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Fairness in free trade

In the modern global economy the greatest challenge developing countries face is to create fair opportunities for their people to access the benefits that globalization brings. As nations struggle to define fairness, GFI has led the way to broaden inclusion in the free trade process by extending economic opportunity to traditionally-excluded workforce stakeholders including women, the marginalized poor and informal sector workers. Engaging governments and large private interest holders GFI help worker communities tap into the opportunities created in a free trade environment.

Modern, risk adverse markets are attracted to stability and counties that represent "best practices" of workforce standards and government commitment to social services and economic development become "darlings" of the globalized economy. Unfortunately, many limiting factors are prevalent in developing economies that seek to uphold high standards and compete in the global economy. In order to eliminate these barriers free trade must be closely aligned with both social services and capacity building investments to help developing countries meet the standard that foreign investors require. Further, foreign government assistance and multi-lateral investments must address core capacity issues and seek to align trade program with aid and capacity building initiatives so that developing economies can meet the goals and reap the rewards that trade agreements bring. To help achieve this goal, GFI's works with developing countries to attract meaningful and secure foreign investment by helping establishing high standard of social services, protections and environmentally sustainable practices. To ensure that these standards can be met and enforced, programs are designed around a multi-stakeholder process that seeks to build core capacity within government, the private sector and civil society.

Building workforce capacity

Sustainable economic development with a genuine and large scale impact requires the engagement of a well-trained and productive workforce. Organized labor and engaged workforce communities have always been a cornerstone of civil society and leaders in social equity and human rights movements. By engaging unions and other organized formal and informal worker groups, GFI seeks to expand the reach of our economic development initiatives and broaden the impact of social services in the countries where we work.

Promoting labor rights and peaceful labor relations is important for attracting investments that create growth and improve livelihoods. Growing trends such as Corporate Social Responsibility (CSR) and the importance of brand reputation means that multi-national companies now view decent working conditions and protection of local community rights as fundamental to the longer term sustainability of their operations. In Guatemala and El Salvador, GFI brought fair labor standards to the forefront of national agendas by leveraging bilateral trade agreement labor obligations and CSR interests. In bringing together such diverse actors as labor unions, international textile and apparel brands, and local private sector and government representatives, GFI helped pave the way for an unprecedented set of agreements that have created the basis for improved conditions and competitiveness in the textile and apparel industries.

GFI also realizes that the majority of poor workers are not covered by national and international labor laws and standards. In fact, in most developing countries nearly all of the poor, almost 75%, work in the "informal sector" and most are women and girls. When developing countries cannot transition or integrate informal workers, economic growth remains low and poverty remains high. In Nicaragua and Guatemala GFI is working to extend social insurance programs and government services while simultaneously creating incentives for workers to formalize their businesses. In a unique model that includes government and private sector participants, this project is addressing the rights of the working poor to access equal economic opportunity.

GFI's experiences have demonstrated the importance of workforce development for achieving tangible results such as improved working conditions, fair wages, empowered women, and increased market access. Whether in post-conflict Guatemala, or in the challenging political environment of Nicaragua, GFI creates the common linkages that bring Government, Private Sector and Workforce communities together to solve economic challenges and broadly impact poverty reduction goals.

Investing in women producers

Agricultural and textile production, carried out primarily by women, is the foundation of most developing country economies. In many developing economies as much as 80% of women are employed full or part time as small-scale producers in the agricultural sector and account for the majority of food security production for both their families and the communities where they live. Despite carrying such a heavy burden of the productive work, women are often marginalized to the informal sector of developing and even established economies where they find themselves ineligible for social services and social protections afforded the formal sector. The result is a deep cycle of poverty and social inequality experienced by women producers that keeps them isolated from mainstream capital markets and government social programs.

At GFI we see a deep and sustained investment in women producers as one of the single most effective strategies to break the cycle of poverty in the developing world. Empowering women farmers and textile workers requires a multi-faceted, multi-stakeholder engagement process aimed at creating opportunities for improved input, access to credit, removal of institutional and supply chain barriers, access high-value markets and policy reform targeted at enabling women to sustain real economic growth and improve livelihoods.

GFI brings a core set of tools to our programs aimed at improving livelihoods for women producers and we follow a process that targets barriers and creates opportunity through the following steps:


1) Building Local Capacity

The implementation of GFI programs is based on local input and agreement on design of the project. Once a coalition and consensus are built we then tailor each activity according to our strength or engage key GFI partner to implement strategies outside of our expertise. Activities both target specific obstacles identified during the design phase as well as work cross-functionally on interrelated strategies. GFI uses a multi-stakeholder engagement to bring together a core group of local actors committed to advancing project goals and activities. The group will include actors such as producer and related business representatives, government officials and community leaders.


2) Technical Assistance

In collaboration with GFI partners and appropriate local organizations we develop a program for providing technical assistance on issues such as enhancing production, meeting industry quality and packaging requirements and the development of sales strategies. Private sector partners offer expertise and client networks to help construct more effective and profitable supply chains with a focus on the use of technical assistance overall to enhance production, quality, sales strategies, and supply chain management.

Production

Increasing the productivity of land and farming practices or textile production is one of the largest potential areas for gain in small producer communities. This can be done through higher quality inputs, improved land management and better use of technology. This may include the sustainable use of appropriate technologies such as fertilizers, herbicides and insecticides for agriculture or fabric, machinery and design for textiles. Local and international best practices are drawn upon and analyzed for their appropriateness for each situation.

Quality

To be competitive, producer groups must address issues of uniformity and quality guidelines demanded by global markets. This requires more uniform inputs of quality seeds or fabrics. Associated activities can include setting up community seed banks, agricultural information centers or design trainings for textile workers.

Sales Strategy

Smallholder textile and agricultural producers do not have the capacity to develop marketing campaigns to promote their products. GFI program participants benefit from improved market research and professional partnerships to create sales strategies and materials to ensure the competitiveness of the products in key markets.

Supply Chain Management

Limited storage capacity and difficult product transport remain two principle constraints in the supply chain for poor producers. Few small-holder producers have the physical space or knowledge of the necessary conditions for proper long-term preservation of such things as produce or other product inventory; in the case of agricultural products this can mean that they are forced to immediately sell their commodities during seasonal harvest periods when supplies are highest and prices are low. Improved storage capacity allows farmers to take advantage of lower supply periods when their products can earn a higher return.


3) Market Analysis

GFI market analysis strategies include a range of activities such as determining market demand and working with local officials to incentivize production of strategic products and promote coordination of rural distribution networks. This is done in parallel with multi-stakeholder activities that are helping producers to understand their role in the supply chain, as well as maximizing their leverage in local and global markets.


4) Policy Evaluation

It is clear that economic development projects do not operate in a policy vacuum. However, there is little to no formal representation of women small producers in policy-making processes. GFI and its Women's Trade and Finance Council (WTFC) work with local women's organizations to represent and raise the voice of women producers in national and international policy forums. The WTFC develops clear policy goals and an agenda to achieve them. The Wolfensohn Center for Development and the Brookings Institution, a recognized world leader in policy analysis, work directly with GFI and the WTFC to identify and prioritize the policy challenges being face by small producers. Counter-productive international policies are also examined and reform recommendations are developed and highlighted. Additionally, GFI works with local research organizations to help develop lessons and to build capacity. The overall goal is to improve policies that effect poor women producers throughout the developing world to inform a large educational campaign or support broader recommendations.

Engaging Governments

At GFI we believe that truly effective livelihood development programs that are both sustainable and broad based require the earnest engagement of local, national and in some cases international government. Government as a partner or a major stakeholder in poverty reduction initiatives helps create linkages that extend beyond the lifecycle of a project and open opportunities that create lasting development impacts. With our unparalleled international network of leading experts, including former Presidents, high-level trade and commerce officials, and prominent labor leaders, GFI works with national and international decision-makers who influence policies at multiple levels. Through careful assessment of the political factors that play into the success of our programs, GFI is able to reach scale and ensure sustainability of outcomes by building capacity of local institutions to assume their responsibilities and provide services for their constituent communities.

Image description Development projects do not operate in a policy vacuum and currently there is little to no formal representation of the working poor in policy-making forums. GFI's Women's Trade & Finance Council works to alleviate poverty by fostering greater inclusion of women's productivity in global trade flows. In addition to advocating for the working poor through influencing trade and finance policies at the international and national levels, the Council seeks to cultivate linkages that expand market and business opportunities that contribute in measurable terms to sustainable livelihoods. The Council is structured to examine and develop solutions to such practical issues as financing terms, market access barriers, production constraints and supply chain management challenges.

Identifying relevant policy barriers and prioritizing them locally, nationally, and internationally is also an important component of policy and program activities. GFI's strategic partnership with the Wolfensohn Center for Development at the Brookings Institution allows us to better understand the policy barriers small producers face as they seek to export their products. A recognized world leader in policy analysis, the Brookings Institution and GFI together present a unique and inclusive model for designing policy frameworks and development programs that provide the full range of tools necessary to promote sustainable economic growth.

GFI remains a leading innovator in the development of public policy interventions that support small producers and create economic opportunities for the working poor. Through targeted programming and partnerships, GFI engages governments on strategic initiatives that incentivize participation and create lasting links between our constituent worker groups and the governments that serve them.