World Bank Document

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During the last decade, economic growth in the fastest-growing develop-
ing countries, particularly China and India, has been accompanied by 
their rapid integration into world markets. This has created new oppor-
tunities for all countries but also new competitive pressures, and it has 
placed new demands on policies to support trade development. 
As increased competition among developing countries in labor-
intensive manufactures erodes economic returns, higher-quality markets 
and high-value goods are increasingly important to maintaining dynamic 
competitive advantage. Globally integrated production networks, typi-
cally governed by buyers from developed nations, have raised competi-
tiveness to the top of developing countries’ policy agendas. Countries 
need to offer the high-quality products demanded by consumers and 
global supply chains and deliver them to markets to meet just-in-time 
production schedules. 
Against all major competitiveness rankings, Latin America has lost 
ground. Growth has been mediocre, especially if compared with the 
growth of most Asian economies. This has led to lively policy debates 
about the path back to high growth, from which has emerged a growing 
consensus that better and more effective coordination between the public 
and private sectors is required—and that this needs to be complemented 
by institutional and microeconomic reforms. For Latin America, a new 
trade and competitiveness agenda has three key elements: (a) upgrad-

ing the value of traditional exports and diversifying exports away from 
primary products; (b) removing constraints to “speed-to-market” goods 
to fully exploit proximity to the United States and other markets; and 
(c) enhancing productivity growth to offset rising wages while boosting 
the development of technological capabilities and skills.
But diversifying and upgrading exports—whether manufactured 
products within large supply chains or high-value food products—means 
developing quality and standards. It also means addressing weaknesses in 
logistic, fi nancial, and administrative support services. These are not easy 
tasks, and they present a major challenge both for policy makers in the 
region and for development partners. 
This book responds to this challenge by providing a comprehensive 
account of quality systems for private sector development: what works 
on the ground and what doesn’t, and why. It explains why quality and 
standards matter for export growth, productivity, industrial upgrading, 
and diffusion of innovation, all central ingredients in improving economic 
growth and generating real gains in poverty reduction. The book exam-
ines the diversity of institutions, linkages, and arrangements involved in 
quality systems, identifying success factors and obstacles in the quality 
strategies of particular countries. A portion of the volume is devoted to 
experiences in Latin America and the Caribbean, a region with a great 
deal at stake in the drive to improve quality. (One of the authors, J. Luis 
Guasch, is one of the World Bank’s leading experts on private sector 
development in Latin America.) Policy makers in Latin America and 
throughout the developing world will fi nd Quality Systems and Standards 
for a Competitive Edge to be a valuable tool for meeting the challenges of 
building trade competitiveness in the new global economy. 
Danny Leipziger
Poverty Reduction and Economic Management Network
The World Bank
xviii Foreword

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