Extractives-led Local Economic Diversification - Conference
Reconciling Trade and Local Content Development
Program Chair: Silvana Tordo, Lead Energy Economist, The World Bank
Kristina Svensson, Senior Mining Specialist, The World Bank
DAY 1 – January 27, 2016
8:45-9:45 Opening remarks
Ildefonso Guajardo Villarreal, Secretary for Economy
Lourdes Melgar Palacios, Undersecretary for Energy
Juan Carlos Zepeda Molina, President Commisioner, National Hydrocarbons Commision
Anita George, Senior Director, Energy and Extractives Global Practice, The World Bank
Ramon Espinasa, Lead Oil & Gas Specialist, Inter-American Development Bank
9:45-11:15 Session 1: The economic dilemma of free trade vs productive policies. While there is a general consensus on the importance of FDI as catalyst of development, empirical evidence suggests that the extent and nature of spillovers vary widely across countries and economic sectors. But if limited linkages to the local economy exist – as it is often the case in the petroleum and mining sectors – FDI may not spur local development and may even generate negative spillover effects. Government intervention may then be necessary to facilitate the establishment of linkages, by providing public inputs and correcting for market inefficiency. Which factors and government actions support FDI spillover effects in extractives? Does the maturity of the extractive sector matter?
Moderator: Alan Gelb, Senior Fellow, Center for Global Development
Lead Presentation: Ricardo Hausmann, Director of the Center for International Development, Harvard University
Michael Levett, Senior Advisor, Center for Strategic and International Studies
Chris Papageorgiou, Deputy Unit Chief, Low Income Unit, IMF
Tilman Altenburg, Head of the Competitiveness and Social Development Department, German Development Institute
Isabelle Ramdoo, European Centre for Development Policy Management
11.15-11.30 Coffee break
11.30-13:00 Session 2: Economic Development Policy in Context. Efficient economic development builds on countries’ existing competitive advantages and productive knowledge, and identifies adjacent possible or potential new products and services, making it easier to find paths for economic diversification and growth. The structure of foreign ownership, FDI motives, their sourcing strategies, technology intensity, the characteristics of domestic firms, and country specific factors help to explain differences in trade and productive policies. This session will explore these differences, and their impact on diversification, based on the experience of four resource-rich countries at different stages of sector and economic development.
Moderator: Eduardo Fernandez-Arias, Principal Economist, Research Department, Inter-American Development Bank
- Gulf Cooperation Council Countries: Investing to spur the development of the local private sector. Rene Roger Tissot, Research Fellow, King Abdullah Petroleum Studies and Research Centre, Saudi Arabia.
- Mozambique and the United States of America: Policy options for the development of a competitive local private sector. John Mennel, Director, Social Impact, Deloitte Consulting LLP
- China: Institutional capacity and knowledge transfer for productive linkages. Albert Keidel, Senior Fellow, the Atlantic Council
- Malaysia: Leveraging existing knowledge and capacity to transform the nation into a regional hub for the oil field services and equipment industry. Kelvin Tan, Associate Director, National Key Economic Areas and Strategic Reform Initiatives, Performance Management Delivery Unit, Malaysia
14:30-16:00 Session 3: Extractive companies’ perspective on local value creation. Sixty five percent of resource-driven countries are low-income, and twenty percent are fragile states. In most of these countries, petroleum and mining companies face a common challenge: that of reconciling local content requirements, expectations, and business imperatives. The creation of shared value is emerging as a new way of doing business by simultaneously advancing the economic and social conditions in the communities in which companies operate. What does this mean for extractive companies? What are the factors that affect its feasibility and outcomes?
Moderator: Paulo de Sa, Manager, Energy and Extractives, The World Bank
Lead Presentation: Jim Walton, Director, Corporate Strategy and Local Content, Fluor
Acess to finance to support local suppliers development. Christian Spano, Global Lead for Enterprise Development, Anglo American plc
Using policies to support the development of local supply chains. Raúl Mendoza Jiménez, Suppliers and Contractors Development Vice President, PEMEX
Improving SMEs access to the oil and gas value chain. Natalie Stirling-Sanders, Category Family Manager, Transportation & Logistics Procurement, ExxonMobil
16:00-16:30 Coffee break
Leveraging networks and knowledge:
- The Extractive Industries for Local Content Development Community of Practice. Kristina Svensson, Senior Mining Specialist, The World Bank.
- Supporting local value creation in resource-rich countries: Approaches of German Technical Cooperation. Hasso Anwer, Sustainable Economic Development Advisor, GIZ
- The Diversification Toolkit: Export Diversification and Quality Database. Chris Papageorgiou, Deputy Unit Chief, Low Income Unit, IMF
- Development of Local Procurement Reporting Standard for the mining sector, Jeff Geipel, Mining Shared Value Venture Leader, Engineers Without Borders, Canada
19:00-21:00 Dinner at Club de Banqueros de México, Historical City Center
DAY 2 – January 28, 2016
9:00-9:30 Keynote Address: Development of Local Content and Local Participation in Ghana: Experiences from a new Producer Country. Mr. Theophilus Ahwireng, Chief Executive Officer, Ghana Petroleum Commission, Government of Ghana
9:30-11:00 Session 4: Technology and innovation: how do we make it happen? Studies on the transfer of technology and know-how have traditionally focused on input (such as research and education spend) and output (such as patents and graduates). However, the interaction between actors that are involved in technology and knowledge development is as important and the investment in those activities, and is key to translating them into innovation and economic performance. Technological strangeness, the business environment, and certain local content requirements affect the way foreign investors organize their operations and their willingness and ability to generate positive spillovers. What are the mechanisms for knowledge flows in the extractives sector? How can we make it happen? How do we measure it?
Moderator: Ganesh Rasagam, Practice Manager, Innovation and Technology, The World Bank
Lead Presentation: South Korea’s: from iron ore to integrated circuits. Kyung Soon Song, Representative Expert, Korea Expert Consulting Group
Industry coordination in science, technology, and innovation: Mining for generations. Per Klingbjer, Research Director, Geological Survey of Sweden
Mexico’s national system of innovation and the role of extractives. Ernesto Ríos Patron, Director General, Instituto Mexicano del Petróleo.
The World-class Suppliers’ Development Program in mining: promoting innovation in mining supply chains. Osvaldo Urzua, External Affairs, BHP Billiton
Patterns of industrialization and its implications to employment and technological change. Nobuya Haraguchi, Industrial Research Officer, UNIDO
11:00-11:30 Coffee break
11:30-13:30 Session 5: Creating a global talent-pool and a competitive labor force. Existing literature indicates that a better-educated workforce and the increased supply of skills have a major impact on economic growth through increased productivity and adaptability to new routines and technological change. As countries develop and the industrial sector expands, more and more sophisticated skills become necessary. Therefore investing in local human resource development is essential to the success and sustainability of the local industrial and service capacity, and needs to be carefully paced. How are the skills gaps assessed? How do governments and companies prioritize and build local human capital? What are effective strategies to reduce the skills gap?
Moderator: Germano Mwabu, Professor of Economics, University of Nairobi
Lead Presentation: Aishah Lassim, Head of Diversity and Capability Programmes, Talent Corporation of Malaysia
- Industry-led skills development in Chile. Hernan Araneda, Director, Fundación Chile
- Skills certification in Uganda. Ernest Rubondo, Director, Uganda Petroleum Directorate
- Building a competitive local workforce: countries’ strategies and their rationale, Raul Camba, Managing Director- Head of Mexico and Andean- Accenture Strategy Upstream
14:30-16:00 Session 6: Developing competitive local firms. Local sourcing, provided it delivers goods and services reliably that meet requisite standards, would help to contain costs and to support extractive companies’ social license to operate. The degree to which extractives companies are able to develop productive linkages in the local market, and the speed at which these linkages can be developed, is greatly affected by, inter alia, the type and scope of the operation, companies’ procurement strategies, and domestic firm’s characteristics. In global value chain-organized production, it is often the case that knowledge and capital/technology intensive processes are separated from labor intensive/low tech processes. Are governments assessing demand and supply and prioritizing activities and sub-sectors to support? If so, how? What are the selection criteria? What are companies, industry associations and governments doing to help local suppliers to become competitive? Are there examples of local suppliers that have been able to enter GVCs?
Moderator: Emiliano Duch Navarro, Lead Finance and Private Sector Development Specialist, The World Bank
Lead Presentation: Change in mindset: Local Procurement not a necessary cost but a driver of strategic business value. Christian Spano, Global Lead for Enterprise Development, Anglo American plc
- Industry-wide and industry-government collaboration in assessing and developing local capacity in Ghana. Tony Aubynn, CEO, Ghana Minerals Commission
- Bridging local capacity and economic diversification priorities in Trinidad and Tobago. Eric Williams, Ex- Minister of Energy
- Linking women-owned local firms to global value chains. Elizabeth A. Vazquez, President, CEO, and Co-Founder of WEConnect International
16:00-16:20 Coffee break.
16:20-17:00 Session 7 – Closing remarks. This session will summarize the conclusion of the conference, and explore ways for enhanced stakeholders’ cooperation.
Moderator: Paulo de Sa, Manager, Energy and Extractives, The World Bank
· Rogelio Garza, Under-Secretary of Economy (Industry and Trade), Government of Mexico
· Hon. Anibal Octavio Teixeira da Silva, Secretary of State of Petroleum, Angola
· Hon. Sam Russ, Deputy Minister Operations, Ministry of Lands, Mines and Natural Resources, Liberia
· Hon. Christopher Bwalya Yaluma, Minister of Mines, Zambia
· Hon. Kayode Fayemi, Minister of Solid Mineral Development, Nigeria
· Ross Hamilton, Director, Environment and Climate Change, ICMM
· Vanessa Silveyra, Special Projects Coordinator, Transparencia Mexicane, National Chapter of Transparency International
· Lahra Liberti, Senior Adviser on Natural Resources, OECD
· Osmel Manzano, Regional Economic Adviser, Inter-American Development Bank