ITC Export-led Poverty Reduction Programs

UNCLAS GENEVA 000273

SIPDIS

DEPT for IO/EDA, EEB

E.O. 12958: N/A
TAGS: ECON EINV EFIN
SUBJECT: ITC Export-led Poverty Reduction Programs


1. SUMMARY: The International Trade Centre (ITC) is achieving
results with its Export-led Poverty Reduction Program (EPRP),which
focuses on encouraging sustainable development through the creation
of exports, including tourism. The EPRPs measure effectiveness by a
program that incorporates three series of household surveys to
ensure sustainable benefits to recipient households. EPRP projects
are deployed in 18 countries for a total cost of USD 9.5 million.
END SUMMARY.

ITC mission
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2. Fabrice Leclerq and Marie-Claude Fraunrath (representing the
ITC) met with Ann Low (First Secretary, US Mission to the United
Nations, Geneva) on March 18, 2009, to discuss ITC's export led
poverty reduction program (EPRP) and its impact assessment tool,
which measures via household surveys to what degree households
enrolled in the program improve their standard of living over the
4-5 year life of the EPRP. The ITC had the Overseas Development
Institute (ODI) conduct a study on the relationship between trade,
growth, and development and the effectiveness of the ITC EPRP. The
outcome of the ODI study encouraged ITC to pursue tourism promotion
based on the EPRP model. The ITC aim is to address Millennium
Development Goals (MDGs) 1, 3, 7, and 8 (end poverty and hunger,
gender equality, environmental sustainability, and global
partnership) in its projects. ITC is currently undertaking 15
projects, each with a staff of 1 to 2 international consultants
working with 3 to 4 national consultants.

Export-led Poverty Reduction Program
--------------

3. The ITC's EPRP promotes exports in sectors that maximize jobs
and income for small-scale producers. The ITC develops marketing,
management, and networking opportunities to small communities that
wish to trade. The ITC has implemented EPRPs in 18 countries, (3
programs have been completed and are now self-sustaining)
benefitting the livelihood of 38,000 people. The ITC works in
tandem with capacity building projects by bringing in an ITC
consultant and pairing him with a national consultant. This
capacity building is often assisted with use of specialists to help
train the local population in handiworks, hospitality, and other
industries. The ITC maintains involvement and project quality by
following up with the international and national consultants
throughout the life of the projects.

Tourism as an export
--------------

4. The ITC views the tourism industry through the same lens as
exports and is working within this framework to reduce poverty via
sustainable tourism that benefits the local community living where
the tourism occurs. The tourism-led poverty reduction program
(TPRP) encourages sustainable development by including local
partners as stakeholders. ITC has received financial support from
the Swiss Economic Cooperation Organization (SECO) for tourism-led
poverty reduction programs in Senegal, Mozambique, and Columbia.
Aussie Aid and New Zealand Aid have asked the ITC to replicate the
tourism promotion programs in Asia. After a successful TPRP in the
Philippines, the Philippine Department of Tourism has asked the ITC
to help develop an eco-tourism program. The ITC is partnering with
the Four Seasons to build local supply capacity so that the Four
Seasons can use local products and services in their resorts.

Brazil model used as best practice
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5. The TPRP was successfully implemented in Brazil with the
Brazilian Inclusive Tourism (BIT) project, starting in 2003.
According to Leclerq, Group Banco de Santander (a Spanish bank)
wants to finance the development of 200km of coastline for up to 20
resorts encompassing 18,000 rooms, to be completed in 2012 using the
same TPRP model as the BIT. The focus of the Brazilian project will
be hotel- and agriculture-related activities. Group Banco de
Santander will benefit by making credit facilities available to the
cooperatives. The initial plan is issue credit cards with 2 percent
of the interest going to the ITC programs. ITC is trying to make
this work within the UN framework as a public-private partnership.
The total cost for the BIT was USD 300,000 matched on a 1:1 ratio
with the local donors over a five year period. The investment in
training local staff in handiwork production and marketing led to a
500 percent increase in handiwork revenues. The BIT program also
includes using local agricultural products such as honey, fruits,
and vegetables in the resorts, while ensuring sustainable farming
practices.

Challenges
--------------

6. The ITC is facing challenges in securing funds and assistance in
implementing their programs. The contributions from SECO, Norway,
Germany, and others have worked for individual projects, but still
fall short of full operating capacity. Ms. Low suggested bringing
the program to the attention of countries that are developing
compacts under the Millennium Challenge Corporation (MCC) program.
Mr. Leclerq responded that the ITC has pursued funding through the
MCC on two occasions, but have been unsuccessful. While the MCC
staff is impressed with ITC programs, when working through the
resident coordinators of countries applying for MCC monies, ITC
programs do not get included in the final compact proposals. Ms.
Low suggested ITC present its programs not just to the resident
coordinator in countries applying for MCC monies, but also directly
to the government officials in those countries responsible for
elaborating the compact proposal. Leclerq asked if the government
contact points were published.


7. Leclerq also aired his frustration with the United Nations
Development Programme (UNDP). According to Leclerq, ITC lost USD
20,000 worth of pumps in Ethiopia because UNDP, which was the
recipient, failed to go to the airport to clear the pumps through
customs. In Vietnam, UNDP took 14 months to release funds for
purchase of laptops.

Impact assessment
--------------

8. The ITC incorporates an extensive impact assessment program into
all of its projects. The assessment program is based on a series of
household surveys over the life of the project, the results of which
are compiled into a data analysis program. The household surveys
are conducted at the initiation of a project to create a baseline
after 2 years, and in the last year of the project, which is the
fourth or fifth year of the project. The household surveys are done
by nationally employed staff who interview the families involved in
the project. The surveyors typically have greater than a high
school education and earn USD 100-200 per month. The assessments
are conducted in 50 out of 200-250 households and usually take 2
months to complete. The total cost to do all three household
surveys for one project including IT work to analyze their results
is USD 7200. The average total cost of implementing an Export-led
Poverty Reduction Project is USD 400,000 over a four-year project.
Part of the impact assessment process also includes adapting the
program after two years to better respond to the households' needs.


Impact assessment in India
--------------

9. At the start of an EPRP project in India with 300 farmers'
households participating, the households earned USD 200k for selling
organic spices in 2000 (on average USD 666/household). After four
years the EPRP project had grown to include 1,500 farmers'
households and they earned USD 1.5 million in 2004 (on average USD
1,000/household, a 50 percent gain per farmer). ITC organized the
farmers into cooperatives to represent and market their products at
Biofach, the organic trade fair in Germany. The Indian EPRP project
used World Bank funds and cost in total over the four year life of
the project, $250k. The farmers are self-sufficient, and their
association pays for representative(s) to attend the annual Biofach
trade fair.

Comment
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10. The ITC performance of five-year reviews on all projects, which
includes 3 different surveys of the project, has proven to be a
valuable tool for ITC to ascertain project sustainability. If a
project is not working, ITC knows it should seek to implement a
different program. Success also depends on developing a tailored
approach to each project to respond to community needs. Given
challenges such as UNDP missteps, ITC could probably benefit from
greater contact and support from posts in the countries in which it
operates.

STORELLA