http://orcid.org/0000-0002-2644-0165
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ABSTRACT
Exporters, in developing countries, often struggle to access accurate market information which will help them make informed decisions about which export markets and products to focus on. Despite the existence of several market selection techniques, a lack of market information has been identified as a major impediment to export activity in the Indian Ocean Rim region. This paper introduces the TRADE-DSM®, a scientific market selection methodology that screens large quantities of data to reveal the most promising realistic export opportunities for a company, industry, country or region. The hypothesis of this paper is two-fold: (i) whether the TRADE-DSM® could help fill the information gap that exporters and export promotion organizations in the Indian Ocean Rim Association (IORA) experience, and (ii) whether the TRADE-DSM® could provide the building blocks for the development of a region-wide export promotion strategy for IORA.
Disclosure statement
No potential conflict of interest was reported by the authors.
Notes on contributors
Dr. Susara Jansen van Rensburg has been a postdoctoral research fellow in the TRADE (Trade and Development) research focus area at North-West University (NWU) in Potchefstroom, South Africa, since 2017. Prior to that she served as a diplomat for the Southern African Customs Union (SACU) Secretariat in Windhoek, Namibia, where she held the position of Trade Negotiations Coordinator. Her main responsibilities were to facilitate and coordinate SACU's trade negotiations agenda. A key focus area in her work was to assist the Secretariat with the formulation of economic and trade policy positions and mandates for SACU, and to oversee their implementation.Shehas a great deal of knowledge about the rules and technical aspects of trade, trade negotiation, and regional economic integration. Her particular research interests include the fast-changing global trade environment, how trade policies can be optimised to suit different countries’ and regions’ circumstances, and how the geopolitical landscape influences trade and trade policy. She has a long standing relationship with the NWU. She obtained her PhD in International Trade at the North-West University in 2009 and was also a PhD scholarship holder, and has facilitated and lectured various undergraduate and postgraduate courses. Since embarking on her postdoctoral studies at the university, she has also been a part-time member of the School of Economics’ academic and research team, and has recently coauthored a number of papers.
Prof. Wilma Viviers is a research professor and director of the TRADE (Trade and Development) research entity, a National Research Foundation (NRF)-rated researcher and holder of the WTO (World Trade Organization), Chair at the North-West University (Potchefstroom Campus). She holds a DCom (Economics) from the Potchefstroom University for Christian Higher Education. She is known both locally and internationally for her academic and research prowess, and for her commitment to opening up opportunities for South African exporters through cutting edge research and information sharing. The establishment of a dedicated international trade and economic development research unit at the NWU under her direction and the interest being generated by the TRADE-DSM® (Decision Support Model) and other research initiatives are a testimony to her skill in bringing innovative projects to life. She is also well connected in academic, business, and government circles. In 2015, she was appointed by the Director-General of the South African Department of Trade and Industry (the dti) as a member of the Economic Research Advisory Network (ERAN) comprising representatives from the national and provincial government economic development departments, other government entities, universities, and research institutions. She was an active a member of the Board of Trade and Investment KwaZulu-Natal for 5 years (2013–2017), and is a strategic advisor to the North West Provincial Government Department of Finance, Economy and Enterprise Development (FEED), and the North West Development Corporation (NWDC).
Martin Cameron is the managing director of TRADE Research Advisory (Pty) Ltd, a spin-out company of the North-West University. TRADE Advisory provides strategic and practical assistance to government and business on how to optimise their regional or global presence, from the perspective of economic development and/or export expansion. He is a quantitative economist specializing in quantitative executive decision support modeling, economic impact analysis, and engineering management decision support. He has authored various papers on the topic of international trade – most recently for the International Growth Centre of the London School of Economics on policy implications, based on a Decision Support Model, of improving export promotion for Rwanda, and a research paper (unpublished) for the South African Indian Ocean Rim Association’s Academic Group (IORA-AG) under the theme: “Towards expanding intra-Indian Ocean Rim Association (IORA) trade: A TRADE-DSM® analysis of bilateral realistic export opportunities between Thailand and South Africa”. Martin holds a master’s degree (cum laude) in computable general equilibrium (CGE) modeling and development economics, and is currently enrolled for PhD studies (at the North-West University) in international trade focusing on further refinements to the TRADE-DSM® methodology.
Ali Parry is the director of Trade Matters (Pty) Ltd, a company providing research, consulting and writing/editing services, with a special focus on economic development and international trade. Previously, she was an executive director of the International Trade Institute of Southern Africa (ITRISA). She has impressive research credentials and has participated in numerous projects aimed at building the knowledge and expertise of international trade policymakers and practitioners in South Africa. She has had a long association with the North-West University – serving as a developer of courseware for several international trade-related disciplines for the School of Economics, and as an editor of accredited research articles and co-author of various research reports and strategy documents under the TRADE banner. She holds a BA degree and Postgraduate Diploma in Management from the University of the Witwatersrand. She is also an external moderator for the North-West University School of Economics and is a full member of the Professional Editors' Guild.
ORCID
Susara J. Jansen van Rensburg http://orcid.org/0000-0002-2644-0165
Wilma Viviers http://orcid.org/0000-0001-7471-7862
Martin Cameron http://orcid.org/0000-0002-0166-2036
Ali Parry http://orcid.org/0000-0001-8612-5047
Notes
1 Australia, Bangladesh, Comoros, India, Indonesia, Iran, Kenya, Madagascar, Malaysia, Mauritius, Mozambique, Oman, Seychelles, Singapore, Somalia, South Africa, Sri Lanka, Tanzania, Thailand, United Arab Emirates and Yemen.
2 For a full list of the export barriers that countries could choose from, see the Global Enabling Trade Report 2016 (WEF, Citation2016).
3 In IORA the following organizations are responsible for national export promotion: Australian Trade and Investment Commission or Austrade; Export Promotion Bureau of Bangladesh; Union of Chambers of Commerce and Industry and Agriculture (UCCIA) of Comoros; Department of Commerce in India and its 14 Export Promotion Councils; National Agency for Export Development of Indonesia; Iran Trade Promotion Organization; Export Promotion Council of Kenya; Economic Development Board of Madagascar; Malaysia External Trade Development Corporation (MATRADE); Trade and Export Office of the Economic Development Board of Mauritius; Mozambique's Agency for Investment and Export Promotion (Apiex); Public Authority for Investment Promotion and Export Development of Oman; Seychelles Investment Board; IE Singapore; Trade Invest Somalia; South Africa's Department of Trade and Industry (Export Promotion Division); Sri Lanka Export Development Board; Board of External Trade of Tanzania; Thailand Department of Export Promotion; Dubai Exports; Ministry of Trade and Industry in Yemen.
4 Where DSM stands for Decision Support Model.
5 Measured by Gross Domestic Product (GDP) (IMF, Citation2018).
6 Given that IORA has so many African and Asian members.
7 This leaves a great deal of room for further research.
8 South Africa is moving away from this approach. The Department of Trade and Industry now makes extensive use of the TRADE-DSM® to identify high-potential realistic export opportunities for the country.
9 This paper is based on the research that was conducted by the North-West University and TRADE Research Advisory (Pty) Ltd for the South African Indian Ocean Rim Association's Academic Group (IORA-AG) under the theme: ‘Towards expanding intra-Indian Ocean Rim Association (IORA) trade: A TRADE-DSM® analysis of bilateral realistic export opportunities between Thailand and South Africa.’ The report is yet to be published.
10 The TRADE-REO Map® is a registered trademark of the TRADE (Trade and Development) Research Focus Area at the North-West University in South Africa.
11 To illustrate why this is important: In one of the previous TRADE-DSM® applications, small wares and toilet articles were shown to have export opportunities in 41 countries and ranked second when compared with other product classifications, while motor vehicles for the transportation of goods or materials had export opportunities in 35 countries and ranked 20th. In this example small wares and toilet articles had more export opportunities than motor vehicles and as a result the model prioritized the former over the latter.
12 If an exporting country is already one of the main exporters to a particular market and the exports to that market exceed the average market value of its top six competitors, the actual export value will exceed the ‘untapped’ potential export value.
13 For more information on CEPII and the data that was used, please refer to: http://www.cepii.fr/CEPII/en/bdd_modele/presentation.asp?id=1.
14 The HS or Harmonized System is an international tariff classification system that assigns names and numbers to all traded products in the world. Without this system, it would be impossible to gather trade data. For more information, see the World Customs Organization at: http://www.wcoomd.org.
15 In the interests of brevity, this paper provides information on the TRADE-DSM® results at a highly aggregated level. A much more detailed analysis has also been conducted at the HS 6-digit level of detail but that is not reflected in the paper.
16 The sector groupings are based on the Standard Industrial Classification (SIC) of economic activity in South Africa (Statistics South Africa, Citation1993).