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Case story on Aid for Trade and SVEs

Explore the journey of Caribbean rum producers in overcoming challenges of trade liberalization with a €70 million EDF Programme, enhancing competitiveness to target luxury markets, and valuable lessons for similar initiatives.

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Case story on Aid for Trade and SVEs

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  1. Case story on Aid for Trade and SVEs The Caribbean Rum Programme Kathleen Van Hove, Senior Policy Officer, ECDPM Quentin de Roquefeuil, ECDPM

  2. Background • Caribbean Rum Producers loosing preferential access to the EU market. • Concerted lobby effort by Caribbean rum producers, governments and regional negotiators for appropriate response • December ‘99: EU commits to finance “an integrated sector specific programme for the development of ACP exporters of rum”. • €70 Million 8th EDF Programme over 7 years. • A succesful case of private sector support facing challenges of trade liberalisation.

  3. Programme architecture • Enhance competitiveness and profitability of Caribbean rum sector, by assisting them in transition from production/export of bulk rum to high quality-high value branded rum • Three specific objectives: enhancing competitiveness, creation of a distinctive Caribbean Rum Marque, design and implementation of marketing campaigns. • Four elements of the programme: Cost sharing grant scheme 46,6 mn Caribbean Rum Marque 16,9 mn Support to WRISPA 3,5 mn Technical assistance. 2,1 mn

  4. Rationale behind the architecture • Context of liberalisation and increasing competition. • A clear vision of the sector’s future, based on a coherent analysis of market trends, lead the adjustment process. • Vision/objective: moving away from bulk and undifferentiated production and targeting “luxury” markets with differentiated products.

  5. Factors for success • Private sector ownership of the programme throughout all stages of the process • Technical assistance provided to regional industry association. • Constant dialogue with target beneficiaries who had full trust and confidence in WRISPA • Dedicated grant facility for SMEs with lighter procedures. • Development of business plans as a prerequisite for accessing funds.

  6. Lessons for other AfT programmes Lesson one: vision & audacity • External assistance cannot be a substitute for visionary industry leadership, which was based on understanding of changing market conditions and scope for market-led policy and programme response • The level of donor co-financing by the EC should be sufficiently high to foster a risk-taking, demand driven and market led adjustment process.

  7. Lessons for other AfT programmes Lesson 2: role of and dialogue with stakeholders • Devolve design, management and implementation to the industry association (state/REC as facilitator rather than driver). • Help the private sector with business plans, aid procedures and consolidate industry association. • A continuous dialogue with stakeholders helps to identify problems early and speeds up their resolution.

  8. Lessons for other AfT programmes Lesson 3: Built-in flexibility • Deal with tendering and procurement issues up-front • Make sure that local accountancy systems match donor “paper trail” requirements (a manual of best practice) • Flexibility at the design stage so as to permit shifting the allocation of funds between various components of the programme. • Adjustment takes time, and might require the programme to be prolonged.

  9. Thank you www.ecdpm.org/dp97 www.ecdpm.org/dp52 www.cta.int www.wirspa.com For further information: kvh@ecdpm.org or qd@ecdpm.org

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