SPS Capacity Building: Patterns, Lessons and Unknowns. Mirvat Sewadeh, Vicente Ferrer, and Steven Jaffee Standards Workshop March 2004

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1 SPS Capacity Building: Patterns, Lessons and Unknowns Mirvat Sewadeh, Vicente Ferrer, and Steven Jaffee Standards Workshop March 2004

2 Context Rising demand from clients for TA and C-B support in trade-related SPS management Relatively limited Bank experience (although lots in domestic animal health) Increasing number of donor projects in this area what can we learn from this? Formation of STDF for collaborative work

3 Objective Bird s eye view of experience, drawing operational lessons (for Bank staff) Forward-looking rather than evaluative Fill selected informational gaps (i.e. scope/nature of SPS assistance) Highlight some strategic questions which Bank staff will face in the field(pub/priv; timing/geography/horizontal/vertical)

4 Approach Delphi method Draw upon existing project/program evaluations Discuss with product/program managers and staff Focus Trade (export)-related SPS TA/CB Longer term activities; not one-off events WB, FAO, IDB, UNIDO, USAID/US Gov t, EU, and AUSAID

5 Approach (II) Good cooperation from several agencies But, under-reporting of overall work Few program evaluations and even these were descriptive rather than evaluative So, focus more on individual projects (32); interviews of project staff; project documentation Limited resources, so no field visits severe limitation

6 Big Picture Estimate recent annual disbursements are $70 75 million for trade-related SPS CB, with EU and US the largest donors Compare: estimate value of annual product rejections are $1.5 billion for M-I countries and $275 million for L-I countries Concentrated sectorally fish, hort., livestock, with vertical rather than horizontal focus

7 Big Picture (II) Multilaterals single country projects; many bilateral programs are multi-country Bilateral self interest : plant health, consumer protection, lower frictions with trade partners Little field collab. between multi- and bilaterals; between implem. agencies and financ. agencies. Bilaterals want to make sure systems are compliant with their requirements But why not collaboration of multilaterals?>>stdf

8 World Bank Projects Under Implementation Which Include Components on Trade-Related Agricultural Safety Project Start of Project China Sustainable Coastal Resource Development Morocco Pilot Fisheries Development Uruguay Foot and Mouth Disease Emergency Recovery Niger Agro-Pastoral Export Promotion Senegal Agricultural Export Promotion Tunisia Agricultural Support Services Jordan Horticultural Exports Promotion and Technology Transfer Bosnia Small-Scale Commercial Agriculture Development Peru Trade Facilitation and Productivity Improvement Expected Closing of Project Total Size of Project Loan ($ Millions) Size of Agricultural Safety Components ($ Millions) 2002 Disbursements Related to Agricultural Safety ($ Mill) 2003 Disbursements Related to Agricultural Safety ($ Mill) Industry Focus for Agricultural Safety Support Fisheries Fisheries NA 1.30 Livestock Livestock Horticulture Horticulture NA 0.05 Horticulture NA 0.00 Horticulture N.A. N.A. Varied

9 Some Findings/Interpretations Context Matters: Except in the context of a crisis it is best to address SPS management issues as part of wider competitiveness or agro-food chain modernization strategies Timing and phasing issues: Generic awareness-building not enough. Must be strong determination of impending cost or opportunity Flexible and iterative approach often better than preprogrammed design given uncertainties inadvisable at industry start up when it has yet to demonstrate it can compete on price/quality grounds?

10 More interpretations SPS capacity-building initiatives normally driven by tension crisis, shadow of crisis, or emerging consumer concerns Clear and present danger : focuses attention, breaks institutional/regulatory inertia, and induces more public/private cooperation Yet, crisis management can be very costly (reputation; lost trade). Better to focus on preventative or opportunistic CB in high risk, high gain sectors

11 More interpretations Public sector: can t live with it or without it; essential in some contexts, useful in others yet generic limitations (speed, staffing, budgets). Private sector: growing focus of support; high motivation, technical knowledge, essential in implementation of standards, may be more efficient for certain functions Collaboration/tension between public and private sectors (I) strengthen process of prioritization, (ii) breeds accountability, and (iii) aids sustainability

12 Partnering with the private sector Normally need to address a broader array of competitiveness factors plus address the whole supply chain Pick the winners, the best, the brightest, the most motivated work through them to reach others rather than taking bottom up approaches Effective associations often critical to the success of CB efforts motivating members, collective action in service sourcing and provision

13 Tricky aspects Striking proper balance between public and private sector as focus of support and as means of delivering advisory/training services circumstances vary Sustainability: seemingly not a high priority but important for both private and public sector support. The target must have a financial stake. Need to support capacity to enhance capacity so that we become redundant. Especially important because of repetitive change

14 Special issues for poor/very small countries Generally weak technical/admin capacities Lack of budgetary resources Difficulty of determining/prioritizing needs Little support from international buyers Exceptionally vulnerable to crisis Beyond traditional approaches twinning, regional arrangements

15 Some unknowns Lack of Cost-benefit analysis ex ante Hence, prioritization between different needs tends to be driven by perceived needs (I.e. questionaires) Little ex post review of benefits or cost effectiveness Is rate of return so high that we don t even need to measure it? Can we get away with this approach as we seek to mainstream SPS work in RD and PSD projects? Collectively, we can do much better to understand the economics and impacts of our interventions.

16 Demand for assistance will increase Intensified inspection regimes (more rejections) Likely move toward pre-screening Range/depth of private sector standards Rising south-south trade and standards complications