Recently the Georgian National Investment Agency launched the internet portal Trade with Georgia. This internet page aims to facilitate exports by providing information to Georgian firms on export procedures and regulations, and by providing potential foreign buyers with a database of Georgian products.
The customs reforms that lowered and abolished import tariffs, and reduced bureaucratic import procedures are well-known; at the same time export procedures have also been simplified. Of course one obstacle remains: Georgia can reform its export procedure, but it has little say on the corresponding import tariffs and bureaucratic procedures and regulations of partner countries.
In the World Development Report 2009 (page 251), the World Bank reports on an interesting export facilitation project in Peru:
In many countries small enterprises are often excluded from export chains because they operate in villages or small towns or do not have the needed information to export. In Peru a trade-facilitation program called “Easy Export” connects small producers to markets. The key to this program is the most basic of transport networks—the national postal service.
How does it work? An individual or firm takes a package to the nearest post office, which provides free packaging. The sender fills out an export declaration form, and the post office weighs the package and scans the export declaration form. The sender pays the fee for the type of service desired. Goods with values of $2,000 or less can be exported. The main benefit is that the exporter does not need to use a customs agent, logistics agent, or freight forwarder or to consolidate the merchandise; even the packaging is provided. Firms or individuals need only to go to a post office with a scale and a paper scanner and to use the Internet to complete the export declaration for the tax agency.
Has it made a difference? Within six months of inception, more than 300 firms shipped goods totaling more than $300,000. Most users are new exporters—micro entrepreneurs and small firms, producing jewelry, alpaca and cotton garments, food supplements (natural products), cosmetics, wood art and crafts, shoes and leather, and processed food. And many of them are in the poorest areas of the country
While the aggregate impact might be small, it can make a difference for small firms or individual entrepreneurs. One might question whether the Georgian Postal Service is capable to provide such services, especially in rural communities. One could also question whether small producers are capable of overcoming formidable barriers such as phyto-sanitary regulations or the lack of information on Georgian products. Nevertheless such a project could work if government agencies provide services which small firms and individual entrepreneurs are not capable of providing: marketing, dissemination of information and quality certification for agricultural products.
Comments
Smart move by Peruvians! And indeed a good idea for Georgia. Small entrepreneurs could use large number of emigrated relatives/neighbors to set up distribution channels in receiving countries.
But, indeed, Georgian Post needs to improve the services and I guess we also need higher internet penetration levels (perhaps more competition in the industry could help here) in order for this program to become significant.
The role of the Georgian Postal Service is actually interesting. Georgia seems to have adapted to a de facto non existing mail service. But that's actually good as mail service is dying around th world, and it would allow the Georgian Post to leapfrog. Package delivery seems to be the future, although the bad news is probably that DHL, USA2Georgia etc have cornered that market already.
Definite potential! There is unquestionably a demand for Georgian tea in Ukraine. I normally bring at least 3-4 large boxes with me when I go home.
About 25 years ago I was (informally) employed as a seasonal worker in the Israeli flower industry. Put simply, I was employed by a small farmer who had about 1/2 hectare plot of wax flower. (http://en.wikipedia.org/wiki/Chamelaucium). I was the only worker on the whole plot and my job was to pick the flowers, sort them by length, tie them in bunches of 5, 25 and 125, and store them in a cool place. When I had enough buckets, I would call my employer, he would call a telephone number in the Israeli flower growers association and a huge refrigerator truck would appear at the farm gate in the evening. I would help package and load the flowers on the truck and that was it. The truck would take the flowers to the Ben Gurion Airport and from there they would be transported to Holland and sold at the international flower market. Money would be transferred to the Israeli flower growers' association, which would retain a small % for handling the whole transaction. My boss would get his paid and, eventually I would get my check as well.
I would call that trade facilitation through collective action. . Efficient and powerful. As much as trade liberalization is important, it is not a sufficient condition for international trade (in particular, exports) to happen. The small producer needs help and such help can come from collective action, whether mediated and coordinated by the state, or not.