Sin t

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NOT AN OFFICIAL UNCTAD RECORD
ENERGY CLUSTERS AND SERVICES A STRATEGY FOR
DIVERSIFICATION AND SUSTAINABLE DEVELOPMENT IN
OIL EXPORTING AFRICAN COUNTRIES
AN APPROACH TO TRADE LIBERALIZATION AND WTO
NEGOTIATIONS FROM AN OIL EXPORTING COUNTRY
PERSPECTIVE
Werner Corrales-Leal UNCTAD-Global Programme on
Globalization, Liberalization and Sustainable
Human Development Marrakech, April 2004

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LIST OF CONTENTS

• An approach for making trade integration
  supportive of development.
• Market-friendly active policies for development
  An illustrative case in the Venezuelan Oil
  Sector.
• Appendix Illustrations of the links between
  effectiveness of development strategies and WTO
  rules

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PART ONE

An approach for making trade integration
supportive of development
Trade-supported Development Strategies
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An approach for making trade integration
supportive of development
SOME IMPACTS OF LIBERALISATION ON DEVELOPING
ECONOMIES WORTH TO CONSIDER

• Specific impacts on the productive bases of
  developing countries

• Net positive creation of trade trade flows grow
  faster than GDP

• Natural advantagesconfirmed as bases for
  further specialization

• Most trade and FDI flows occur within TNC
  chains and networks

• 40 of K flows to arbitrage high proportion of
  FDI does not generate X

• 90 of K flows to twenty emerging markets (50
  in the 80s)

• Success story of a few countries Active
  policies for competitiveness

• Impacts on inequalities, at international and
  country level

• LDCs marginalisation no sign of convergence
  uneven Welfare Gains

• External shocks financial volatility, declining
  and unstable X prices

• Destruction of traditional SMEs networks with no
  substitutes

• Precarious employment conditions become
  structural after Adjustment

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An approach for making trade integration
supportive of development

GUIDELINES FOR A DEVELOPMENT-SUPPORTIVE
INTEGRATION IN THE GLOBAL ECONOMY

• Objectives in the three spheres of Sustainable
  Development

• Macroeconomic and international finance
  orientations

• Aims and strategic guidelines for
  trade-supported policies

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An approach for making trade integration
supportive of development
THE NEED FOR ACTIVE POLICIES FOR DEVELOPMENT IN
OIL-EXPORTING COUNTRIES

• Reduce dependency on current trade in commodities

• Basis and intensity of competition erodes
  capacities for reinvestment

• Commodity production has very limited networking
  or spill-over effects

• Promote effective tech transfer and increase
  internal multipliers

• Global Chain Optimisation Promote Clusters
  and insertion to Chains

• Motivate and promote domestic RD and
  Technological Capacity Building

• A Levelled playing field to negotiate
  alliances and complementarities

• Modify dynamics of investment affected by the
  Dutch Disease

• Modify trends extreme productivities and
  exchange rate appreciation

• Incentivate Investment towards higher value
  added goods services

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An approach for making trade integration
supportive of development
MANAGING TRADE INTEGRATION AFFECT THE RATIONALE
OF TRADE SURPLUS APPROPRIATION

• Impinge on factors explaining growth in revenues
  and competitiveness

• Active policies affecting Static factors
• Export growth based on market access
• Rents related to productivity, based on Best
  Global Practices
• Productive linkages and networking enhancing
  domestic multipliers

• Active policies enhancing Dynamic factors (
  Rents related to innovation )

• Knowledge-enhanced productivity Innovation in
  processes and attributes
• Strategic marketing differentiation life
  cycles of products..

• Relieve constraints for adding value or
  appropriating trade surplus

• Effective market access Ease traditional
  barriers and improve access to GVCs

• Diversification Move away from extreme
  competition in commodities

• Negotiations in Policy Space Level the playing
  field for Supply-side Policies

• Networks and institutions Frameworks for
  learning and multiplying effects

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An approach for making trade integration
supportive of development
MANAGING TRADE INTEGRATION
RELEVANT POLICY AREAS AND ENABLING FRAMEWORKS
NATIONAL ENABLING FRAMEWORKS
ACTIVE AND REGULATORY POLICIES (THE TOOL BOX)
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An approach for making trade integration
supportive of development
COMPONENTS AND AIMS OF AN INTEGRATED
TRADE-SUPPORTED DEVELOPMENT STRATEGY

• Trade-related policy areas

• Strategic Policy Goals

Enhance social effectiveness of economic policy
ENTERPRISE DEVELOPMENT AND CLUSTERING,
PRODUCTIVITY INVESTMENT POLICIES
Improve internal multipliers of export-led growth
Improve productivity through technology
innovation
KNOWLEDGE, INNOVATION SYSTEMS
TECHNOLOGY TRANSFER POLICIES
Enhance market access and defense capabilities
Secure equilibrium and stability in in external
flows
POLICIES AND RULE MAKING IN INTERNATIONAL
TRADE AND INTEGRATION
Increase knowledge value diversification in
exports
Environmental concerns as cross-cutting policy
issues
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An approach for making trade integration
supportive of development
SOME OPPORTUNITIES FOR SUPPLY-SIDE POLICIES
CONSISTENT WITH CURRENT WTO RULES

• Market consistent investment-related policies
  for competitiveness

• Conditioned access to FDI, as benefit in
  sectors reserved for national investment

• Focalized promotion incentives to ToT, RD,
  Clustering and SME development

• POE procurement promoting technological capacity
  building and SMEs clustering

• Coordinated implementation of IPR , competition
  rules and RD programmes

• Multilateral disciplines and issues involved in
  the immediate future

• Subsidies (dual pricing in gas) tariffs
  tariff binding for value-added goods

• Performance requirements for ToT, domestic
  capabilities development clustering
• Energy services and GATS rules in general

• Special and Differential Treatment Spaces for
  Development Policies in general
• Eventual negotiations on investment, public
  procurement and competition

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An approach for making trade integration
supportive of development
LINKAGES IN THE TWO DIMENSIONS OF TRADE AND
DEVELOPMENT POLICIES
SUPPLY SIDE TRADE-SUPPORTED POLICIES
DEMAND SIDE TRADE-SUPPORTED POLICIES
NATIONAL POLICIES FOR INTERNATIONAL TRADE AND
INTEGRATION
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PART TWO

• Market friendly policies for development
  An illustrative case in the Venezuelan Oil Sector
  

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The use of Market-Friendly Active Policies, a
case of the Oil Sector in Venezuela
1980 MAIN CHALLENGES IN THE SECTOR RELATED TO
TECHNOLOGICAL CAPABILITIES

• Strategic need to reduce Technological
  Dependence on TNCs

• Pre-existing contracts for the provision of
  technology and engineering

• Only 15 of the engineering capital goods
  procurement was national

• Objective shortages in Technological
  Capabilities in the Country

• Almost inexistent RD Capabilities in the sector
  (PDVSA or elsewhere)

• Only 5 construction management firms capable of
  major assignments

• About 20 engineering companies for projects of
  medium complexity

• Doubts and confidence after only 5 years of the
  nationalization

• Public doubts about the success of the Capacity
  Building Program

• Decision to face the program on a Market
  Friendly basis

• Firm commitment of PDVSA and the Venezuelan
  private sector

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The use of Market-Friendly Active Policies, a
case of the Oil Sector in Venezuela
THE STRATEGY FOR CAPACITY BUILDING IN RD,
ENGINEERING AND CONSTRUCTION SERVICES

• Creation of a High Quality Research
  Development Organization

• Creation and development of INTEVEP

• Establishment policy for Transfer of Technology
  on Commercial Basis

• Massive program for training human resources in
  research fields

• Promotion of Capital Goods Manufacturing and
  Service SMEs

• Implementation of Quality Assurance and
  Competitiveness Programs

• Export Promotion Program

• Incentives for Chains of Suppliers Development
  Programs

• Promotion of Engineering and Construction
  Management firms

• Non Mandatory Performance Requirements for Joint
  Ventures

• Reform of Contracting Practices introducing
  Project Disaggregation

• Continuous Improvement and Quality Control
  Practices in all Contracts

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The use of Market-Friendly Active Policies, a
case of the Oil Sector in Venezuela
LONG TERM EVOLUTION OF THE ENGINEERING AND
CONSTRUCTION SERVICES 1980 - 2000

• Very high improvement in Technological
  Capabilities

• Highly skilled jobs,sources of Added Value and
  backward links created

• Further evolution of Engineering Construction
  to Integrated Services

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PART FOUR
Appendix Illustrations of the links
between effectiveness of development strategies
and WTO rules
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The links between effectiveness of strategies
and WTO rules
ILLUSTRATION OF LINKS IN A TRADE-SUPPORTED
STRATEGY FOR OIL- EXPORTING COUNTRIES
SUSTAINABLE DEVELOPMENT OBJECTIVES
POLICY GOALS OF OIL EXPORTING COUNTRIES
WTO FRAMEWORK OF RULES
Support micro-enterprise coops networks
output growth upgrade
Support and actively enforce environmental
adequacy of industries