Strengthening Linkages and Facilitating Trade, Skills

1
Strengthening Linkages and Facilitating Trade,
Skills Knowledge Transfer--The Potential of
the Diasporas

• Wanja Michuki
• CEO, The Highland Tea Company
• October 6, 2006

2
Facilitating Access of Local Companies to
Overseas Markets
3
What Has Been Done

• Local Trade Assistance Workshops for Value-Added
  Products
• (e.g. USAID Kenyan tea companies textiles)
• Workshops educating local companies on
• Marketing strategies- price, placement, promotion
• Distributors and retailers
• US national trade regulations (FDA, Bio-terrorism
  regulations product classification coding, etc)
• Export Process (shipping clearing)
• Overseas Trade Shows
• Product exposure to the trade (consumers,
  brokers, distributors, retailers)
• Supermarkets and Foodservice tours
• Pre-arranged meetings with distributors

4
What Has Not Been Done

• Product Representation
• No facility created to promote continual
  representation i.e. a point person (s) to engage
  brokers, distributors and retailers in overseas
  markets after workshops and trade shows
• Adequate Market Readiness
• Trade assistance programs do not discuss
  marketing budgets required to support products
  (demonstrations promotional discounts slotting
  fees advertising fees)
• Limited partnership structures that can
  facilitate consumer product exposure (word of
  mouth PR, or media campaigns)
• Sub-par local capacity to produce products at an
  acceptable standard for the American consumer
• Inland Supply Chain Management
• No contacts with warehouses fulfillment centers
  shipping companies resulting in poor distribution
  systems

5
What Is Missing

• Diaspora Participation in Trade Programs
• Diaspora are not included in trade assistance
  programs therefore no cross border linkages are
  established at the end of most trade assistance
  programs to create a foothold in target markets
• Limited formal organization of Diaspora groups
  with aligned trade interests
• Diaspora groups must be self-selecting based on
  time, similar interests and capital availability
  to support ongoing marketing and distribution
• Diaspora groups need to be identifiable and
  easily accessible
• Financial capital for effective marketing and
  product placement
• Timely market-response information and ability to
  respond quickly to market trends (e.g. Fair Trade
  and Organic-mania)
• Limited ability to compete with US-based peers
  due to lack of access to grants or concessions
  that are available to US-companies

6
What should be addressed in policy

• Inclusion of Diaspora (entrepreneurs or
  otherwise) in Trade Assistance Programs
• Establish networks with Diaspora nationals when
  trade delegations come to the US for Trade shows
• Notify Diaspora members when workshops are being
  held in home countries
• Identification and Organization of Diaspora
  Groups
• Overseas representation of local company
  interests tax identification marketing trade
  associations
• Lobbying groups for preferential treatment that
  reduces capital costs of market entry (e.g.
  minority certification status provides exemption
  of slotting fees)
• Linkages to US-businesses in related industries
  through personal and professional networks
• Access to capital
• Provision of a direct consumer base

7
What should be addressed in policycontd.

• Collective organization of Entrepreneurs in Home
  Countries
• Enables economies of scale and shared costs of
  supply chain management e.g. consolidated
  shipping warehousing and fulfillment
• Create marketing and distribution efficiencies
  e.g. presentation of a basket of goods rather
  than specific products to brokers distributors
  and retailers
• Industry promotion within trade missions of
  Embassies
• Industry promotion in partnership with overseas
  marketing agencies that know the markets and can
  position products adequately
• Overseas Financial Assistance or Grant Programs
• Enable effective industry-specific market
  penetration and still promote healthy competition
• Provide incentives for entrepreneurship

8
Tapping into the Diasporas.
Market intelligence, networks, markets, global
partnerships programs with governments and trade
organizations
Create value-adding EX markets
Repatriation of investment funds for
entrepreneurial ventures and/ or value added to
target communities e.g. MDG aligned projects
9
Success Stories
10
Value-addition in EX markets .

Tanzanian Coffee
Kenyan Tea
Ghanaian Chocolate
Zambian Pepper Sauces
11
and the creation of social equity in home
countries
Examples Model Variety
Highland Tea Co. Incorporated in both Kenyan and USA Fair Trade partnership with Kenyan tea farmers
Divine Chocolates Ghanaian-based Fair Trade farmer Co-operative in partnership with UK-based trading company
Elephant Pepper Zambian-based Fair Trade enterprise with US representation
Equal Exchange US-based Fair Trade company with farmer partnerships in Guatemala, Nicaragua and El-Salvador
12

• Meeting MDGs by 2015 will require a more
  productive and profitable agricultural sector

13
Panel Discussion Points

• Placing Social Enterprises on the policy agenda
  of the UN members as powerful agents for the
  attainments of economic and social development
  goals
• Create organizational structures to facilitate
  networking between home country entrepreneurs and
  the Diaspora (and amongst the Diaspora) for
  business partnerships representation and sharing
  of market intelligence
• Governments to create enabling start-up
  environments for social enterprises (e.g. ease of
  starting a business, facilitating exports)
• Governments to provide financial support (e.g.
  small business loans matching of funds) for
  industry-specific export-led growth as an
  incentive for local and Diaspora entrepreneurs

14
Discussion