Offering Assistance

Offering Assistance to Developing Countries to help them conform to International Standards

For many companies in LDCs, the key to success in their export endeavours is the ability to produce commodities in compliance with international market requirements:

• Quality requirements
• Food safety requirements
• Environmental standards
• Social accountability standards
• Product specifications

UNIDO’s activities aim at establishing and strengthening of local standardization bodies:

• Establishment of a national/regional standards standardization body
• Development of a national/regional metrology system
• Development of a certification/conformity assessment system
• Development of an accreditation system

Expanding and Diversifying Exports

Agro-based industries are the key areas of competitive advantage in LDCs. However, agro-processing industries in LSCs are highly underdeveloped. High post-harvest losses are caused by the lack of storage, preservation and processing facilities. In order to expand and diversify exports, LDCs have to focus on developing productive packaging industries and transport facilities. Developments in these areas would allow LDCs to take advantage of the increasing demand for fresh agricultural products in industrialized countries.

Taking Advantage of Preferential Market Access Initiatives

Most-favoured-nation (MFN)
For all trade advantages in developing countries and economies in transition, it is vital that these countries work towards a Most-Favoured Nation (MFN). In essence, no one receiving nation will be treated worse than any other nation with regards to tariff and trade agreements. By achieving MFN status the country's economy and trade will benefit.

Everything-but-arms (EBA) and Africa Growth and Opportunity Act (AGOA)
The European Union's Everything but Arms (EBA) Initiative and the United States' African Growth and Opportunity Act (AGOA) and have been established to provide eligible sub-Saharan African (SSA) countries and the Least Developed Countries (LDC) quota free Duty free access to US and EU markets. UNIDO's thematic priority on Trade Capacity Building highlights the increasing importance of South-South investment.

Decreasing Export and Import Costs

Shipment delays and insufficient harbour infrastructures make it impossible for LDCs to export time-sensitive goods, which call for faster and more flexible logistics requirements (e.g. perishable agricultural products). Even non-perishable products, such as apparels, tend to have a highly volatile market demand.
Investment inroad and harbour infrastructure would improve transport capacities. Further, LDCs should focus on exporting products to neighbouring countries, which would reduce export costs tremendously, especially for landlocked countries. UNIDO’s South-South cooperation focuses on promoting regional trade and regional cooperation.

Reducing Administrative Procedures

The reduction of administrative procedures is vital to reduce shipment delays. Governments have to streamline and simplify administrative modalities.

Areas of Comparative Advantages

Lower wage costs and natural resources are no longer areas of decisive comparative advantage. In order to stay competitive in the international business environment, LDCs have to focus on comparative advantages in manufacturing, processing, skills training, innovation, and in industrial modernization and upgrading. Further, quick response to rapid changes in technologies, fashion trends and consumer preferences is equally important.

Improving the Investment Climate and the Local Financial System

Providing a sound investment climate for foreign investors is a key prerequisite for productive capacity-building. As foreign investment is an integral part of the capacity-building process, an efficient domestic financial system is required to allocate funds and revenues in the most cost efficient manner.

Small and Medium Enterprise Development

To ensure sustainable industrial development and productive capacity-building, LDCs have to establish small and medium enterprise (SME) development frameworks. The local SME development strategy should focus on SME upgrading initiatives and on the development of SME clusters. Business clusters enhance the companies’ productivity and make them internationally competitive. UNIDO’s assistance focuses on the promotion of export clusters and consortia.