Andrei MikhnevProgram Manager BEE Unit

SME Department

Benjamin HerzbergSr. PSD SpecialistSME Department

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The PPD Handbook+

Assessing the impact of the Mekong business forumson the business environment

Public-Private Dialogue

Capacity building Reform management

Learning about good practice

Good policies and regulations matter

Source: WDR05.

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Several forms of PPD mechanisms

Economic Council, Social Council, Gender Coalition, National Competitiveness Committee, Annual Forum, Private Sector Forum, Regional Forum, Deliberation Council, Business Forum, Competitiveness Review Group, High Level Consultative Council, Better Business Initiative, Bulldozer Committee, Investors Advisory Council, Etc.

Vietnam, Cambodia, South Africa, Mexico, Bosnia, Ghana, Nigeria, Uganda, Malaysia, Botswana, Japan, Bolivia, Indonesia, Senegal, Tanzania, Bulgaria, Turkey, Cameroon, Cook Islands, Germany, Hungary, Ireland, Kosovo, Malta, Mozambique, Thailand, Mauritius, Etc.

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Led by IFC/WBG, DFID, OECD

25 case studies

30 countries represented, 10 donors

Lessons learned (DFID, WBG, OECD)

Implementation guidelines (PPD Handbook, M&E Framework)

Knoweldge development framework

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Community of practice www.publicprivatedialogue.org

Charter of Good Practice

Lessons learned

Tools for practitioners

Case studies

Online partnerships

PPD Workshop

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PPD Handbook

6

Benefits, risks, lifespan

PPD Handbook

7

Builds momentum for business environment reforms

Helps prioritize binding constraints

Ensure that reform design fits local needs and capacity

Smoothen/accelerate implementation of policy reforms

Promotes accountability, transparency, good governance

Builds trust and restore confidence in post conflict/crisis env.

Benefits of Public Private Dialogue

PPD reforms Workable reforms Reforms that work

Strong economic impact

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Reinforcing vested interest (e.g. Mongolia)

Over and under representation (e.g. Tanzania, 18%)

Sustainability issues (e.g. Bolivia)

One man shows (e.g. Botswana)

Political risks (e.g. Bosnia)

Institutional misalignments (e.g. Uganda NF)

6 basic risks to un-structured engagement

Be open and transparent – Publicize quality control – Broad based

Strengthening BMOS – Equal representation – Periodic review

Clear agenda and proposals – Manage expectations – Live and let die

Foster bottom-up support – Secure written commitment – Prepare transition

Depoliticize through outreach – Woo parliamentarians – Go local

embrace institutions – Use technical ministerial staff – Transfer competencies

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Trust

Education

Discovering what works / What doesn’t

Setting up production process

EARLY RESULTS

Phase 3Phase 2Phase 1

Results

Time

More capacity

Better production

Better product

More conflict

HIGH IMPACT

RESULTS

1 to 3 years 1 to 3 years

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Lifespan of business forums

Public authorities Private sector

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Phase 3: What is IFC’s vocation?

Trust

Education

Discovering what works / What doesn’t

Setting up production process

EARLY RESULTS

Phase 3Phase 2Phase 1

Results

Time

Permanent brokering

Institutions (e.g. RIA)

BMOs (e.g. CoC, RDAs)

Ownership without capacity

Exit

More capacity

Better production

Better product

More conflict

HIGH IMPACT

RESULTS

1 to 3 years 1 to 3 years

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New tools for diagnostic

PPD Handbook

13

PPD mapping tool…

Define project brief

Investment climate constraints(Existing benchmarks and surveys)

Stakeholder investigation(Field interviews and focus groups)

Private sector Intermediaries Public authorities Civil Society

Most significant reforms(Field interviews and focus groups)

Stakeholder analysis

Design decision

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… with diagnostic instruments

Widely seen by its members as corrupt, ineffective and not democratic. Compulsory membership fee is resented.

Existing membership gives it the potential to reach all businesses. Legal mandate gives it close links with government, which could be capitalized on.

Compulsory. All businesses with more than 10 employees must join.

“Organize, represent and promote the country’s private sector interests.”

Chamber of Commerce

Narrow membership based around the automotive industry and in one city. Foreign investors are ineligible for membership.

Legal department is well regarded and arbitration service commands respect. Some successful input into recent labor regulations bill.

Voluntary. 720 businesses are members, representing 32,000 employees.

Represent manufacturers in policy discussions. Provide training services, advice on setting up companies and mediation wit unions.

Manufacturers association

Contact informationWeaknessesStrengths and accomplishments

Membership type and sizeMandateIntermediary

LEVERAGE

Build capacity

PERSUADE

CommunicateLe

vel o

f sup

port

For

Against

MOBILIZE

Assign roles and coordinate

Level of influenceLow High

CO-OPT

Inform and consult

Private sector

Intermediaries

Public Authorities

Civil society

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New tools for designand implementation

PPD Handbook

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Implementation : 12 key processes (PPD Charter)

1. Mandate and Institutional Alignment 2. Structure and participation3. Champions4. Facilitator5. Outputs6. Outreach and communications7. Monitoring and evaluation8. Sub national initiatives9. Sector-specific programs10. International role11. Post-conflict / Crisis / Reconciliation12.Development partners

A number of options to choose from

A number of good and bad practice to learn from

A number of decisions to implement

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New monitoring and evaluationframework

PPD Handbook

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M&E framework : Three scopes for PPD M&E

Organizational process effectivenesswith 24 indicators and 48 data points

Impacts on reform process

Economic impacts

Doing Business + customized indicators

Post Conflict

Mandate& alignment Structure &

participationDevelopment

partners

Monitoring

Facilitator

Champion

Outreach & communication

Outputs

Sub-national

Sector-specific

International role

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Testing the M&E framework

in the Mekong(Preliminary Results)

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Purpose of the Mekong PSFs evaluation

• Assess the impacts of the PSFs in three different manners: - Organizational processes and effectiveness- Political economic impacts on the reform process- Regulatory and economic impacts

• Identify lessons learned to replicate- Regional scaling - Sub-national applications- Sector-specific initiatives

• Provide guidance to- Further/streamline donor support the PSFs - Increase effectiveness at generating concrete results- Coordinate PSD programs around PSFs- Help PSFs drive more investments

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11017Forums held

2006: $210,0001999-2004 : $750,0002005-2006: $610,000

Period 2000-2007$400,000 (exc. IFC ind. costs)

Expenditures to date

474Working Groups

Committee for Planning and Investment – Chair: Dpty Prime Minister

Council for Development of Cambodia. Chair: PM

Min. of Planning and Invt; chair : Dpty PM, WB director, IFC director and VCCI; linked to CG

Institutional alignment

200619991997Start

LBF(Laos)

G-PSF(Cambodia)

VBF(Vietnam)

Mekong PSFs - Background

19 combined years of technical assistance - $2 million budget

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EARLY RESULTS

Phase 3Phase 2Phase 1

Results

Time

Permanent brokering

Institutions (e.g. RIA)

BMOs (e.g. CoC, RDAs)

Ownership without capacity

Exit

HIGH IMPACT

RESULTS

1 to 3 years 1 to 3 years

Laos

Cambodia Vietnam

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Vietnam Business Forum (VBF) - Format

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Executive Co-Chairs WG

•Discuss Issues

Chaired by PM

RGC Ministries

PPD

EnvironmentEnvironment

PS Assoc.

Others

• Agreed agenda on issues and

recommendations (law, sub decree,

prakas, decisions)• Direct operational

impediments

G-PSF

Law, Tax and Governance

Export Processing and Trade Facilitation

Services, including Banking and Finance

Tourism

Manufacturing and SMEs

Agriculture and Agro-Industry

Energy and Infrastructure

Employment and labor law enforcement

PSWG Secretariats

Chamber of Commerce

Business Associations

Co-Chaired by RCG Ministers and PS Rep.

Bi-annual meeting

PS Co-Chairs PS+ RGC

PSWG WG

• Broad consultation process agenda on

prioritized issues and recommendations

•Can meet directly PM for national importance issues

• Decide an agenda for GPSF

PS Co-Chairs

Operational Working Group

Private Sector Working GroupsPSWGWG Working Groups

G-PSF Government Private Sector Forum

RGC Royal Government of Cambodia

Private SectorPS

Private Sector DevelopmentPSD

Issues

Implementation

Steering Committee working on PSD

T.FSub Committee

C: MEFCC:MOCFac: WB

C: MICC:MOC/MEF

Fac: ADB

P.P InvSub Committee

S.M.ESub Committee

Inputs

PS Co-Chairs

•Reduction in Unofficial Costs•Amendments of law on o Investmentso taxationo Concessiono Corporate accounting/auditingo Government bonds

•Sub Decreeo Establishment and mgmt of SEZo Trade facilitation: risk mgmt and single admin doc

•Policy on SME

o $ valueo ∆business sentimento ↑relationshipso ↑trusto Etc…

•Benefits

Issues

Outcomes/Benefits

ExamplesWG

B&F

Tourism

M&SME

A&AI

E&I

LT&G

EP&TF

Issues & Rec Outstanding Issues

Executive Co-Chairs WG

•Discuss Issues

Chaired by PM

RGC Ministries

PPD

EnvironmentEnvironment

PS Assoc.

Others

• Agreed agenda on issues and

recommendations (law, sub decree,

prakas, decisions)• Direct operational

impediments

G-PSF

Law, Tax and Governance

Export Processing and Trade Facilitation

Services, including Banking and Finance

Tourism

Manufacturing and SMEs

Agriculture and Agro-Industry

Energy and Infrastructure

Employment and labor law enforcement

PSWG Secretariats

Chamber of Commerce

Business Associations

Co-Chaired by RCG Ministers and PS Rep.

Bi-annual meeting

PS Co-Chairs PS+ RGC

PSWG WG

• Broad consultation process agenda on

prioritized issues and recommendations

•Can meet directly PM for national importance issues

• Decide an agenda for GPSF

PS Co-Chairs

Operational Working Group

Private Sector Working GroupsPSWGWG Working Groups

G-PSF Government Private Sector Forum

RGC Royal Government of Cambodia

Private SectorPS

Private Sector DevelopmentPSD

Operational Working Group

Private Sector Working GroupsPSWGWG Working Groups

G-PSF Government Private Sector Forum

RGC Royal Government of Cambodia

Private SectorPS

Private Sector DevelopmentPSD

Issues

Implementation

Steering Committee working on PSD

T.FSub Committee

C: MEFCC:MOCFac: WB

C: MICC:MOC/MEF

Fac: ADB

P.P InvSub Committee

S.M.ESub Committee

Inputs

PS Co-Chairs

•Reduction in Unofficial Costs•Amendments of law on o Investmentso taxationo Concessiono Corporate accounting/auditingo Government bonds

•Sub Decreeo Establishment and mgmt of SEZo Trade facilitation: risk mgmt and single admin doc

•Policy on SME

o $ valueo ∆business sentimento ↑relationshipso ↑trusto Etc…

•Benefits

Issues

Outcomes/Benefits

ExamplesWG

B&F

Tourism

M&SME

A&AI

E&I

LT&G

EP&TF

Issues & Rec Outstanding Issues

Cambodian G-PSF - framework

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Lao Business Forum (LBF) - structure

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Direct Outputs of PSFs

-aligned to Asean standards – saved the industry about 11% of transport costs [tbc].

-Extended to 30 days vs. 15 days

- 3 million dollars saved by the PS (highway fee) – [tbc]

- Saved the Garment Industry $25 M

Circular 04 excluded management from limitation, and removed cap under special permissions.

After

-Elimination of Weight limit restrictions of trucks

-Visa policies

- Safety measures adopted for tourists (boat)

-Delay by 6 month a new tax (2%) on accommodation - reduced the highway fee from PP to the port of Sihanoukville- reduced telecoms tax from 10% to 3%- obtained 2-year tax free for Garment industry- Breach of trust

Input from PS in the Investment and Entreprise Law; Commercial Law; Land Law, Securities Law, Commercial Law.

Decree 105 limited the number of foreign employees to 3% of the total staff, with cap at 50.

Example of Outputs

-60 issues raised - 18 selected as high priority- 4 solved

- 826 issues raised between Aug 04 –June 06-315 addressed and not further discussed at the WG (38%)

- Number of legislative documents formulated

Outputs

Laos(LBF)

Cambodia(G-PSF)

Vietnam(VBF)

Country

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A leading and overwhelming majority of businesses to want its existence maintained and to financially contribute to the G-PSF.

To what extent should the G-PSF be maintained? Are you willing to financially contribute?

Cambodia

0%

26%

74%

0

0.2

0.4

0.6

0.8

Low Medium High

Cambodia

54%

46%

40%

50%

60%

Yes No

Cambodia G-PSF

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Implementation steps

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Phase 1: Desk Research Take stock / against the 12 points of the charter

Phase 2: Determination of indicatorsOrganizationsl process indicatorsReform process flows and stepsEconomic impact indicatorste

Phase 3: Private Sector Survey Sample : 100 in Cbd & Vn, 50 in Laos

Phase 4: In-Depth Interviews with informants

Phase 5: Report with recommendations

Using the M&E framework of the PPD handbook

The oil in the reform engine

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Add-on to other techniques

Reform Unit

RIA and regulation review process

SEZ

Office No. 1

Applicant

Files requestfor approval

Clerk 1

Reviewsapplication

anddocuments

Clerk 2

Receivesapplication

anddocuments

Paysfee

AssignsInspector

Receivesand reviewsInspection

Report

Clerk 4

Prepares &Transmits

Request forApproval orDeficiency

Letter

ReceivesRequest forApproval orDeficiency

Letter

Prepares Approval or

DeficiencyLetter

Clerk No. 3

Accepts fee

Issues Receipt

Forwards feefor deposit to

municipalaccount

Office No. 2 Office No. 3

Inspector

ContactsApplicant

ConductsInspection

PreparesReport

Sends copy toClerk 2

Clerk 5

MunicipalOfficial

Signs &Returns

Approval orDeficiency

Letter

TransmitsSigned

Approval orDeficiency

Letter

MailsApproval

orDeficiency

Letter

Process Mapping: An Illustration

ReceivesApproval or

DeficiencyLetter

Providescopy ofReceipt

Regulatory simplification

Value chainClusters

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Benjamin HerzbergSME Department

(202) 458-7846bherzberg@worldbank.org

Thank you!

Andrei MikhnevSME Department(202) 458 1970amikhnev@worldbank.org

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