WORLD TRADE  
ORGANIZATION  WT/COMTD/LDC/W/33/Add.1 
28 February 2005 
 
 (05-0808) 
Sub-Committee on Least-Developed Countries  
  
 
ASSISTANCE TO ADDRESS SUPPLY-SIDE CONSTRAINTS  
 
Note by the Secretariat
1 
 
Addendum  
 
 
I. INTRODUCTION  
1. The issue of supply-side constraints is currently being considered as part of the LDC Work 
Programme in the Sub-Committee on LDCs.  The di scussion is based on the note prepared by the 
Secretariat entitled "Assistance to Address Supply-side Constraints" (WT/COMTD/LDC/W/33).  At 
its 38th Session, the Sub-Committee requested the Secret ariat to prepare a follow-up on the Secretariat 
note that would provide a summary of the state of the implementation of the actions identified in the Action Matrices of the Diagnostic Trade Integration St udy (DTIS) in so far as these actions relate to 
strengthening of supply-side capacity and identify factors impeding progress in their implementation.  
Fourteen LDCs have completed and validated thei r DTIS.  These are Burundi, Cambodia, Djibouti, 
Ethiopia, Guinea, Lesotho, Madagascar, Malawi, Ma li, Mauritania, Mozambique, Nepal, Senegal and 
Yemen.  This note focuses on the implementation of  the supply-side actions identified in the Action 
Matrices of the 14 LDCs. 
2. In preparing this note the Secretariat emba rked on a comprehensive information seeking 
exercise from these 14 beneficiaries as well as from co re Integrated Framework (IF) agencies, donors 
and other IF stakeholders involve d in this process.  The Secretar iat sent letters to the 14 LDCs 
requesting information on implem entation and impediments to implementation, of supply-side 
capacity-building activities as identified in their Action Matrices.  In addition, at the meetings of the 
Integrated Framework Working Group (IFWG) and Integrated Framework Steering Committee 
(IFSC) on 22-23 November and on 2 December 2004 respectively, the Chairs underlined the importance of the exercise and appealed for assistance in collecting the required information.  To date, 
the Secretariat has received responses from two LDCs, several IF agencies and one bilateral donor.
2   
3. The preparation of this note heavily relied on th e country-specific information that was made 
available to the Secretariat.  In addition to th e information received, responses to the Monitoring 
Questionnaires provided by IF beneficiaries as well as reports on progress made at the 12th IFSC 
meeting3 have also been used to prepare this note.  However, it must be noted that the information 
collected to date is partial and thus does not permit a comprehensive assessment of the state of play in 
the beneficiaries, nor of the extent to which the IF  is responding to the supply-side constraints in the 
beneficiaries.  The note attempts to identify s upply-side related actions contained in the DTIS, 
                                                      
1 This document has been prepared under the Secret ariat's own responsibility and without prejudice to 
the positions of Members and to their rights and obligations under the WTO. 
2 Responses were received from Lesotho, Malawi , the United States, ITC,  UNDP, World Bank and 
OECD. 
3 The report of the meeting is contained in document WT/IFSC/M/11. WT/COMTD/LDC/W/33/Add.1 
Page 2  
 
 compiles country-specific progress in relation to supp ly-side needs identified in the DTIS and seeks to 
make some preliminary observations based on the current state of implementation.  
II. SUPPLY-SIDE RELATED ACTIONS CONTAINED IN THE DTIS  
4. As mentioned in the Secretariat note WT/COMTD/LDC/W/33, supply-side constraints 
generally refer to impediments to the development of capacity to produce goods and services 
competitively and to the ability to get them to ma rkets at a reasonable cost.  While constraints 
identified in the 14 DTIS vary from one country to  another, there are generally four areas of 
supply-side constraints that commonly appear in th eir Action Matrices;  these relate to transport 
(roads and ports, in particular), customs/trad e facilitation, quality and standards, and export 
promotion.  The table below illustrates these constraints and highlights some of the main 
recommendations from the DTIS.  The four types in the table each include constraints related to 
physical infrastructure.   
Type of supply-side 
constraint  Actions recommended in the DTIS 
Transport 
 
 • improve the quality of transportation vehicles and services 
• reduce delays and illegal paymen ts along major transportation 
routes 
• improve the availability of air cargo 
• review models of port management 
• re-assess tax structure on transport equipment and services with a 
view toward lowering costs and increasing competitiveness 
 
Customs 
   • ease customs procedures so as to reduce the cost of importing and 
exporting 
• reduce paper transactions - introduce computerisation and 
automation of procedures and information systems at all border posts  
• clarify the roles and responsibiliti es of the several overlapping 
agencies involved in border inspection 
• support the establishment of an independent appeals office on 
custom matters 
• strengthen institutional capacity to administer drawback programme 
• need for harmonisation with regional initiatives 
• encourage the application of the WTO defined customs valuation 
procedures 
• improve the use of ASYCUDA 
 
Standards/Quality requirements    • improve services of the quality and standards authority 
• introduce legislation to base domestic regulations on international 
standards 
• establish an inquiry point for SPS measures 
 
Export Promotion   • establish and implement a national export promotion policy 
• strengthen the human resource base in the public administration and 
in the private sector to promote the export sector 
• enhance quality of local production 
• sector or product-specific measures to enhance exports  WT/COMTD/LDC/W/33/Add.1 
 Page 3 
 
 
 5. Other constraints identified in the Action Ma trices include:  trade-related institutional 
capacity;  capacity to formulate, analyse and assess trade policy matters;  trade-support institutions;  
regulatory and administrative constraints;  and lack  of an enabling business environment.  While these 
constraints do not directly fall within the definiti on of supply-side constraints as set out above, they 
nevertheless need to be addressed so as to allo w improvement of the performance of the economy as 
they are instruments to overcome supply-side constraint s in the long run.  It is important to note that 
many DTIS (Burundi, Djibouti, Ethiopia, Guin ea, Lesotho, Madagascar, Mali, Mauritania, 
Mozambique, Nepal, Senegal and Ye men) have identified the need to improve the general business 
environment, in particular to attract foreign direct  investment (FDI).  For some of the supply-side 
related needs, FDI is an important channel to address these and to generate and improve production 
capacity.  Specific actions recommended in the DTIS include the establishment of a 
legislative/institutional framework (e.g. investme nt code), the provision of one-stop services for 
investors, and the provision of reliable and affordable public utilities such as electricity, 
telecommunication and water. 
6. Experience to date has shown that it takes time  for LDCs and their development partners to 
internalise the DTIS' findings.  Most of the activitie s that immediately follow the validation (in some 
cases, prior to the validation) are related to cap acity building, often in volving strengthening the 
capacities of the Ministry of Commerce, the IF  National Steering Committee, or other IF and 
trade-related institutional structures.  Along with  capacity building, export promotion and quality 
control related activities, most often sector or produc t-specific, receive support at the early stage after 
the validation.  It is important to note that Wi ndow II of the IF Trust Fund plays a major role in 
supporting the above activities in many IF beneficiaries.  
7. With regard to other supply-sid e needs which are typically iden tified in the DTIS, such as in 
the areas of customs and transport infrastructure, reactions from developmen t partners are usually 
taking longer to materialize.  To date, in the area of customs modernization, support has been received 
in Cambodia, Madagascar, Mauritania and Nepal.  In the area of transport, support has been received 
in Senegal for the building of a cargo terminal, in Madagascar for the rehabilitation of the country's 
major transport infrastructure, and in Djibouti for the construction of a port with a new container 
terminal, a free zone, and an oil terminal.  These are among the first set of countries to have validated their DTIS and have had more time to interna lise the study findings as well as to engage with 
development partners on follow up.
4  Moreover, it is important to note that, these projects are 
generally more resource intensive than capacity- building activities which typically take place at the 
early stage after the validation.  In sum, the more resources required to address the identified 
supply-side needs, the longer it normally takes to translate them into concrete support.  
8. It is noteworthy that the actions proposed to address supply-side constraints identified in the 
DTIS generally involve a combination of policy a nd legislative reform, enhancement of physical 
infrastructure, as well as institutional and human capac ity building.  In other words, an integrated 
approach, led by the government on the policy si de and complemented by development partners' 
efforts on the technical and financial assistance side , is essential to respond effectively to the multiple 
and complex nature of LDCs' supply- side challenges.  This also em phasizes the importance of linking 
the results of the DTIS to national development strategies such as the Poverty Reduction Strategy 
Paper (PRSP), the latter being the main policy framewo rk for many LDCs and also the main basis for 
allocating development assistance by donors.  Furthe rmore, presenting the DTIS and its Action Matrix 
at the Consultative Group (CG) or Round Table, wh ich is the main platform for raising donors' 
support, also increases the chances of receiving donor  support for identified actions.  To date, those 
countries that have presented the DTIS results at their donor funding fora (i.e. Cambodia, 
Madagascar, Mauritania and Senegal) have recei ved positive responses to the identified needs, 
including those on the supply side.  
                                                      
4 See Annex 1 for each of the 14 countries on pr ogress made in the step s of the IF process. WT/COMTD/LDC/W/33/Add.1 
Page 4  
 
 III. COUNTRY-SPECIFIC PROGRESS ON ADDRESSING TRADE-RELATED 
SUPPLY-SIDE NEEDS 
9. The following section contains country-speci fic information on activities undertaken to 
address trade-related supply-side needs expressed in  the Action Matrices.  The information provided 
is not exhaustive and is based on the responses that th e Secretariat received.  It is without prejudice to 
any other activity that is being undertaken in the countries under review by development partners or 
any other organizations.  It is understood that a number of donors, organizations and agencies are 
engaged in the LDCs and that their activities contribute to overcoming the supply-side needs identified in the Action Matrices.   
BURUNDI 
 
10. In the DTIS of Burundi, most notably tr ansportation and customs come up as major 
impediments to trade, although the macroeconom ic policy and trade policy framework is also 
highlighted.  Existing IF-related projects in Bur undi, funded out of Window II of the IF Trust Fund 
tackle some of these constraints.  
11. One of the approved Window II projects con cerns the establishment of a quality control 
system which will provide compatibility with ISO 9000 for all exporting enterprises in Burundi.  The project is meant to assist the National Bureau of Standards and Normalisation of Burundi to undertake 
this task.  Another Window II project deals with th e promotion of non-traditional exports like flowers, 
fruits and vegetables and more specifically with th e dehumidification of fruits and vegetables, by 
providing both a dryer and a cold room, in order to increase the export capacity of these products. The 
third Window II project concerns the technological upgrade of PVC tubes in order to meet 
international standards and to help export in the region. 
12. ITC is implementing a project for product develo pment, marketing and export promotion of 
essential oils in the region of Citiboke. 
CAMBODIA 
 
13. The Action Matrix of the DTIS Cambodia, validated at the National Workshop in 
November 2001, has identified customs, trans port (road and port), production/export capacities in 
specific sectors (diversified agriculture and agro -processing, handicrafts, garments, tourism) as the 
major supply-side constraints in the country's trade development.  Since the validation, the 
government has extensively engaged with donors,  who have responded positively to Cambodia's 
needs identified in the Action Matrix.  As of October 2004, Cambodia has listed some 60 projects 
encompassing a wide range of trade-related activities, supported by 26 different development partners, that have been attributed to the implementation of the IF.   
14. In the area of customs, the IMF has provided Trade-Related Technical Assistance (TRTA) on 
customs administration, capacity improvement in tax policy and administration, and on capacity to 
collect, compile, analyse and disseminate broad econom ic statistics and external trade data through 
reform of the statistical institutional framework.  In addition, as part of the Technical Co-operation 
Action Plan (TCAP) supported by the IMF, th e Asian Development Bank and UNDP, assistance was 
also provided on customs administration, including th e establishment of an independent appeals office 
on customs matters, the development of an integrat ed information technology strategy and related 
systems for import and export processing with the participation of government agencies, services 
providers and private sector, and capacity building of the customs officials.  Moreover, a loan 
provided under the World Bank's Private Sector I nvestment Credit has supported the computerisation 
and automation of procedures and information sy stems.  A grant recently approved by the 
World Bank/International Development Associa tion (IDA) for Cambodia's Trade Facilitation and  WT/COMTD/LDC/W/33/Add.1 
 Page 5 
 
 
 Competitiveness Project has a component on trade fa cilitation, with activities focusing on the design 
and implementation of a Single Administration Document incorporating all information needs to facilitate trade, reorientation of CamControl aw ay from mandatory inspections and towards new 
functions, the architectural design and implementation of a single window process and customs modernisation within a streamlined cross-agency procedure.   
15. In the area of transport, in addition to the above-mentioned assistance provided under customs 
which also addresses transport-related constraints in Cambodia, Japan has supported a study on the 
Regional Development Master Plan of the Phnom Pe nh - Sihanoukville Growth Corridor, with a view 
to attracting foreign direct investment for export promotion and developing the private sector with 
development of Sihanoukville Export Processing Zone .  With the support of Thailand, Cambodia has 
also undertaken a Joint Developmen t Study, focusing on the development of the Koh Kong and Poipet 
Industrial Estates to promote export industries.  In addition, as part of UNCTAD's Train for Trade 
Programme supported by France, training has been provided to port managers on port management 
issues.   
16. Regarding assistance targeted to enhance produc tion and export capacities, the first set of 
activities were launched at the early stage after the validation of the DTIS under the Capacity 
Building for Pro-Poor Trade Sector Reform Project, supported by Japan through the IF Trust Fund Window II with some co-funding from UNDP.  One of the results of this IF-supported project, completed in November 2003, was to "set the fundamental basis to expand Cambodian exports by carrying out comprehensive supply studies, which identified high export potential products and by 
undertaking initiatives aiming at strengthening th e capacity of trade support institutions".
5  I n  
addition, ITC's Export-Led Poverty Reduction Programme has focused on the support to poor 
communities in producing export-or iented products, including the formation of producers' groups, 
training on entrepreneurial skills, support in the adop tion of products to export market requirements, 
and partnership with microfinance instituti ons to address producers' credit needs.   
17. The Mekong Private Sector Development Fac ility (MPDF), a multi-don or funded initiative 
managed by the World Bank, has also provided suppo rt to promote the development of locally-owned 
small and medium-sized enterprises in Cambodia.   MPDF's interventions have focused on:  
(i) enhancement of human capital/entrepreneurial  know-how through the publication of self-study 
work books for entrepreneurs;  (ii) development of business associations (e.g. rich millers, hotel and 
guest house owners) for information sharing and skills  developments;  (iii) finance for SMEs;  and 
(iv) trade promotion, including providing information and training on trade finance.  Furthermore, the 
recently approved Cambodia's Trade Facilitation and Competitiveness Project includes the 
Diversification Complement, which is aimed at su pporting Cambodian producers into international 
markets by fulfilling four key gaps:  pre-export fi nancing, insurance, export plan development and 
market information at the producer level.  
18. While not directly mentioned in the Action Matrix, Cambodia has received support for the 
International Standards and Technical Regulations  Project, implemented by UNIDO and funded by 
Austria and Norway, with the objectives of esta blishing essential quality and conformity assessment 
infrastructure (standards, metrology, certification,  accreditation) and of assisting high export-potential 
sectors to upgrade product/production qua lity, and comply with standards and regulations for exports.   
19. In addition to the above assistance that is cr oss-sectoral in nature, support has been extended 
to specific sector or product.  In diversified agri culture and agro-processing sector, a study has been 
supported by Japan on the Improvement of Marketing System and Post-Harvest Quality Control of 
                                                      
5 Siphana, Sok, "Country Case Study:  Cambodia  IF Experience", a presentation made at Pre-DTIS 
Regional Workshop "Strengthening Country Ownership of the IF Process", Kigali, Rwanda, 
18-21 October 2004.     WT/COMTD/LDC/W/33/Add.1 
Page 6  
 
 Rice, as well as a project by Australia on Improving the Marketing System of Maize and Soybeans.  
In the areas of Sanitary and Phytosanitary measu res (SPS), assistance has been by New Zealand AID 
on phytosanitary project and AusAid on SPS capacity building.    
20. In the garment sector, which accounts for over 90 per cent of Cambodia's exports, the ADB 
has supported a project on Preventing Poverty an d Empowering Female Garment Workers Affected 
by the Changing International Trade Environment, in anticipation of the termination of the ATC at the 
end of 2004.  The earlier mentioned ITC's supported project also includes a component on entrepreneur capacity building and export promotion for production of silk handicraft, in addition to a project on Silk which was implemented by ITC as pa rt of by the IF-funded project "Capacity Building 
for Pro-Poor Trade Reforms Programme".  
DJIBOUTI  
 
21. The DTIS of Djibouti identifies several areas of  supply-side constraints such as institutional 
support for export development, customs and trad e facilitation, standards and transport.   
22. The US, through the African Union/Interafrican  Bureau for Animal Resources (AU/IBAR) 
and the Red Sea Livestock Trade Commission, is fi nancing a regional activity to develop a livestock 
marketing (export)/health certification facility in D jibouti.  Working with associations of livestock 
producers and herders, a facility will be built outside of Djibouti city for the large scale holding and health certification of all types of livestock for ship ment to the Middle East.  The facility will include 
holding pens, quarantine facilities and modern veteri nary services.  This is a private sector initiative 
supported by all the interested countries with th e common goal of creating a sustainable, private 
sector, market-driven facility that will export over one million head of livestock per year from 
Djibouti to the Gulf States.  
23. In cooperation with the Dubai Ports Authority, Djibouti is currently investing in a project that 
includes a port with a new container terminal, a free zone and an oil terminal with a capacity of 240,000 tonnes per year. 
24. The ITC is implementing a Window II funded proj ect to build the capacity of the government 
and the private sector.  The project will focus on capacity building and technical assistance for the 
Ministry of Commerce, the National Investment Promotion Agency, the Chamber of Commerce as well as formulate a strategy for the development of tourism in Djibouti. 
ETHIOPIA 
 25. The DTIS of Ethiopia identifies a number of su pply-side constraints namely in the areas of 
customs, transport and quality/standards.  To da te, Ethiopia has submitted a project proposal with 
three components for funding under Window II of the IF Trust Fund.  The first component focuses on institutional support to the Ministry of Trade and Industry and to the Chambers of Commerce.  The 
second component focuses on the enhancement of tr ade negotiation capacity.  The third component 
relates to support to the establishment of an inte rnationally recognised conformity assessment system 
to enhance trade competitiveness in terms of qua lity and performance.  These projects have not yet 
been implemented. 
26. The DTIS for Ethiopia highlights problems in recommencing livestock exports due to SPS 
constraints in regional markets.  Ethiopia is to be included as a pilot country within project STDF 13 to be implemented by the "Office International d es Epizooties" (OIE), which will commence in 2005.  
This project aims to develop a strategy and action plan for selected African regions to enhance public 
and private sector capacity in meeting sanitary st andards for international trade of livestock and 
livestock products.  WT/COMTD/LDC/W/33/Add.1 
 Page 7 
 
 
 GUINEA 
 27. The DTIS of Guinea identifies several areas of supply-side constraints such as institutional 
support for export development, customs and trade f acilitation, transport and utilities.  Special needs 
in the agricultural and fisheries sectors are also listed in the DTIS.  Two projects are financed from 
Window II of the IF Trust Fund, aiming at strengthening trade information services and 
diversification of agro-based export in the rural areas.    
28. The US Promotion Competitiveness Guinean Produc ts activity promotes the competitiveness 
of Guinean agricultural products through the reduc tion of transaction costs and the improvement of 
product quality.  The competitiveness of agricultura l products, including cashew nut, shea butter and 
honey, among others, will also be enhanced through  technology transfer th at improves not only the 
productivity of small scale private enterprises but also th e quality of their products.  In addition, trade 
capacity will be increased through technical assistan ce to increase the utility of market information 
systems for producers and traders.   
29. A US project provides assistance to local busin esses (especially to small business operated by 
women) to learn and invest in the technologies and business practices related to improved processing 
and sales of cashew nuts to both local formal markets and regional markets.  Another US project provides support to agriculture, trade, and entrep reneurial development thr ough the development of 
the enabling environment and of local, community-level  associations.  Through the decentralization of 
policies and practices and the local democratization process, the programme enhances the growth of a 
market economy and trade relationships.   
LESOTHO 
 30. The Action Matrix of Lesotho maps out its t echnical assistance needs in the long term, 
medium term and short term under seven broad headings ranging from institutional capacity to 
physical infrastructure.  Implementation of the IF Action Matrix is going at a reasonable pace with the 
continuous guidance of the lead donor, the Depart ment for International Development (DFID), and 
the UNDP country office.  
31. A project on mushrooms and peaches entitled "Product and Market Development of 
Agro-based Products" financed from Window II of the IF Trust Fund is being implemented by ITC.  
Under five modules this project addresses production and marketing of mushrooms and peaches.  The 
project among others includes components on training  of people in mushroom growing, on production 
issues (production, harvesting, packaging, food saf ety requirements), supply-chain issues (labelling, 
packaging, storage, marketing targeting) and in cludes a component on strengthening market linkages 
between supplier and importer.  Steps have been ta ken for a feasibility study of peaches marketability 
which will result in producing peaches that satisfy market requirements.   
32. A number of targeted activities to promote FD I are also being taken up.  These activities, 
which stem from the Investment Policy Review (IPR) undertaken by UNCTAD, are expected to 
improve Lesotho's investment climate with potenti als for more investment and thereby enhancing 
productive capacity in the country.  For instance, a one -stop shop is to be estab lished in the financial 
year 2005-2006 for which budgetary provision has b een made. An investment code and FDI law is 
being developed that will provide better treatme nt and guarantee protection of assets of foreign 
investors in Lesotho.  Development of a competiti on policy is being planned.  Capacity to negotiate 
Bilateral Investment Treaties is being enhanced.  Training in investment promotion and investor 
targeting is also being taken up.  WT/COMTD/LDC/W/33/Add.1 
Page 8  
 
 33. The World Bank has undertaken a value chain an alysis of four sectors:  textiles/garment, 
sandstone mining, wool and mohair  and agrobusiness in preparation for a private sector development 
project.  
34. A project sponsored by DFID entitled "Leso tho Trade and Poverty Programme (LTPP)" 
includes some activities in the area of trade negot iations and institutional capacity building, which 
form part of the validated Action Matrix.  
35. The Government of Lesotho is in the process of  formulating an industrial master plan, in 
cooperation with UNIDO, UNCTAD and ITC, which will include a clear road map for addressing 
supply-side constraints.  An SME policy, finalized  by the government and awaiting approval of the 
parliament, is aimed at promoting backward linkage.  Sector specific actions are also being taken to 
promote and diversify exports.  An inter-Ministerial  Task Force has been looking at all options to 
attract and maintain FDI in the clothing sector.  A draft Action Plan for improving the competitiveness of Lesotho's garment industry is also envisaged to attract FDI in the sector.  Work is 
also envisaged by the Government of Lesotho with  the involvement of private companies in Lesotho 
and South Africa to make Maseru Railh ead a modern transportation facility .  
MADAGASCAR 
36. The DTIS of Madagascar identifies several areas of supply-side constraints such as 
institutional support for export development, customs and trade facilitation, standards, transport and 
utilities.  Special needs in the agricultura l sector are also listed in the DTIS.   
37. A project entitled "International Trade Capacity  Building in Madagascar", has been approved 
for funding out of Window II of the IF Trust Fund.  
38. The US is implementing a project to assist with product certification that provides buyers a 
guarantee of high quality produc ts for natural products (spices and essential oils for food, 
aromatherapy and other related industries).  The US has provided a grant to the Malagasy Ministry of 
Transportation which will finance a study that will determine the feasibility of implementing a 
barge-lightering system to improve efficiency and capacity to Madagascar’s second largest port - 
Mahajanga.   
39. The World Bank is implementing the "Transport Infrastructure Investment Project".  The 
project's specific development objective is to reha bilitate the country's major transport infrastructure 
in order to reduce transport cost and to facilitate trade.  The national road upgrading, rehabilitation 
and maintenance programme aims at bringing  all the primary and secondary national roads 
(7,313 km) to good and fair condition by end of  2008.  The World Bank has also implemented a 
project for the management of customs operations using the system SYDONIA ++.  Also, a project 
for the reform and modernisation of customs is underway.  The World Bank has recently implemented 
a project on the development of the private sector and FDI.  Other components of that project include the development of a free-trade zone in Tamatave. 
40. The European Communities is undertaking a proj ect for the development of specific labelling 
(Bio, etc.) for the Malagasy agricultural products.  The promotion of the labelling "Natural Vanilla of 
Madagascar" is also underway.  A project is be ing implemented by France for the set up of an 
epidemio-surveillance laboratory for the production of shrimp. 
MALAWI 
 41. The Action Matrix of Malawi lists five br oad areas of action (macroeconomic and social 
stability, transportation, export sector specific me asures, customs reform and other institutional  WT/COMTD/LDC/W/33/Add.1 
 Page 9 
 
 
 capacity) for improving the competitiveness of th e economy and its integration into the global 
economy.  
42. Under Window II of the IF Trust Fund, a trade policy advisory and capacity-building project 
is being implemented.  An international senior tr ade policy advisor has been appointed to help the 
government in this process.  This project is expect ed to strengthen Malawi's capacity for trade policy 
analysis. 
43. Technical standards (particularly SPS requireme nts) are identified in the DTIS as a major 
supply-side impediment to Malawian firms br inging agricultural and agro-based products to 
developed markets.  In this regard, a standards and quality capacity-building project providing support 
to the Malawi Bureau of Standards is under review  under Window II of the IF Trust Fund.  A project 
preparation grant on the establishment of codes of practice to deal with aflatoxin contamination 
among groundnut producers is under consideration.  
44. In the context of a meeting with donors schedul ed in mid-February 2005, consultants have 
been engaged to develop draft project proposals b ased on a prioritized list of issues drawn from the 
Action Matrix.  
45. The US is undertaking a number of activities to build capacity in the areas of trade 
facilitation, e-commerce and IT, trade-related agri culture, physical infrastructure development and 
export promotion.  These activities contribute to enha ncing the supply-side capacity of Malawi.  For 
instance, support for agriculturally-linked enterpri ses is aimed at increasing rural employment and 
incomes by spurring the growth and trade of pr ivate sector "agriculturally-linked" enterprises. 
MALI 
 
46. The DTIS of Mali identifies several areas of s upply-side constraints such as institutional 
support for export development, customs and trade facilitation, transport, standards and utilities.  
Special needs in the agricultural and fisher ies sectors are also listed in the DTIS.   
47. The Mali Trade Promotion Programme (TradeMali)  is a project funded and implemented by 
the US which aims to increase Malian exports to th e regional and global markets. The activity consists 
of:  (i) improving the policy and institutional environment for trade and investment;  and (ii) improving the competitiveness of Mali’s private sector.   
48. In 2004, the US implemented "The Mali Finance Project".  The project is working to increase 
access to financial services for small and medium businesses and to strengthen promotional skills to 
attract investments in Mali.  Through its investment promotion activities the project has undertaken 
two large scale trade-related activities.  The firs t involves studying the feasibility of creating an 
independent authority for infrastructure investments in Mali.  The second pertains to the development 
of a proposal for a revised structure for an institu tion to implement the functions presently undertaken 
by the Malian Investment Promotion Center (CNPI).   This revised structure will also include the 
business registration functions of a " guichet unique", or "one-stop shop".  In addition to its investment 
promotion activities, the project also works direct ly with local banks to provide capacity-building 
technical assistance.   
49. The US is implementing another project who se overall objective is to increase the production 
of agricultural and livestock products for which Ma li has a comparative advantage on the domestic 
and exports markets. The activity consists of:  (i) promoting irrigated agriculture for rice and 
horticultural crops production;  (ii) improving the av ailability and accessibility to quality animal feed 
to increase the competitiveness of Mali’s livestock sector;  (iii) increasing control of village 
associations over the natural resources and the envir onment;  and (iv) promoting the availability and WT/COMTD/LDC/W/33/Add.1 
Page 10  
 
 accessibility of agricultural inputs and technologies (including biotechnology and seed).  In the 
coming year, the project will strive to increase  investments in irrigation, provide business 
management support to animal feed enterprises and provide training to the public and private sectors 
institutions in various technical skills.   
MAURITANIA 
50. The DTIS of Mauritania identifies several areas of supply-side needs such as export 
promotion, quality enhancement of products to sell abroad, trade facilitation and customs, while 
specific needs are also listed in the fisheries and tourism sectors.  
51. The IF Trust Fund finances activities aimed at
 capacity building in international trade through 
institutional support to the government.  A Wi ndow II funded project finances support for the 
Chamber of Commerce, Industry and Agriculture.  Another Window II project is funding the 
establishment of a lightweight structure to promot e fish products.  The Joint Integrated Technical 
Assistance Programme (JITAP) funds a project on export strategy for livestock and hides. 
52. The World Bank and the EC are currently prepar ing a project on standardization and quality 
control in the area of fisheries.  Funding from Fr ance has been requested for a study to establish a 
system of standardization, certification and labelli ng.  The African Development Bank funds a project 
on customs modernization.  France is also involve d in a project in support of the development of 
tourism.  Italy funds a project aimed at establishi ng an effective trade information system for business 
development.   
MOZAMBIQUE 
 
53. Mozambique's validation workshop was held  in September 2004.  Although the DTIS 
identified a number of recommendations including those relating to supply-side constraints, to date no 
specific projects have been identified or agreed upon for assistance.   
NEPAL 
 
54. The Action Matrix of Nepal's Trade and Competitiveness study outlines long-term, 
medium-term and short-term prior ity actions in areas ranging from tr ade facilitation to trade-related 
institutions broadly to realize its trade potential and to improve competitiveness of the economy.   
55. Proposals submitted for funding out of Window II of the IF Trust Fund, including, among 
others, enhancement of private sector capacity, are at various stages of approval.  For instance, ITC is in the process of implementing a project on the es tablishment of an export-financing facility under 
Window II of the IF Trust Fund.  Projects to reform customs procedure and improve custom 
infrastructure have been formulated.  Moreover, sectoral action plans (garments and carpets) have 
been developed to improve efficiency of the sect or and to increase foreign exchange earnings and 
employment.   
56. Two areas of the Action Matrix are being a ddressed through the capacity-building assistance 
by the US.  Technical assistance is being provide d to assist Nepal's custom s authorities to establish 
and implement an efficient and effective customs valuation system that is fully compliant with WTO Agreements.  Support is also extended by the US  to improve agriculture policy environment and 
agrobusiness development.  WT/COMTD/LDC/W/33/Add.1 
 Page 11 
 
 
 SENEGAL 
57. The DTIS of Senegal identifies several areas of  supply-side constraints such as institutional 
support for export development, customs and trade facilitation, transport, standards and utilities.  
Special needs in the agricultural and fisher ies sectors are also listed in the DTIS.   
58. A Window II funded project is being implemen ted for the creation of a special commission 
for the restructuring of the fisheries sector.  Th e Ministry of Handicraft is implementing a Window II 
funded project for the strengthening of support infr astructure for the development of handicraft in 
Senegal. 
59. The World Bank has recently (November 2004) approved implementation of the Senegal 
Integrated Marine and Coastal Resources Management Project.  The project aims to increase the 
sustainable management of marine and coastal resources.  The World Bank is carrying out a project 
for the creation of a freight station which will complete  an investment to install a cold storage facility 
at the Leopold Sédar Senghor airport. 
60. The US has funded a study which will determin e the feasibility of construction and operation 
of a fermentation plant to produce the food supplement monosodium glutamate in Dakar.  Once 
completed, the new fermentation plant is intend ed to produce 10,000 to 20,000 metric tons of 
monosodium glutamate to be supplied to regional markets.  The US is implementing a project 
focusing on:  (i) promoting non-traditional exports;  and (ii) improving access to competitively-priced telecommunication services.  The project has sever al components including a component on customs 
operation and administration, environmental trade and standards and export promotion among others. 
61. Moreover, another project aimed at creating the Senegalese Agency for export promotion is 
being implemented by Canada, ITC and the European Communities.  
62. A project is being implemented by FAO for th e development of aquaculture in Senegal. 
63. It may be noted that the Senegalese authorities have implemented a series of reforms in 2004 
aimed at, among other things, the liberalization of the telecommunication sector (July 2004), the 
establishment of a Superior Council of Tourism (2003), etc. 
YEMEN 
64. The DTIS of Yemen lists several areas of supply-side needs, such as trade 
facilitation/customs, transport, utilities, improvement  of investment climate, WTO accession capacity 
building and strengthening of judicial reform.  Ne eds are also expressed in the agricultural and 
fisheries sectors.  
65. Funds from Window II of the IF Trust Fund are requested to finance a project aimed at 
strengthening industrial and trade registration capac ities.  A project assisting in the export promotion 
of fruit and vegetables has also been approved for funding out of Window II. 
66. The World Bank's Port Cities Development Programme Project aims to improve the 
investment climate and encourage growth and the creation of employment opportunities in port cities. 
There are three components to the project.  The revitalizing Aden economy and business clusters 
component will support local economic developmen t by creating and reinforcing business linkages 
within the city, revitalizing existing business and triggering new private sector investment.  The port 
cities strategic and physical planning component wi ll finance the formulation of city development 
strategies for Aden, Hodeidah and Mukalla;  techni cal assistance, design and feasibility studies would 
also be financed.  The Aden local capacity bui lding and administrative modernization component WT/COMTD/LDC/W/33/Add.1 
Page 12  
 
 includes a series of capacity-buildin g measures focused on improving th e efficiency and transparency 
of public services provided to the private sector.   
67. The US Agriculture Support Programme has two objectives:  expanded sustainable 
production of agricultural products for the market and home consumption;  and expanded markets for 
agricultural products.  Four priority areas for its ag ricultural support programme are:  (i) Support to 
the Ministry of Agriculture to Improve Service Deli very and Restructure;  (ii) Agriculture Research 
and Extension,  (iii) Horticulture Marketing;  and (iv) Livestock.  Women’s Services and Extension is 
a cross-cutting component.  
68. A US pilot project is designed to assist Yemen in streamlining regulatory procedures, 
lowering transactions costs and shortening approva l delays which will largely benefit small and 
medium establishments. The US also funds a proj ect providing assistance to the Yemeni Government, 
private sector and civil society to build their capacity  to participate effectively in international trade 
and trade negotiations.   
69. The EC is preparing a project to assist in the development of the Free-Trade Zone in Aden.   
70. The Netherlands is providing assistance in strengthening judicial reform, important for the 
investment climate.  
IV. CONCLUSIONS 
71. This note summarizes the supply-side needs identified in the DTIS, progress made in 
individual countries in the implementation of actions being undertaken to overcome those supply-side 
constraints, and makes some preliminary observations  on the current state of play.  While types of 
constraints identified in the DTIS vary from one country to another, transport, customs/trade 
facilitation, standards/quality control and export prom otion are the four main areas where supply-side 
constraints are commonly identified in the 14 Action Matrices under review.  Progress in the 
implementation of activities aimed at overcoming these supply-side constraints has also varied among 
the 14 countries which are at different stages of th e IF process.  Generally, standard/quality control 
and export promotion-related activities have received support at the early stage after the validation of 
the DTIS, along with capacity-building activities.  It is important to note that Window II of the IF 
Trust Fund plays an important role in supporting th ese activities at this stage.  Subsequently, donor 
funding through the PRSP process, the CG and R ound Table meetings becomes a more prominent 
channel to translate the needs expressed in the DTIS into concrete support.   
72. While there are different factors impeding progress in the implementation at each stage of the 
IF process, some common observations can be ma de.  Overall, a difficulty identified by many 
beneficiaries in the implementation of the IF is th e lack of capacity and shortage of skilled manpower 
as well as the lack of experience in designing or form ulating projects for financing.  At the early stage 
following the validation when Window II plays a key role, several countries have expressed concern about the delay in the release of funds from Wi ndow II and about its complex procedures.  The 
concerns relating to Window II, including insuffici ent availability of funds, are currently being 
addressed in the IFWG.  In the medium to long run,  progress in the internalisation of needs expressed 
in the Action Matrices into assistance programmes of  development partners has been slow.  While 
development partners have conti nuously supported the IF by funding its Trust Fund, more efforts 
should be directed toward matching the needs expressed in DTIS Action Matrices with their 
assistance programmes.  At the same time, LDCs s hould ensure the incorporation of DTIS findings 
into their PRSPs and national development plans.  Increased coordination within LDC governments 
and among development partners s hould allow the IF to better respond to supply-side challenges of 
LDCs in a more systematic manner.   WT/COMTD/LDC/W/33/Add.1 
 Page 13 
 
 
 ANNEX 1 
 
Progress in the Implementation of the IF in the four teen LDCs which have validated their DTIS and 
are under review in this paper  
(as of 11 February 2005)  
 
 
 National DTIS 
Workshop Consultative 
Group/Round Table/ 
IF Implementation 
Meetings Status of follow-up Inclusion of trade in 
PRSP 
Burundi December 2003 The workshop outcome 
presented at the Round Table meeting in January 
2004. Trust Fund Window II 
projects have been approved in 2004. Trade identified as 
priority in Interim PRSP in December 2003. 
Cambodia November 2001 Discussion on the IF at 
the CG meeting in June 2002. An IF project 
implemented since 2002.  Additional follow-up activities on-going. IF results fully 
incorporated in PRSP in December 2002. 
Djibouti May 2004 TBS; A CG is planned 
for June 2005. IF Trust Fund Window II 
projects approved in 
2004. IF results to be included 
in forthcoming PRSP in 
2004. 
Ethiopia November 2003  IF Trust Fund Window II 
projects approved in 2004. Trade partly covered in 
PRSP in July 2002. 
Guinea October 2003 TBS IF Trust Fund Window II 
projects approved in 
2004. IF results to be 
incorporated in 
forthcoming PRSP Progress Report in 2004. 
Lesotho February 2003  IF Trust Fund Window II 
projects approved in 
2004. IF Action Matrix form 
one of the attachments to 
the PRSP operational 
document. 
Madagascar July 2003 
  
 
 IF donor meeting in 
January 2004. IF Trust Fund Window II 
projects in preparation. IF results fully 
incorporated in PRSP in July 2003. 
Malawi September 2003  IF Trust Fund Window II 
projects approved in 
2004.  
Mali December 2004 Next Roundtable 
meeting is scheduled for 
2006.  Trade partially covered 
in PRPS in February 
2003. 
Mauritania November 2001 
 IF donor meeting in 
November 2002. An IF project 
implemented since 2002. Additional IF Trust Fund 
Window II projects 
approved in 2004. IF results fully 
incorporated in PRSP Progress Report in July 
2004. 
Mozambique September 2004    
Nepal June 2003 IF donor meeting in 
November 2003. An IF Trust Fund 
Window II project has been approved by UNDP 
and other projects are 
under consideration. Current tenth plan is the 
PRSP. Action Matrix has been integrat ed into the 
development strategies 
of different Ministries. 
Senegal December 2002 IF donor meeting in June 
2003. Action Matrix presented 
at the CG meeting in 
June 2003. Follow-up activities in 
progress. IF Trust Fund Window II 
projects in preparation. Trade covered in PRSP 
June 2002. 
Yemen June 2003 TBS IF Trust Fund Window II 
projects in preparation. Integration DTIS results 
into PRSP in progress. 
 
__________