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few large firms in position to supply them. In addition, even where a high number of firms offer
equivalent products, very few of them actually have a given product in stock at a given time.
Clients are thus forced to shop around to find what they need, relegating price considerations to
the background. Many respondents complained about the scarcity of reliable local suppliers,
especially where quality is an issue. In such cases, they often have to agree to pay the higher
prices charged by well-established firms until they can locate alternative suppliers offering
products of equivalent quality (including in terms of after-sales service).
Local production being non-existent or insufficient for a large number of goods, the great
majority of respondents operating in the commercial and industrial sectors indicated that a
sizeable portion of their supplies were made in or imported from Europe, Asia or North America,
either directly from the producer, or through foreign or locally based trade intermediaries.
Dealing directly with foreign-based suppliers allows them to pay less for the supplies they need,
but also entails some additional bureaucratic hassle and delay, and can pose problems in case of
defect. Some respondents indicated that, because of the relatively small size of their orders, their
suppliers tend to give priority to their more important clients and delay delivery.
The precarious financial situation of firms means that, although they want to obtain the best price
they can, they also pay particular attention to the financial conditions imposed by suppliers.
Many respondents complained about foreign firms’ reluctance to grant them credit and their
insistence on using costly instruments such as letters of credit to secure payment. The creation of
long-term business relationships with a supplier was often seen as key to obtaining credit. Long-
term relationships also enable firms to achieve other economic efficiencies, such as economizing
on search and negotiation costs. This is not negligible in cases where the supplier pool consists in
a plethora of small firms offering products or services of varying prices and quality. However,
Convention