Strengthening Linkages and Facilitating Trade,
Skills & Knowledge Transfer
-The Potential of the Diasporas
Wanja Michuki
CEO, The Highland Tea Company
October 6, 2006
Facilitating Access of Local Companies to
Overseas Markets
What Has Been Done…
 Local Trade Assistance Workshops for Value-Added Products
(e.g. USAID: Kenyan tea companies; textiles)
-
Workshops educating local companies on:
Marketing strategies- price, placement, promotion
Distributors and retailers
US national trade regulations (FDA, Bio-terrorism regulations; product
classification coding, etc…)
Export Process (shipping clearing)
 Overseas Trade Shows
- Product exposure to the trade (consumers, brokers, distributors, retailers)
- Supermarkets and Foodservice tours
- Pre-arranged meetings with distributors
What Has Not Been Done…

Product Representation
No facility created to promote continual representation i.e. a point
person (s) to engage brokers, distributors and retailers in overseas
markets after workshops and trade shows

Adequate Market Readiness
Trade assistance programs do not discuss marketing budgets
required to support products (demonstrations; promotional
discounts; slotting fees; advertising fees)
Limited partnership structures that can facilitate consumer product
exposure (word of mouth; PR, or media campaigns)
Sub-par local capacity to produce products at an acceptable
standard for the American consumer

Inland Supply Chain Management
No contacts with warehouses; fulfillment centers; shipping
companies resulting in poor distribution systems
What Is Missing…

Diaspora Participation in Trade Programs
-

Diaspora are not included in trade assistance programs therefore no
cross border linkages are established at the end of most trade
assistance programs to create a foothold in target markets
Limited formal organization of Diaspora groups with aligned
trade interests
-
Diaspora groups must be self-selecting based on time, similar
interests and capital availability to support ongoing marketing and
distribution
Diaspora groups need to be identifiable and easily accessible

Financial capital for effective marketing and product placement

Timely market-response information and ability to respond
quickly to market trends (e.g. Fair Trade and Organic-mania)

Limited ability to compete with US-based peers due to lack of
access to grants or concessions that are available to UScompanies
What should be addressed in policy…

Inclusion of Diaspora (entrepreneurs or otherwise) in Trade
Assistance Programs
- Establish networks with Diaspora nationals when trade delegations
come to the US for Trade shows
- Notify Diaspora members when workshops are being held in home
countries

Identification and Organization of Diaspora Groups
- Overseas representation of local company interests: tax
identification; marketing; trade associations
- Lobbying groups for preferential treatment that reduces capital
costs of market entry (e.g. minority certification status provides
exemption of slotting fees)
- Linkages to US-businesses in related industries through personal
and professional networks
- Access to capital
- Provision of a direct consumer base
What should be addressed in policy…contd.

Collective organization of Entrepreneurs in Home Countries
- Enables economies of scale and shared costs of supply chain
management e.g. consolidated shipping; warehousing; and
fulfillment
- Create marketing and distribution efficiencies e.g. presentation of a
“basket of goods” rather than specific products to brokers;
distributors; and retailers

Industry promotion within trade missions of Embassies
- Industry promotion in partnership with overseas marketing agencies
that know the markets and can position products adequately

Overseas Financial Assistance or Grant Programs
- Enable effective industry-specific market penetration and still
promote healthy competition
- Provide incentives for entrepreneurship
Tapping into the Diasporas….
Diaspora
Nationals
Market intelligence, networks,
markets, global partnerships;
programs with governments and
trade organizations
Create value-adding EX markets
Entrepreneurs
Repatriation of investment
funds for entrepreneurial
ventures and/ or value
added to target
communities e.g. MDG
aligned projects
Success Stories
Value-addition in EX markets ….

Kenyan Tea
Ghanaian
Chocolate
Tanzanian Coffee
Zambian
Pepper Sauces
…and the creation of social equity in home countries…
Examples…
Model Variety
Highland Tea Co.
Incorporated in both Kenyan and USA; Fair
Trade partnership with Kenyan tea farmers
Divine Chocolates
Ghanaian-based Fair Trade farmer Co-operative
in partnership with UK-based trading company
Elephant Pepper
Zambian-based Fair Trade enterprise with US
representation
Equal Exchange
US-based Fair Trade company with farmer
partnerships in Guatemala, Nicaragua and ElSalvador
Meeting MDGs by 2015 will require a more productive and
profitable agricultural sector…
MDG 8:
Global
Partnership
MDG 1:
Poverty
& Hunger
MDG 7:
Environmental
Sustainability
MDG 6:
HIV AIDS
& Malaria
Agriculture
MDG 5:
Maternal
Health
MDG 2:
UPE
MDG 3:
Gender
Equality
MDG 4:
Child
Mortality
Panel Discussion Points…
1.
Placing Social Enterprises on the policy agenda of the UN
members as powerful agents for the attainments of
economic and social development goals
2.
Create organizational structures to facilitate networking
between home country entrepreneurs and the Diaspora
(and amongst the Diaspora) for business partnerships;
representation and sharing of market intelligence
3.
Governments to create enabling start-up environments for
social enterprises (e.g. ease of starting a business,
facilitating exports)
4.
Governments to provide financial support (e.g. small
business loans; matching of funds) for industry-specific
export-led growth as an incentive for local and Diaspora
entrepreneurs
Discussion