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Session 4: ECONOMIC AND DEVELOPMENTAL OBJECTIVES OF GOVERNMENT PROCUREMENT

Session 4: ECONOMIC AND DEVELOPMENTAL OBJECTIVES OF GOVERNMENT PROCUREMENT. Dar as Salaam, 14-17 January 2003 Vesile Kulaçoglu, WTO Secretariat . SIZE OF PROCUREMENT MARKETS POLICY OBJECTIVES INSTRUMENTS USED TRANSPARENCY. System of National Accounts. GDP = C + I + [X -M] + #inv. .

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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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