Contact: expcom@worldbank International Trade Department

1. knowledge learning Operations Tools for Export Competitiveness: Policies and Institutions for Overcoming Government and Market Failures http://competitiveness Mallika Shakya Economist International Trade Department Contact: expcom@worldbank.org International Trade Department

2. Incentive Framework The necessary macro and trade policy Conditions for trade growth Hard and Soft Infrastructure Improving the business enabling environment and Infrastructure for exports • Overcoming market/govt failures • To achieve: Innovation, technology, quality, standards • Global value chain and linkages • Industrial zones and clusters • Export and Investment promotion A Conceptual Framework on Export Competitiveness

3. knowledge learning Operations DTISs - Precursor Work on Export Competitiveness • About 40 DTIS completed so far • Focus on impediments to export growth in LICs • Main findings: • trade policy reforms important, but not sufficient • trade logistics, infrastructure, backbone services • proactive policies and measures to overcome the • government and market failures Contact: expcom@worldbank.org International Trade Department

4. WHY do government/market failures arise? • costs of discovery • asymmetric information • coordination externalities • lack of supporting services for industry • missing public inputs • Note: these will vary for low-, middle-, and high-income countries

5. knowledge learning Operations Contact: expcom@worldbank.org International Trade Department

6. knowledge learning Operations Different types of institutions for a collaborative process Public sector Private sector line ministries business associations lawyers business registrar export promotion arbitrators training institutes investment promotion business service providers standards and certification universities market research agencies innovation and technology foundations IPRs R&D industrial zones EXAMPLES Fundacion Chile Chinese special economic zones Contact: expcom@worldbank.org International Trade Department

7. knowledge learning Role of private sector: • Assess actual risks and take action • Provide relevant info about obstacles and opportunities • Lubricate machineries on the ground to deal with the informal constraints Operations Institutional incrementalism Role of government: • Set policies • Internalize the externalities associated with cost-discovery process • Provide public inputs (infrastructure and backbone services, property rights, harmonization of standards) formal institutions business assoc., parastatals, research institutions informal institutions trust, traditional know-how, social capital search engines little is known ex-ante about instruments; emphasize more on current successes (large buyers, diaspora ventures) to develop broader corrective measures Contact: expcom@worldbank.org International Trade Department

8. Overcoming barriers to export competitiveness: Methodologies are diverse but complementary 1. industry-specific approach for identifying constraints 2. micro-foundations or clusters approach

9. knowledge learning Operations 1. INDUSTRY-SPECIFIC ANALYSES TO IDENTIFY CONSTRAINTS Contact: expcom@worldbank.org International Trade Department

10. knowledge learning Operations INDUSTRY-SPECIFIC ANALYSES TO IDENTIFY CONSTRAINTS - 1 ‘Picking Winners’ vs. working from revealed comparative advantage Source: UN Comtrade Database and FIAS analysis Contact: expcom@worldbank.org International Trade Department

11. knowledge learning Operations INDUSTRY-SPECIFIC ANALYSES TO IDENTIFY CONSTRAINTS - 2 Key findings from MGI’s sector-specific analyses Source: MGI India Study Contact: expcom@worldbank.org International Trade Department

12. knowledge learning Operations INDUSTRY-SPECIFIC ANALYSES TO IDENTIFY CONSTRAINTS - 3 Methodology and information sources for industry-specific analysis Source: Palmade (2005) Contact: expcom@worldbank.org International Trade Department

13. knowledge learning Operations INDUSTRY-SPECIFIC ANALYSES TO IDENTIFY CONSTRAINTS - 4 Big differences in relative sector differences in India Productivity, U.S. = 100 Contact: expcom@worldbank.org International Trade Department

14. knowledge learning Operations INDUSTRY-SPECIFIC ANALYSES TO IDENTIFY CONSTRAINTS - 5 Mozambique Case Study: Policy and institutional measures Apparel Industry • Education/workforce trg • Labor law reform • Specialized infrastructure • Licensing reform • Specialized business services • Tax simplifications • Investment/export promotion • Develop a critical mass of firms for the changes to take place Contact: expcom@worldbank.org International Trade Department

15. Figure 2.1: Hourly wages in apparel assembly (US cents) Ethiopia 14 Ghana 18 knowledge Bangladesh 21 learning Mozambique++ 25 Pakistan 26 Operations Madagascar 26 India 27 Kenya 30 Nepal 31 Swaziland 33 Sri Lanka 35 Lesotho 46 EPZ China 72 Mauritius 125 S Africa 179.4 INDUSTRY-SPECIFIC ANALYSES TO IDENTIFY CONSTRAINTS - 6 Mozambique: Apparel Labor Wages and Productivity (Competitiveness = productivity/costs) Contact: expcom@worldbank.org International Trade Department

16. knowledge learning Operations INDUSTRY-SPECIFIC ANALYSES TO IDENTIFY CONSTRAINTS - 7 Regional Competitiveness of the Mozambican Apparels Contact: expcom@worldbank.org International Trade Department

17. knowledge learning Operations INDUSTRY-SPECIFIC ANALYSES TO IDENTIFY CONSTRAINTS - 8 Mozambique: Policy Implications for Apparels Contact: expcom@worldbank.org International Trade Department

18. knowledge learning Operations 2. MICRO-FOUNDATIONS OR CLUSTERS APPROACH Contact: expcom@worldbank.org International Trade Department

19. knowledge learning Operations MICRO-FOUNDATIONS OR CLUSTERS APPROACH - 1 Contact: expcom@worldbank.org International Trade Department

20. knowledge learning Operations MICRO-FOUNDATIONS OR CLUSTERS APPROACH - 2 Contact: expcom@worldbank.org International Trade Department

21. knowledge learning Operations MICRO-FOUNDATIONS OR CLUSTERS APPROACH - 3 Contact: expcom@worldbank.org International Trade Department

22. knowledge learning Operations MICRO-FOUNDATIONS OR CLUSTERS APPROACH - 4 Contact: expcom@worldbank.org International Trade Department

23. knowledge learning Operations MICRO-FOUNDATIONS OR CLUSTERS APPROACH - 5 Contact: expcom@worldbank.org International Trade Department

24. knowledge learning Operations MICRO-FOUNDATIONS OR CLUSTERS APPROACH - 6 Contact: expcom@worldbank.org International Trade Department

25. knowledge learning Operations MICRO-FOUNDATIONS OR CLUSTERS APPROACH - 7 Contact: expcom@worldbank.org International Trade Department

26. knowledge learning Tour Operators Luang Prabang Vientiane Abroad Local Healthcare Lao Traditional Massage Spa Services Hospitals Tour Guides / Interpreters Operations Local retail, health care, and Media / Information Travel Press Television, Radio Internet Public Relations & other services Market Research Services Local Transportation Taxies / Tuk-tuks Local buses Charter Services River Boats Wats Museums Caves Waterfall Activities Local Transportation Restaurants Specialty Food Suppliers Food Suppliers Shopping Retail Stores Night markets Handicraft Shops Duty Free Souvenirs, Tourists Duty Free Communications Providers Internet Phone Property Airlines, Airlines Airport Buses River Cruises Services Hotels Guest Houses Homestays Villages Financial Services Banks Foreign Exchange ATMs Hotels Domestic Banks, Foreign Exchange Infrastructure Maintenance Utilities Maintenance Services Government agencies NTA Tourism Police Local Tourism Office Immigration Services Customs International Agencies Asian Development Bank, SNV, UNESCO World Bank Industry Groups LATA Hotel and Restaurant Assoc Heritage Committee Education National University (Vientn) Lng Prbg Tourism School Industry Groups e.g. Universities, e.g. Tourism MICRO-FOUNDATIONS OR CLUSTERS APPROACH - 8 Luang Prabang Tourism Cluster Source: Lao PDR Export Competitiveness Report, World Bank, 2005. JAA Analysis. Contact: expcom@worldbank.org International Trade Department

27. knowledge learning Operations MICRO-FOUNDATIONS OR CLUSTERS APPROACH - 9 Source: Lao PDR Export Competitiveness Report, World Bank, 2005. JAA Analysis. Contact: expcom@worldbank.org International Trade Department