Export Promotion
in Developing Countries- JICA’s Experience 1st High Level Forum
Industrial Policy Dialogue (Phase II) in Ethiopia
Toru Homma
Senior Advisor on Private Sector Development
Japan International Cooperation Agency (JICA)
Homma.Toru@jica.go.jp

Addis Ababa, 11 January 2012

Contents of today’s presentation
today’s
1. Introduction: export promotion
2. Major approaches in export promotion
assistance
3. Indonesia’s case – JICA’s assistance andcountry’s experience
4. Summary and major implications forEthiopia2

1. Introduction: export promotion
 Export promotion - a major part of private sector
development
Driving force of private sector led economic growth Export promotion - a wide variety of approach
Not only incentive instruments but many approaches
are available and complement each other Implementation on the ground
Framework alone does not make change Capacity building for service delivery
Customer-oriented, demand driven

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Major approaches for export promotion- JICA’s experience WTO/EPA related
Trade Policy
capacity building
Support
Policy framework

Export Promotion Organization
capacity building
Exporter
Organization andplanning

Services (MarketInfo, Promotion,Linkages etc.)

Exportmarket

Trade/ExportTraining
Exporter competitivenessExport productcompetitiveness
improvement

Trade Facilitation/ Procedures
Export infrastructure
Soft Infrastructure
Hard Infrastructure(Transport, OSBP, SEZ etc.)(IPR, Standards & Conformance,Metrology, Statistics etc.)

4Major approaches for export promotion- JICA’s experience i.

Building of implementing capacity for export promotion
1) Organisation and planning2) Service delivery capacity building
ii. Export/trade trainingiii. Trade policy support
iv. WTO, FTA/EPA
v. Trade facilitation / trade related proceduresvi. Other export related assistance:
1) export product competitiveness improvement, 2)
soft infrastructure (IPR, standards & conformance,legal metrology, statistics), 3) hard infrastructure(transport, OSBP, SEZ)
52-i. Building of implementing
capacity for export promotion
1. Organization and planning• Ministry-internal organization/department? orexport promotion agency? or overarching body?
• Necessary functions and action plans
2. Service delivery capacity building• Market information services• Promotion services• Linkage/networking services etc.
3. Assistance in the past
• Indonesia NAFED, Malaysia MATRADE, Lao
DPR Trade Promotion Project, Egypt EEPC,Dominican Republic, Guatemala AGEXPORT etc.
6Export promotion organizations(Asian examples)

Source: JICA (2009) Final Report: The Strengthening of Export Promotion Organization in the Republic of Indonesia

72-ii. Export/trade training• Most conventional JICA’s assistance in the trade sector• Conducted at newly established / existing export
training centers in developing countries• Targeted exporters / potential exporters (mostly SMEs)• Provide trainings and TOTs
• Various training courses: export procedure, pre-export
inspection, export product value addition…
• Assistance in the past: Indonesia IETC, Kenya EPC,
Egypt FTTC etc.

82-iii. Trade policy support• Dispatching trade policy advisor in responsible
ministry/agency: Indonesia, East Timor, PNG, Mongolia,
Pakistan, Madagascar …
• Economic/Industrial policy support program (dialogue)
sometimes include export promotion component• Training in Japan• Training in third countries (ex. Japan-Singapore
Training Programme on Trade and Investment
Promotion for APEC Economies)

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2-iv. WTO, FTA/EPA
1. APEC WTO Capacity Building Program (2002-2004)• Indonesia, Malaysia, Philippines and Thailand• Ministerial function, AD/CVD/SG/DSU, GATS,TRIPS, TBT• Workshop, training, training material, systemdevelopment
2. Group Training Course on WTO in Japan• Implementation of WTO Agreements in Africa
3. Free Trade Agreement (FTA) / Economic Partnership
Agreement (EPA)• Project for the Strengthening of the Utilization ofIJEPA (Indonesia)
102-v. Trade facilitation /trade related procedure• Analysis of cargo and document procedures forimport/export• Time study and productivity improvement• Web-based trade rule book, database, manuals• Dialogues on trade related regulations and export
promotion facilities• Coordination with customs / inter-ministerialcoordination• One Stop Border Post (soft component)

112-vi. Other export related assistance
1. Export product competitiveness improvement• MSME development (Kaizen, OVOP,design/brand/packaging etc.)
2. Export related soft infrastructure• Intellectual Property Rights (IPR), standards &conformance, legal metrology, trade statistics etc.
3. Export related hard infrastructure• Transport infrastructure, One Stop Border Post,
Special Economic Zone (SEZ) etc.

123. Indonesia’s case – JICA’sassistance and country’s experience

Facts: 240 mil. population, export value $157 bil. (2010), economicintegration (ASEAN & APEC)
 Traditionally deep ties with Japan both in public/private: EPA, East
Asian industrial network, largest ODA recipient All the menus are available here
 Significant contribution by Indonesian side

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Indonesia’s policy instrument menu forexport promotion in 1980sa. Type 1: Primary product processing (eg. Plywood)• Regulation on raw material export  Investment
incentive on domestic production  Export incentiveon processed wood (cheap credit, drawback)b. Type 2: Transforming from IS to EO (eg. Textile)• Regulation on product import (tariff up)  Tariff
down for material import; Investment incentive on
domestic production;  Export incentive on textile(cheap credit, drawback)c. Type 3: Processing deal (eg. Semiconductor)• Incentive on parts import  Export incentive onproductSource: Yamazawa and Hirata ed. (1987) Hatten Tojokoku no Kogyoka to Yushutsu Shinko Seisaku (in Japanese:Industrialization and Export Promotion Policy of Developing Countries)
143. JICA’s continuous support forIndonesia’s export promotion
i. Export promotion
ii. Trade trainingiii. WTO capacity building
iv. EPA socialisation and utilisation strengtheningv. Trade facilitation / trade related proceduresvi. Other export related support: export productcompetitiveness improvement, trade related
infrastructure (hard and soft)15

3-i. Export promotion (Indonesia)
Cooperation with National Agency for Export
Development (NAFED)a. Project for Establishment and Capacity Building ofRegional Export Training and Promotion Centers(RETPCs) (2002-2006)
b. Study for Strengthening of Export Promotion
Organization (2007-2009)c. Project on Service Improvement of NAFED (20102015)16

3-i-a. Project for Establishment and Capacity
Building of Regional Export Training and Promotion
Centers (RETPCs) (2002-2006, Indonesia)
 Established four RETPCs in four cities(buildings/facilities are prepared by Indonesian side):
Surabaya, Medan, Makassar and Banjarmasin Provide export training, trade information andpromotion services to SMEs in the respective regions
 Related Institutions: NAFED, IETC, Provincial
Governments – Directorate of Industry and Trade(East Java, North Sumatera, South Sulawesi, SouthKalimantan)

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Regional Export Training and Promotion Centers (RETPCs)(buildings and facilities are provided by Indonesian side)

RETPC East Java（Surabaya)

RETPC North
Sumatra （Medan)

IETC (Indonesia
Export TrainingCenter) （Jakarta)

RETPC South
Sulawesi （Makassar)
Source: JICA (2006)

RETPC South Kalimantan（Banjarmasin)

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Facilities of RETPCs(basically provided by Indonesian side)

Mini-Display

Class Room

Auditorium

Business Library
Source: JICA (2006)

Computer Room19

3-i-b. Study for Strengthening of Export
Promotion Organization (2007-2009, Indonesia)

 Analysis
 Comparison of optimum organizational structure (thenext slide) Action plans (the following slide) Pilot projects
 Recommendations

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Comparison of optimum organizational structure
for export promotionFor Indonesia, “service-oriented” was recommended.
Why?

Source: JICA (2009) Final Report: The Strengthening of Export Promotion Organization in the Republic of Indonesia
21Proposed action plans for NAFED = Possible menu
Market Information Service

A14 Design/brand awareness for SMEs

A01 Review incl. website design

A15 SME design/brand dev. training

A02 Market intelligence capacity

A16 Design-related information service

A03 Value-added market info Service

A17 Matching SMEs and designers

A04 Buyers list improvement

Network and Alliance

A05 Exporters list improvement

A18 Government support desk

Export Promotion Service

A19 Support for RETPCs & alumni

A06 Customer service center establish

A20 NAFED regional information desk

A07 Free membership service: Club

A21 Service providers partnership

A08 Business partnership program

A22 Export education for awarenessA09 Export Market Dev. Grant scheme

Organizational/Manage system

A10 Industrial cluster dev. program

A23 Organizational restructuring prep.

A11 Dialogue w/ major export industries

A24 Evaluation system establishment

A12 Inter-ministerial meeting

A25 ISO9000-base management system

Product Development Service

A26 HR management system

A13 Design/brand development capacity

A27 Renewal of visual identity

Source: JICA (2009) Final Report: The Strengthening of Export Promotion Organization in the Republic of Indonesia
223-i-c. Project on Service Improvement of NAFED(2010-2015, Indonesia)
Outputs (*NAFED renamed as DGNED)
1. NAFED organization reform is expedited
2. Market Information Service of NAFED intended forexport SMEs is improved
3. Export Promotion Service of NAFED intended forexport SMEs is improved
4. Product Development Service (Brand/DesignPromotion) of NAFED intended for export SMEs isimproved
5. Networking and alliance function among NAFED anddomestic export promoting organizations arestrengthened23

3-ii. Trade/export training (Indonesia)
 JICA’s Technical Cooperation with IETC

(Indonesia Export Training Center) Phase 1 Project (1988 – 1993)

Export training; business Japanese language; inspection andquality control; exhibition training Follow Up Project (1994 – 1995)
 Phase 2 Project (1997 – 2001)

Human Resource Development in Trade Sectors Project
Formulate and device training program RETPCs Project (2002 – 2006)
 Continued cooperation

as a host of various JICA training courses

Source: JICA (2006) et al.

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Export Training

Face to Face Training

Distance Learning

Source: JICA (2006)

Training utilizing IT25

3-iii&iv. WTO, FTA/EPA (Indonesia)a. Study on Capacity Building for Implementation of the
WTO Agreements (2002-2004)• Dispatch Consultants for multiple ministries• Components: Anti Dumping (AD), Trade in Services(GATS), IPR (TRIPS), Technical Barriers (TBT) etc.
• WTO related Pilot Information System Development• Series of Workshops• Follow up Trainings in Japan and Indonesia
b. Training on WTO Capacity Building in Japanc. EPA socialization seminars
d. Project for the Strengthening of the Utilization ofIndonesia-Japan EPA (IJEPA)• Analyzing skill for EPA’s economic impact• Promotion of utilization of IJEPA
26• Management capacity development of IJEPA

3-v. Trade facilitation / trade related systems
a. Study on Trade Related Systems and Procedures(2004-05)• Analysis of cargo and document procedures forimport/export through time study to map obstacles• Master Plan Recommendation and Workshops
b. Project for Improvement of Administration of Trade
Related Regulations, Systems and Procedures(PROTRAF) (2006-08)• Implementation stage targeting at Tanjung Priok Port
• Trade rule book (web-based), productivity
improvement, HRD etc.
c. Project for Capacity Development for Trade-related
Administration (2010-13)• Regulations, database, manuals, dialogues on export
promotion facilities etc.
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3-vi. Other export related assistance
1. Export product competitiveness improvement• Various projects on SME development (cluster
development, design/packaging, SME
management consultant etc.)
2. Export related soft infrastructure• Intellectual Property Rights (IPR), standards &conformance, legal metrology, customs, trade
statistics etc.
3. Export related hard infrastructure• Transport infrastructure (road and port), Special
Economic Zone (SEZ) etc.

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4. Summary and implications
for Ethiopia
A variety of approach for export promotion areavailable: not only incentives and facilities
 Policy framework, export promotion organization,
exporter competitiveness building, hard/soft
infrastructure --- these major pillars should becomprehensively considered Inter-ministerial coordination: as several ministries areinvolved in export promotion
 Export promotion organizations/agencies/directorates:
what form is more appropriate and suitable? Thisshould be carefully considered Capacity building aimed at actual implementation on
the ground Market-oriented and demand-driven
 Promote Ethiopia = promote export!
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Amesegenalew
Thank you

JICA’s VISION
JICA’s“Inclusive and Dynamic Development”

www.jica.go.jp
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