 Thank you so much. So now we've got almost a full half hour for a discussion Do we have any questions to start off? Let me I'll collect three or four questions, and then we'll go back for a second round. Yes, the woman in the back Good afternoon. I just want to thank all the presenters is really interesting. My question is related to the last presentation I realize this question is not, you know related to your topic, but it's something I'm more curious about reflecting on kind of state business relationships that we've heard a lot about and How Rwanda does constantly well on the doing business surveys, but I'm not sure how that reflects You know in terms of the firms you've mentioned in terms of the exporting So if you could just give us some insights in that like there's kind of the impact of state business relations on Rwandan firms Actually, let me ask you to introduce yourself as well. Sorry. Sorry. My name is Aradha and I'm with the Institute of Development Studies In the University of Nairobi with Professor Dorothy McCormick. Thank you Okay, the woman in the front Yes, hi, Lindsay Whitfield Ross Gildey University did mark. I have a few questions For the Rwanda presentation and a comment about the apparel one I don't I'm not that familiar with the learning to export Project and this is my first panel. So maybe I'm missing something But I just thought maybe it would be useful to reiterate in the project You know why is exporting important and from the literature? I know it's usually to access higher profits because of the payment in those markets to export more And to build technological capabilities and in that sense, I would think that you would have differentiated export markets and that would have really in a way Made some of these points not important because you wouldn't have been looking to learn through exporting to To regional markets if they don't have those kind of characteristics The other is that when you say the learning by exporting literature Are you including global value chain literature? Because I know that economists don't always talk to that literature and actually it would have solved a lot It would bring up a lot of These issues I think, you know, how do you learn and Technological upgrading and how export markets force that on you And I don't see any of that coming coming I'm just wondering if that's included when you talk about what the literature says And then lastly on the supply constraint I think this is really important and really important for for African countries the work I've done in Ghana on horticulture export market and other agro based and the supply side is actually the most important constraint in accessing because if you cannot deliver and again This is the global value chain literature would tell you if you can't deliver a consistent quality in high volume amount of products then you can't participate in an export markets and The issue on supply is that most African countries have smallholder based production So you have issues of how do you increase productivity of smallholders? How do you do collective action problems if they're going to export directly? Then you have issues of outgrow screens You have issues of contract enforcement and and the not talked about but very important problem of land Tenure institutions and access these are the fundamental problems constraining Agriculture and agro processing and they really do matter for export markets as well And I think this is important because if you take the literature of Carlotta Perez It says actually agriculture is becoming decommoditized and there are high rents to be accessed in these markets And African countries really have to address these these issues So to me, it's not a surprise that the constraint is on the supply side in agriculture And at risk of actually taking it more time. I just wanted to raise a quick point I think the apparel industry is very interesting Dorothy But I was surprised that you didn't give more history to what was going on because I think it's important to realize that quotas in preferential market access has has shaped Global apparel markets since they're very beginning and they've also Driven the dispersion of productive capabilities across countries from Japan to East Asia to Southeast Asia With you know the voluntary export restraints that the US put MFA was a product of Europe Restricting and that was what resulted in Bangladesh and Mauritius gaining those capacities And then a goa was what allowed the suit to in Kenya to to have Foreign investment as well, so I mean this this smart this global value chain this market has always been shaped By quotas in preferential market access and that's important because whether or not when you get this FDI hopping The the important thing is whether or not that leads to developing the domestic firms, right? And that's what Bangladesh and that's what Mauritius did. That's what the suit who hasn't done And he didn't mention the labor unrest in the suit you which is I think would also drove away some foreign direct investment Thank you. Any other questions Yes, the woman in the front Thank you for the excellent Transitation three of you I'm drilling from Chinese Academy of Social Sciences Beijing and the question to first speaker you're talking about overseas African Because I cannot use these words. What is the dear? Diaz pora That you took Africa as a whole If for your studied country is a 19 How large is the group? for each country if it's too small of the numbers What kind of impact of their? export exporting activity Exized on the country because in China, there is a huge number among the mainland this Taiwanese and Hong Kong needs also Sasa Asian so I like to know that the numbers for the country and for the second speaker now I Got your answer from here. You talk about that African country facing all the competition from China on all the markets The first question except those Case studied countries what happened with the other country that they are not existing in the government Market And for those the survivings What is their strategy for the future? Competition you said that is a win-win, but still is for the Closing market still can be divided for the low-level or high Quality different markets. So could you tie a little better in in which? Stop market has African countries Competitive advantage, okay. Thank you, and we just have one final question in the front here And then we'll move on to responses from the speakers thank you madam chair and Very big thanks to all presenters for very well articulated presentation My question goes to the first presenter on the issue of diaspora investment and It relates to One of the ways in which you alluded to Investments from diaspora was through remittances I'm wondering whether in your data set there was a differentiation between Immigrants who have returned to the country vis-a-vis those who are just sending money while Leaving abroad and in my view the tool would be very different because of the management my interaction in Ethiopia is that the People who have returned from abroad and are carrying out investment. I think they have Better connections to the market But when you are just sending funds Management and control is by the law course and I tend to imagine that in terms of them Exporting and performing would not be significantly different So was there any differentiation in terms of how the diaspora was acting in the investment and Indicision-making for the local farms. Thank you Thank you Why don't we have responses from the speakers and in order of speaking? Okay, thank you for for the questions Regarding the first one treating Africa as a whole you'll write that Africa consists of many countries that are different, but here the idea was Really focusing on whether there's a difference When the firms belong to a diaspora member so It's true that we only control for country specifics using dummy variables We didn't look into country differences and just to answer also your question. It's about five percent Of the total sample, which is pretty low and in some countries like Uganda Kenya or Ethiopia you have about 15 percent. So This gives you the percentage and in terms of impact on the economy the whole idea is Much more can be done. I cannot tell you now What is the impact on the economy? but the idea is if they can contribute to increasing the exports of their Home countries then government have an option to look into that possibility. So this would be the main message From from the paper But I guess it's far less than the contribution of country of the diaspora in China, Taiwan or India for example For the second question Unfortunately, we don't have Additional information on the diaspora as I said, it was basically one question Whether it was a diaspora investment or not but what we do have and we are not looking at here in the paper is the share of This diaspora investor in the total investment, but it's true that we are not referring to that year So but you you write that the quality matter like characteristics of the diaspora matter a lot right, and I think there were two main questions for for the apparel study and one Lindsay thank you for Making the point which is very true history is important And I think I cut out some of it because I was trying to get to the main findings and so on but but you're Absolutely, right that the whole history of the clothing industry the global clothing industry has was ruled by the MFA and its predecessors over over a long period of time and it did shape the industry And one can see also even if you go beyond that global level to the individual countries That say a country like Mauritius has a much longer history of Export clothing production than some of the others where say Kenya had an import substitution Industry which collapsed with liberalization and then some things came back and foreign investment came in So the history of each of the countries really does play itself out in in this Industry and it makes a big difference So I think that that there's a little bit more of it in the paper But you're encouraging me to maybe make it still stronger as I work on the revision then the question that about Other countries and are they not in apparel? the we used Basically the com trade data because we were interested in export clothing production and so we Identify we use the com trade data and then we used what we knew of the countries to identify the five major Exporters and those were the ones that I was reporting There are others who have much lower levels of exports and others who have a clothing industry Which is totally domestic or or regional so the five that we have reported are the main exporters into global markets One of the things though that we we think we need to study more To understand where the industry might be going Are those who are producing for regional markets an interesting thing that we discovered? We didn't expect when we started out that the Africa market would be Important because all of these were we thought Exporting either to Europe or the US, but we found that some of them in their efforts to diversify Or from the supply side firms from South Africa Were moving into for example the suitu and Swaziland and exporting back into South Africa and Mauritius was exporting into South Africa and some were exporting into other countries so the African market it seems is growing in importance for these clothing producers and We think we need to because we focused on the exporters the global exporters We tended to find our population among them But we we know from Kenya and from some other work for example that Paul Camau has done that there are some who are Exporting into regional markets and who are doing quite well at it So we think that this is another area of research that we need to to get into what What are those firms doing who are exporting into African markets? And is there a possibility of more growth there even if the global markets remain a bit unstable I think that's let me start with a question on state business relations in Ronda and So you're right Ronda has done very well in doing business like John Page was saying earlier It doesn't it doesn't really have any relationship with how good state business relation state business relations go in terms of large companies and stuff like that a couple of a couple of thoughts on that one one is that It's a very small sector right so if we're talking about manufacturing and exporting they're just 50 firms in the country that manufacture and out of those maybe 22 that actually export and And Like months was telling me earlier. It's very idiosyncratic all these companies have their own little problems So talking about state business relationships on average doesn't really make sense because all these little companies have different issues They are exporting to different places. So it almost has to be a one-on-one relationship for it to make any sense the second point is that Yes, state business relationships are not very structured at this point in time There's some efforts in place to make that happen. So for example, there's The IDB is engaging very heavily now with Exporters to see if they can link them the IDB is a Ronda development board so it's like the investment promotion agency, but also the export promotion agency and That they have a number of projects now to see if they can actually link Manufacturers and exporters to Buyers in neighboring countries so in DRC and in Burundi because the big problem is that people don't really know The people that are running these companies don't really know the markets in those countries and how to export there, etc And of course there are other structures in place to sort of get business around the same table as as Government the third point is that I think to be honest Services is more important for the Rwandan government at this time at least they perceive service companies to be more important so if if we're talking about banks if we're talking about telecom companies if we're talking about ICT I think there there's much more engagement and the government is much more responsive if you like to the needs and demands of Of the private sector than in the money than in the manufacturing sector. I think Some parts of government government have given up a bit because like you saw it's been flat for the past 30 years There all of these projects have been implemented Executed etc. At the end of the day still flat. Okay, so I think that's what I would say on on state business relationships I don't know if it really answers your question on on the issue of Learning with neighboring countries that you were raising earlier. I think I think The countries next to Rwanda DRC Brunni in particular in the broader EAC region is really where the future of the country lies where the exports lies and that That is what is going to drive growth in Rwanda's manufacturing sector. It's not the exports to Europe or exports to Other countries. I don't know what the literature says on it But but in this in this case, I think I mean in Rwanda's case learning is gonna happen from exporting to these neighboring markets Not elsewhere simply because Rwanda is not competitive on other markets In terms of supply chains and global supply chains I guess my one point is that what makes a difference in terms of productivity for firms in Rwanda and how well they do is how good their supply chains are and If you if you look at the performance of companies, you'll find there's one very striking feature Which is that? Companies that are owned by larger groups and especially groups that are highly diversified and Operational in the region do much much better than other firms Let me give you for example. Let me give you the example of Bacresa. So Bacresa is a Tanzanian mega company And they also do wheat flour and they have a wheat flour processor in Rwanda Now what happens is they get their wheat the wheat they process in Rwanda is imported from Australia They have their own port terminal. So the boat comes sits in the port terminal of Bacresa Bacresa has its own transport fleet of trucks and whatever so they they take the they they take the wheat into their truck Bring it to Rwanda where it's processed and it's put into the packages that their firm makes in In Dar es Salaam now, how can a small company compete against that? It's impossible Because there is no packaging industry in Rwanda Transport costs are ridiculously high and transport is charged huge premiums So companies that have these supplied networks in place can do much much better and that's I for me I think the future of manufacturing in countries like that that I landlocked is Going to be through the vector of large groups not through small individual Manufacturing firms that have been there for 20 years and that maybe have an output of four or five six ten million dollars But ultimately are too small To overcome the constraints they they face. I don't know if that Provide some context maybe to what I was saying Okay, thank you We've just a few more minutes. So if there are any more any final follow-up questions or quick comments quick questions Please okay the in the middle of the room here Hello, I'm Lotta from the University of Vitzfotos Rand My question is to Dorothy McCormick It's very interesting presentation. I was particularly interested in the differences in the stability of the sectors across the countries and In their product mix so some producing basic others more advanced products. I would be interested in hearing your insights on Labor in particular labor cost is raised to the bottom and labor is the dominant cost in clothing and whether there's any differences in Across the countries and whether there's been any change in the way employment is structured has have been an increasing outsourcing use of informal labor, etc Across the countries is this something that is Similar is this the way they all compete or are you noticing differences across the different countries? Thank you just one more final question. I think there was someone just behind you. Thank you I'm got noobler from the ILO in Geneva. I also have a question to Dorothy um You mentioned the the important fact that about half of the technically skilled Workers were expatriates and I would like to know a little bit more about that. First of all, is it this about the same share across countries? Is there a difference in ownership? Can we say that multinational enterprises would have a different? share of expatriates than domestically owned firms Can we say something about the destiny? You know whether it makes a difference whether the export to the u.s. Or into African countries So I would like to understand a little bit more What is it that you know first of all there is such a high share of? Expatriates in this area and also is the reason that the high standards They have the companies have to meet or is it that? There are there's no training for for domestically domestic workers in these technical skills. Thank you Thank you So we just have five more minutes less than five more minutes till the end of the session So I'll just ask the panelists to respond briefly and they have any closing comments Two of the questions. I think were directed to me. So let me answer those and then we can others can pick up The issue of labor and labor costs and outsourcing We we didn't explicitly study labor So I don't have a lot of detail on this But one thing we do know is that for example Mauritius Does have higher wages there they're at a different level of development and they have a higher standard and What they have been doing because they don't get enough local labor Is they have been in some of the firms import labor from Bangladesh So it's the only country where the expatriate labor is actually machine operators In all the other countries the expatriate labor are technical workers with skills, but in Mauritius They do have expatriate Machinists They're not outsourcing as far as we know The labor from the factories we visit and the things we see the workers are typical in-factory workers and most of those Again, I we have some data, which we haven't analyzed fully on wage rates So I can't really speak to that very well on the technical skills issue in the expatriates The the the bear the percentages vary in Mauritius is the only one that reports little or no expatriate technical workers in the other countries It goes from a high of 92 percent of the technical workers being expatriate in Lasotu 83 in Swaziland, sorry 92 percent in Swaziland 83 percent in Lasotu 62 percent in Madagascar and 53 percent in Kenya. So it's over half between a half and a hundred percent Across the board, which is one of the reasons why we were so concerned about it If we remember that across the board foreign ownership is 63 percent Even some of these it's not only the foreign firms that are Using expatriate technical workers, but typically it is you have a Chinese firm for example And they bring the technical workers from China or you have an Indian firm and they bring technical workers from India So and they say to us when we ask them because in some cases We actually asked about this when we went back and did case studies We asked people and they said that they the people of the country don't have those skills That there aren't adequate training programs. So one of the things that we are doing now is We are working with the export processing zones authority and the Ministry of Trade in Kenya to Who have the idea of setting up a high-level technical training Institute for the region? in Kenya To see if that kind of a thing would be feasible and would be helpful for not only Kenya But for the other countries in the region. So we're in the process of working on that with those those people So maybe we'll have some more answers later on So I think those were my questions Okay, thank you. Did the other speakers have any other questions or mainly for Dorothy this last set Okay So I urge you all to download and read these papers. They're very interesting And I know there are a few more questions from the audience But I invite you to talk with the speakers during the the coffee break now. Okay. Thank you very much