Bolivia is Dying on Us Again: How to Export (II) | Bolivia se nos vuelve a morir: cómo exportar (II)

By Oscar Antezana, El Día:

The previous article clearly set out the need — the “why” — to urgently increase exports. Let us now look at some elements of the “how.”

“An export-led growth strategy must be designed and executed considering that it is companies that have to respond to economic policies and/or market signals” (The Magic of Exports, 1993). It continues: “The real implementation of this strategy will not occur automatically or simultaneously throughout the entire economy. Besides the lack of technological, market, and business knowledge in most Bolivian firms to compete in the world market, there is also a lack of capacity to group and transfer those same elements that are necessary to boost exports.” Which elements? The book describes:

Production and marketing capacity. To have real possibilities of competing and winning a market, volume, price, standardization, quality, content-requirement specifications, and the seasonal availability of many products are some of the critical factors determining the likelihood of success. Given the limited knowledge and/or lack of experience on one side, and the absence of an “export culture” on the other, it is very difficult for a company or individual to carry out all this research work first, and execution later, without expert support. If they manage to do so, the cost is extremely high — enough to discourage any further attempt.

Capacity to assemble and develop a package consistent with available physical and financial capacity. Identifying the potential importer or market must go hand in hand with the exporting company’s capacity to meet the requirements of quantity, quality, and price. In other words, the company has to find an importer that matches its management, production, marketing, and financing capabilities, and grow accordingly. Otherwise, it will be difficult to start and sustain a competitive offer in a way that generates trust in the importer and reduces transaction costs.

Greater access to information. Beyond the general information that can be obtained from export directories — which are not even disseminated in a timely or personalized way — from commercial attachés who know little beyond the essentials (even less nowadays), from export-supply databases that may have more academic than practical use, and others, the beginning exporter requires more specialized information. For example: What are the entry procedures for fresh products into Europe? Who and how can inspect an export product grown in Potosí? What are labeling regulations in China? This practical information is not found in a book, and if it is, it is very time-consuming to find and often hard to understand. Although the internet and Artificial Intelligence have greatly facilitated these processes, not everyone has access, understands them, or knows what to ask and/or how to interpret the answers. As in everything — and even more in a country that lacks an export culture — these may be insurmountable barriers that discourage the producer.

Who can provide this package of critical factors necessary to enter the international market? It should be a small and efficient structure led by or within the Ministry. Years ago there was INPEX (National Institute for the Promotion of Exports), which did not work well due to lack of institutional and technical capacity, financing, and political support. Under current circumstances — and for many years, if not decades — exports should be a priority in a government plan (we already know what it is like not to have dollars in the economy, and we cannot live off external debt). Experts are needed in several sectors, knowledgeable about supply and demand capacities for key products. Moreover, in some cases it may even be necessary to hire them abroad and begin a process of “know-how” transfer at the same time. This organization must be protected from political and partisan swings because exporting requires consistency, stability, and continuous improvement. The export sector and its entire institutional infrastructure must be up to the level required to compete in the world market — that is, to face the demands, dynamism, and professionalism required for success. There are many other elements that, once again, do not need to be reinvented. Other options exist; for example, assigning the execution of a technical assistance program to one or two international brokers specializing in the commercialization of products similar to Bolivia’s current and potential export supply. Simply copying (which is not a bad thing) and adapting what has been done in Peru, Colombia, or Chile would represent a significant step forward.

Finally, there are other instruments such as free-trade zones, temporary international protection regimes for exports, and other incentives that are beyond the scope of this article and deserve further study.

Exports are carried out by the private sector, but the conditions — and clear political leadership with goals to be met and without professional pettiness — are indispensable.

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