Public Procurement and the Development Agenda

2003 | International Trade Centre

Public procurement is a business process within a political system. Failure to properly balance these elements can lead to wasted effort and poor development results within the most important single marketplace in developing countries. The International Trade Centre UNCTAD/WTO (ITC) advises developing and transition countries on the techniques of effective public procurement systems while supporting the policy goals established by government. Its main focus continues to be assistance to less developed countries.1
Public procurement remains a big part of the economy of developing countries, accounting for an estimated 9-13% of their gross domestic product. Nevertheless, it is an area in need of attention since resources are not being properly managed in many countries Governing administrations in developing countries can reap benefits from improved management of their public procurement systems. With a more focused approach on the control of resources within this large internal market, greater value can be achieved in national budgets while developing local industry. Despite the potential for developing local industry through public procurement, many local and international firms do not participate in public procurement because of a perception (and at times the reality) that governments are slow payers, difficult to work with or have their own favoured suppliers for contract awards. In addition to these general complaints, there is also a feeling among suppliers – based on anecdotal reports – that corruption plays a part in contract decisions. Some “corrupt” activities could be caused by a lack of understanding of the best practices in public procurement. Therefore, we are working to develop a set of “tools” to make it easier and more cost effective to build the required capacity “in-country” to understand not just the basic rules but also why it makes sense to follow the rules.

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