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Session 4: ECONOMIC AND DEVELOPMENTAL OBJECTIVES OF GOVERNMENT PROCUREMENT

Explore the economic and developmental objectives of government procurement, including policy instruments, transparency measures, and market size considerations. Learn about the role of national accounts in GDP calculation and the significance of government procurement in driving economic growth. Discover a range of policy objectives, instruments used, and preferences in procurement processes to achieve both economic and non-economic goals. Delve into specific preferences, tie-break mechanisms, and sources for further insights on government procurement markets.

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Session 4: ECONOMIC AND DEVELOPMENTAL OBJECTIVES OF GOVERNMENT PROCUREMENT

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  1. Session 4: ECONOMIC AND DEVELOPMENTAL OBJECTIVES OF GOVERNMENT PROCUREMENT Dar as Salaam, 14-17 January 2003 Vesile Kulaçoglu, WTO Secretariat

  2. SIZE OF PROCUREMENT MARKETS • POLICY OBJECTIVES • INSTRUMENTS USED • TRANSPARENCY

  3. System of National Accounts GDP = C + I + [X -M] + #inv. G = Consgov + Investgov GDP = Cnon-g + Inon-g + G+ [X -M] + #inv.

  4. Government ProcurementG = CONS + INV Tradable shares(Theoretical)G - Compensation Employees (CE)G - CE - Defence

  5. World GP Market in 1998

  6. Other Countries

  7. POLICY OBJECTIVES • MINIMIZE PROCUREMENT COSTS  Value for money  • ECONOMIC DEVELOPMENT • NON-ECONOMIC OBJECTIVES

  8. ECONOMIC DEVELOPMENT OBJECTIVES  Industrial Development infant-industry Transfer of Technology local content requirements  Offset market failures SMEs

  9. NON-ECONOMIC OBJECTIVES  Support of minority enterprises (affirmative action, women)  Foster environment or labour protection  National security

  10. INSTRUMENTS To attain • objective of value for money  competition  transparency • other objectives  limit competition

  11. Instruments used to limit competition • import bans • preferences in favour of domestic supplies and suppliers (e.g. Buy American Act) • offset requirements • set-asides for SMEs, minority businesses

  12. Instruments used to limit competition • policies favouring a region, labour-surplus areas in national development framework • furtherance of agricultural support and human feeding programmes

  13. PREFERENCES PRICE PREFERENCES • Price differentials varying from 3 to 20% SPECIFIC PREFERENCES • categories of goods and services (syringes, telecom) • sectors of economy (transportation, electricity) TIE-BREAKS

  14. OFFSETS • Local content requirements (% of human resources or domestic inputs) • investment requirements (venture capital) • licensing of technology; R&D • counter-trade • training • sub-contracting

  15. Sources: Slides 3-6 : Denis Audet, OECD Study on Government Procurement Markets, 2002. Slides 7-10: Bernard Hoekman, Word Bank, WTO Symposium in Transparency in Government Procurement, 9-10 October 2002, Geneva

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