 2.69
Raw materials for manufacturing paper223.00 2.10 389.28 2.01
Textiles and textile articles261.00 2.40 428.79 2.22
Footwear69.00 0.59 136.75 0.70
Stone and glassware255.00 2.40 508.43 2.63
Metal and metal articles857.00 8.10 1,557.56 8.06
Electrical machinery and equipment1,682.00 16.10 3,198.93 16.54
Transport equipment1,186.00 11.30 1,600.50 8.27
Other323.00 3.00 720.93 3.73
TOTAL IMPORTS c.i.f.10,468.00 100.00 19,335.40 100.00
Food products2,963.00 28.31 6,227.47 32.21
Petroleum products563.00 5.38 768.59 3.98
Other products6,942.00 66.32 12,339.33 63.82
TOTAL IMPORTS f.o.b. (BCV)9,136.25 16,986.14
Source:  DGE/BCV.WT/COMTD/IF/25
Page 39
Exports by Type of Product in 1996
(In C.V. Esc. millions)
Type of product Value Percentage
productCumulative
percentage
Footwear and its components593.43 57.14 57.14
Clothing196.60 18.93 76.07
Fisheries products, not processed173.30 16.69 92.76
Fisheries products, processed65.40 6.30 99.06
Raw hides and skins3.70 0.36 99.42
Biscuits1.40 0.13 99.55
Chemicals, n.e. 1.40 0.13 99.69
Spirits1.10 0.11 99.79
Fish oil0.78 0.08 99.87
Plants for planting0.55 0.05 99.92
Medicines0.50 0.05 99.97
Other0.34 0.03 100.00
TOTAL EXPORTS1,038.50 100.00 -WT/COMTD/IF/25
Page 40
INTEGRATED RESPONSES BY THE WORLD BANK, ITC,
UNCTAD, IMF, WTO AND UNDP
CAPE-VERDE1
Technical assistance needs identified in
the questionnaireOrganization Response
In reply to question A(k):
Technical assistance requirements as
regards compliance with WTO
Agreements
Support in preparing accession to the
WTO and during the accession phaseWTO Technical assistance will be provided to
Cape Verde on request during the
accession process.
UNCTAD/UNDPUnder its regional  trade development
programme for Africa (RAF/96/001),
advisory assistance could be given to the
authorities during the preparation of
accession.
                                                     
1 It should be noted that the UN Department of Economic and Social Affairs (DESA) has decided, in
collaboration with UNDP, to call a meeting of representatives of Small Island Developing States (SIDSs) withprospective donors.  "To improve the likelihood that such a meeting would result in tangible outcomes, the
SIDSs have been requested to prep are a portfolio of documents on priority projects ... that cannot be
implemented without the support of external resources beyond those currently envisaged."  (UNGAdocument A/52/319, paragraphs (i) to 10.)  The General Assembly welcomed "the need for further collaborationamongst SIDSs and agencies funds and programmes of the UN system to facilitate the preparation of projectportfolios".  (UNGA RES/52/202).
     For SIDSs which are LDCs, it would be desirable to ensure consistency between the above process
and the Integrated Framework process.WT/COMTD/IF/25
Page 41
Technical assistance needs identified in
the questionnaireOrganization Response
In reply to question A(1):
Technical assistance requirements as
regards specific WTO Agreements
Institutional and human resources
capacity-building, especially as
regards trade policy and areas related
to the new WTO Agreements.UNCTAD Training activities on trade policy and the
new multilateral trade framework could be
organized, including courses on
international trade diplomacy.*
WTO A national seminar will be organized
in 1999.
Participation by Cape Verde
representatives in the specialized seminars
organized in 1998 and 1999 for least-developed French-speaking countries.
A three-week trade policy course will be
organized in 1998 and 1999 for
least-developed French-speaking countries.
It will include simulation exercises onmultilateral trade negotiations.
                                                     
* Financing to be requestedWT/COMTD/IF/25
Page 42
Technical assistance needs identified in
the questionnaireOrganization Response
In reply to question A(m):
Assessment of the existing trade
analysis and negotiating capacities
1. Need for technical assistance to
analyse the impact of indirect economic
control methods and policy measures
(exchange, fiscal, customs tariffs,
credit, etc.), general and specific
incentives and their effect on thepromotion of production and exports.World Bank Under the recently completed technical
assistance, studies have been undertaken
covering some of the identified areas.
Clarification is needed from the
Government on any follow-up required.
2. Need for technical assistance to
study and identify products that are
currently imported in fairly large
quantities but could be manufactured in
Cape Verde making them competitive
abroad.  Those with the greatestpotential will be the subject of technical
and economic feasibility studies and
export market surveys.UNDP Under regional project RAF/96/001 the
UNDP could finance part of this request.
Additional financing required.
World Bank Under the recently completed technical
assistance, studies have been undertaken
covering some of the identified areas.
Clarification is needed from the
Government on any follow-up required.
3. Need for technical assistance toupdate the studies on the general and
specific conditions that makeCape Verde attractive to investment
and, where necessary, propose changes
to the strategies.  The "advantages" of
Cape Verde will be taken into account,
together with the business environment,the institutional capacity of national
public and private organizations
specializing in support for enterprises
or connected with such enterprises, the
economic infrastructure, etc.  Assess
the strong and weak points and make
recommendations.UNCTAD The domestic investment policy could be
reviewed.
*
Maritime transport:  training activities
could be organized under the TRAINMAR
programme.*
                                                     
* Financing to be requested.WT/COMTD/IF/25
Page 43
Technical assistance needs identified in
the questionnaireOrganization Response
Question A(m) (cont'd):
World Bank Technical assistance provided under
Capacity Building for Private Sector
Promotion (CBPSP) Project, in particularthrough the support to PROMEX
(government agency for promotion of
foreign investment and exports).
ESW (Economic & Sector Work) in FY 99
will focus on a study of sources of growthwith emphasis on exporting potential.WT/COMTD/IF/25
Page 44
Technical assistance needs identified in
the questionnaireOrganization Response
In reply to question B(g):
Technical assistance needs with respect
to supply constraints
1. The establishment and
functioning of a Technical Assistance
Office within the Enterprise Supportand Development Institute (IADE) is
needed as a short-term solution to raise
the low levels of production and
competitiveness.  This Office would be
given a large measure of technicalcapacity and its task would be to
provide regular technical assistance
directly to enterprises by providing job-
oriented training.  In this connection,
easily understood training manuals
could be prepared.  In addition, special
attention should be paid to traininghigh-level staff at the national level.
This activity could be carried out by a
strengthened CDE operating within the
IADE.
2. Analysis of the real constraintson access to credit leading to
recommendations.  The aspects to be
taken into account include the
following:  access to credit in generaland special credit lines, access to
national and international support
funds, the problem of exchange risks
and how to insure against them, export
credit insurance.World Bank Partly covered by technical assistance
provided under the Capacity Building for
Private Sector Promotion credit, and will
be further supported by TA for Capacity
Building under the envisaged Social SectorProject (FY2000)WT/COMTD/IF/25
Page 45
Technical assistance needs identified in
the questionnaireOrganization Response
Question B(g) (cont'd)
3. The ethnic market offers vast
possibilities that are not yet being
exploited nor evaluated to assess their
real potential:
(i) Identification of export markets
and terms of access thereto;
(ii) development of Cape Verde's
industry with a view to its
internationalization.
Traditional products:(i) Products that already exist but
need to be improved as far as
quality standards and packaging-
labelling are concerned;  and
(ii) a survey to determine the
potential for "new" products.
Technical assistance will take into
account the integration and
development of endogenous
technology, research and innovation.
Regarding integration in the domestic
economy and internationalization ofCape Verdean enterprises, close links
should be established with the emigrant
community in general and, more
particularly, with businessmen who live
abroad.ICC See B(q)6.
World Bank See A(m)
(ESW study on the sources of growth).
4. Study the problem of packagingin Cape Verde and make
recommendations.WT/COMTD/IF/25
Page 46
Technical assistance needs identified in
the questionnaireOrganization Response
Question B(g) (cont'd)
5. Analyse the problem of quality
control and provide technical assistancefor the establishment and functioning of
a quality control body.UNDP
(WIPO)Consider holding a sub-regional seminar in
which three Cape Verde officials would
take part.
UNDP could finance a consultant to
undertake a study.
6. Study the possibilities for newexports in the mining industry and the
cultural sector, including handicrafts. World Bank See 3 above.
7. Create the right conditions for
the development of aquaculture in viewof the promising prospects for
mariculture.
8. Project to identify businessopportunities and draw up technical and
economic feasibility studies for the
most promising products so as to
encourage local and foreign investors.World Bank See 3 above.
9. Technical assistance to identify
and assess non-conventionaltechnologies (sea, solar, wind) to be
used to produce water and energy at
reasonable cost and in larger quantities.World Bank Technical assistance envisaged under a
proposed IDA credit for Water and Energyproject (FY 98).WT/COMTD/IF/25
Page 47
Technical assistance needs identified in
the questionnaireOrganization Response
Question B(g) (cont'd)
10. Promotion of investment in Cape
Verde:  technical assistance needed to
promote the Cape Verde business sector
abroad so as to attract foreign
investment and develop exports,support for institutional development
by PROMEX, particularly for surveys
of markets that are potential sources of
foreign investment, ways of attracting
investment, the evaluation and follow-up of projects;  identification of
business opportunities to be proposed to
investors, accompanied by already-
existing global technical and economic
feasibility studies, focusing on activities
that utilize domestic resources or have a
high value-added.UNCTAD See A(m)3.
World Bank See A(m)3.
11. Provide technical assistance for
the preparation and carrying out oftraining programmes for exporters in
different areas.ICC/
UNCTAD/UNDPThe strengthening of institutions for
training in international trade is includedunder the joint regional
ICC/UNCTAD/UNDP project "capacity
building for trade and development in
Africa.
World Bank See A(m) 3.WT/COMTD/IF/25
Page 48
Technical assistance needs identified in
the questionnaireOrganization Response
In reply to question B(q):
Technical assistance needs in the area
of trade promotion and support services
1. Support for drawing up strategic
plans to promote exports, taking into
account the strengths and weaknessesof export products in particular and the
current and potential opportunities on
the most promising markets.ICC/UNDP The ICC is ready to assist the Government
in drawing up a strategy to develop
exports.  Relevant consultations will beorganized at the beginning of 1998.
World Bank See A(m)3 for Capacity Building for
Private Sector Promotion (CBPSP) Project
and (Economic & Sector Work) ESWstudy on sources of growth (FY 99).
2. Review of the nature and
operation of trade support organizations
(PROMEX, Chambers of Commerce,IADE), as well as policies and
promotion and support tools and
measures.World Bank See A(m)3 for Capacity Building for
Private Sector  Promotion (CBPSP)
Project.
3. Allocation of resources to publicbodies and trade associations to allow
them to strengthen relations with the
private sector by improving
communication.   Reinforce
professional organizations andChambers of Commerce to allow them
to play their role properly and offer
valuable services to enterprises.World BankSee A(m)3 for Capacity Building for
Private Sector Promotion (CBPSP) Project.WT/COMTD/IF/25
Page 49
Technical assistance needs identified in
the questionnaireOrganization Response
Question B(q) (cont'd):
4. Bearing in mind that the
Lomé Convention recognizes theimportance of foreign direct investment
for the growth and competitiveness of
the economies of ACP countries, the
European Union could finance the
investment promotion measures taken
by the Government, including
partnership forums to inform potentialforeign investors of the possibilities and
the fostering of partnerships with
domestic producers.
5. Marketing plan - support for theelaboration of a short/medium-termmarketing plan for exports.  The Plan
will take into account the strengths,
weaknesses, threats and possibilities for
specific markets to be defined.
6. Product promotion programme - to complement the marketing plan
mentioned above, an integrated and on-going programme to  promote exports
should be designed and implemented
with the support of Cape Verde's
international partners.ICC The promotion programme could be
discussed when elaborating the strategy
mentioned under B(q)1.
7. Trade information service -
based on identification of the
information needs expressed by
exporters, technical assistance could set
up such a service.  Some measures havealready been taken under previous
technical assistance projects, but the
trade information structures already
existing in the export promotion
organization and Chambers ofCommerce need to be completed and
made operational.  The need for
specialized databases should  be taken
into account.ICC The JURIS database on the legal aspects of
international trade and the TOPS database
on business opportunities for ECOWAS
member countries will be made available
to the Ministry of Trade.
World BankPartially covered under the support to
PROMEX through the CBPSP project.
See A(m)3.WT/COMTD/IF/25
Page 50
Technical assistance needs identified in
the questionnaireOrganization Response
Question B(q) cont'd:
ICC/
UNCTADA Trade Point is being set up (Directorate
General of Trade).  Specific tradeinformation support services will be
provided by the ICC under its Trade Points
Project.   Infrastructure is not sufficient for
connection to the network.
*
The TRAINS (CD-ROM) database oninternational trade will continue to be
supplied.
8. Feasibility study on the creationof an international trade enterprise withsufficient commercial and marketing
capacity to ensure the sale abroad of
national traditional products.
9. Export of services – trainingseminars on this theme for public andprivate organizations:  how to take
advantage of the marketing and export
opportunities opened up by the global
liberalization of trade in services
(engineering, telecommunications,
tourism, etc.).World Bank See A(m)3 - Capacity Building for Private
Sector Promotion Project (CBPSP).
UNCTAD/
UNDPTraining seminars on the importance of
trade in services in the globalization
context and the possible strategies fordeveloping the services sector could be
organized.
*Financing to be requested.WT/COMTD/IF/25
Page 51
Technical assistance needs identified in
the questionnaireOrganization Response
In reply to question B(v):
Technical assistance needs as regards
market access
1. Multilateral agreements -
preparation and holding of workshops
or technical seminars, elaboration of
summaries for public bodies and
businessmen on (i) the commercial
implications of the European Marketfor the access of agricultural, industrial
and fisheries products from Cape
Verde;  (ii) the WTO and the Uruguay
Round Agreements, ECOWAS;  the
GSP in major export markets, from theobjective perspective of Cape Verde's
export possibilities.UNCTAD/
UNDPUnder the RAF/96/001 project, training
activities and promotion of awareness
regarding the major questions of interest to
Cape Verde as regards access to regional
and international markets will be organized
at the sub-regional level.  Officials fromCape Verde may participate.
WTO See A(1).
2. Market Access Offices -
establishment and functioning of a
Market Access Office (within theDirectorate-General of Tourism,
Industry and Trade) and building the
capacity of its managerial staff.
Within the framework of this structure:
building the capacity of exporters byelaborating and implementing an
ongoing integrated training programme
on access to foreign markets.   All
training activities should be
complemented by practical users'handbooks for exporters for regular
consultation.World Bank The World Bank is supporting capacity
building efforts in PROMEX as the key
government agency entrusted with theobjectives stated under this item.
__________