TRANSFORMING MARKET SYSTEMS ACTIVITY FOURTH …

TRANSFORMING MARKET SYSTEMS ACTIVITY FOURTH QUARTERLY PROGRESS REPORT Quarter 2 – FY 2019
January – March 2019
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CONTENTS SECTION I: BACKGROUND ..................................................................................................................... 1 SECTION II: SUMMARY ........................................................................................................................... 2 SECTION III: PROGRESS .......................................................................................................................... 3 INCEPTION PHASE .................................................................................................................................... 3
Step 3.......................................................................................................................................................... 3 Step 4.......................................................................................................................................................... 5
Concepts under co-creation ARE: ................................................................................................................ 7 ACTIVITY COMPONENTS ........................................................................................................................ 8 COMPONENT 1 ........................................................................................................................................... 8
Promoting investment ................................................................................................................................. 8 Component 2: ................................................................................................................................................ 9
Improving traveler perception ..................................................................................................................... 9 Component 3: .............................................................................................................................................. 10
Influencing innovation .............................................................................................................................. 10 Component 4: .............................................................................................................................................. 12
Facilitating modernization and streamlining .............................................................................................. 12 TMS tests and calibrates its Organizational Capacity Development tool .................................................... 13 Honoring the International Women´s Day ................................................................................................. 13 Sharing strategic communication initiatives ............................................................................................... 14
SECTION IV: MONITORING, EVALUATION AND LEARNING........................................................ 15 WHAT IT IS ............................................................................................................................................. 15 2018 BASELINE DIAGNOSTIC RESULTS BRIEF ....................................................................... 15 DIAGNOSTIC INDICATORS .............................................................................................................. 16 FUTURE DIRECTIONS AND NEXT STEPS .................................................................................. 17
Researching resilience capabilities ............................................................................................................ 17 Development of ME&L Plan Version 3.0 .................................................................................................. 17
SECTION V: PROGRAM MANAGEMENT ............................................................................................ 18 SECTION VI: LOOKING FORWARD ..................................................................................................... 19 SECTION VI: FINANCIAL INFORMATION ......................................................................................... 20 SECTION VIII: ANNEX ............................................................................................................................ 22
Transforming Market Systems Activity Quarterly Report January – March 2019
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ABBREVIATIONS
AHACI Honduran Association of Freight Forwarders and International Logistics Operators AHLA Honduran Airlines Association AMCHAM American-Honduran Chamber AMHON Association of Municipalities of Honduras APHIS Animal and Plant Health Inspection Agency BANHPROVI Banco Hondureño para la Producción y la Vivienda BEE Business Enabling Environment CANATURH Honduran National Chamber of Tourism CDE Centro de Desarrollo Empresarial CDCS Country Development Cooperation Strategy CIES Center for Economic and Social Research CLA Collaboration, Learning and Adapting CLADS Latin American Center for Competitiveness and Sustainable Development CLIR Climate, Legal and Institutional Reform CNI National Investment Council COHEP Consejo Hondureño de la Empresa Privada CSP Contracted Service Providers DO Development Objective FEDECAMARA National Federation of Commerce and Industry Chambers FENAGH Federación Nacional de Agricultores y Ganaderos de Honduras FUNDER Fundación para el Desarrollo Empresarial Rural GBV Gender-Based Violence HAVE Vehicle Leasers Association HOPEH Association of Honduran Small Hotels IDB Interamerican Development Bank IDIQ Indefinite Delivery, Indefinite Quantity IFAD International Fund for Agricultural Development IIES Institute for Social and Economic Research IHT Honduran Institute of Tourism ILO International Labor Organization ME&L Plan Monitoring, Evaluation, and Learning Plan MESCLA M&E Support for Collaborative Learning and Adapting MIPYME Micro, Pequeña y Mediana Empresa MSME Micro, Small and Medium Enterprises OPTURH Honduras Inbound Tour Operators Association P&IF Partnership and Innovation Fund SAG Secretary of Agriculture and Livestock SDE Secretary of Economic Development SENASA National Health and Food Safety Service SME Subject Matter Expert SNA Social Network Analysis TMS Transforming Market Systems Activity UNAH National Autonomous University of Honduras UNDP United Nations Development Program USAID United States Agency for International Development VAA Value-added Agriculture
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SECTION II: SUMMARY The most significant developments and accomplishments resulting from TMS implementation during the reporting period include the following:
v TMS completed Step 3 of the Activity’s Inception Phase.
v TMS completed Step 4 of the Activity’s Inception Phase.
v TMS added five new activities to its portfolio of Task Order 1 pilot projects for a total of 12 activities under evaluation and co-creation.
v TMS submitted the first four packages of Market Actor Assessment (due diligence) to USAID for approval.
SECTION III: PROGRESS INCEPTION PHASE
Step 3
TMS Inception Phase is completed. Under Step 3, TMS finished baseline data collection and analysis for the Honduras Market Systems Diagnostic and the report is currently under peer review. Step 3 began in November of 2018 through a multi-stakeholder co-creation process to design and implement its market systems baseline diagnostic; an ambitious, first-of-its kind project. The main co-creation partners are the Honduran Council of Private Enterprises (COHEP) through its Center for Economic and Social Research (CIES) which also received key input from INCAE Business School’s Latin American Center for Competitiveness and Sustainable Development (CLADS), USAID/Honduras, the USAID/Honduras MESCLA Activity, and TMS partner EcoVentures. The diagnostic analyzes changes in market structures and enterprise behaviors to understand how and whether the market system as-a-whole is changing to become more inclusive, competitive and resilient. The methodology applied was a survey of a statistically-representative sample of enterprises across diverse market functions e.g. value-addition and wholesale/distribution that, in aggregate, allows for system-level observations. The diagnostic included slow-and-fast-paced variables that reflect competitiveness (e.g. sales growth, export diversification, customer retention, pricing power); inclusion (e.g. marginalized ownership, quality of work, diverse hiring); and resilience (e.g. occurrence of shocks, degree of recovery, supply chain redundancy). Through findings from the baseline assessment, both TMS and COHEP, are better able to understand constraints and opportunities in the market systems related to target sector and components, and how these affect issues related to economic inclusion and opportunity that will address the drivers or root causes for migration. In January, enumerators in charge of collecting field data were trained by TMS’s, CIES’s and CLADS’s experts. The two-day training included understanding of the market system diagnostic questions, data collection protocols, and the survey’s field test with representative firms identified by COHEP. The baseline’s diagnostic data collection launched on January 21st.
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COMPONENT 2:
Improving traveler perception
TMS participated in the annual general assembly of the Honduran National Chamber of Tourism (CANATURH) on February 6th hosting a special session about TMS’s strategy to leverage user- generated-content (UGC) data from popular, mainstream travel website(s) to boost Honduras’s competitiveness and development of local tourist destinations. Over 35 national tourism enterprises and 26 representatives from NGOs and institutions attended the event. , CANATURH’s President, publicly highlighted the CANATURH-TMS partnership programmed for 2019 and described it as being an innovative initiative. TMS also discussed its tourism and creative industries strategies with the National Tourism Council during its annual assembly on February 7th. The Tourism Council is Honduras’s highest tourism entity with representation from private and public institutions, including Tour Operators, the Association of Honduran Small Hotels (HOPEH), Honduran Airlines Association (AHLA), Vehicle Leasers Association (AHVE), Restaurants Association, the Honduran Institute of Tourism (IHT) and CANATURH. On Friday March 22, TMS met with the Honduras Inbound Tour Operators Association (OPTURH) to discuss a proactive approach to improve travelers’ perception of Honduras. Although security in Honduras has improved substantially in the last few years, there is still a strong perception by travelers that the country is a very violent and politically unstable destination. The perceived risk for a destination is an important factor on travel decisions. Honduras’ negative reputation inhibits tourism and constrains job growth and investment. Given that brand equity is the basis for all tourism promotion, inbound tour operations tend to be amongst the most affected parties due to Honduras’s negative reputation. Examples of how businesses are affected by the negative reputation include recent last-minute tour cancelations and requests to remove Honduras from regional tour programs. OPTURH sought TMS assistance to improve Honduras perceived online reputation, increase the average length of stay of tourists in Honduran and regional tours traveling to more than city, and persuade new wholesalers to include Honduras in its programming.
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non-traditional financing; strengthen rediscount mechanisms, trusts and guarantee funds to facilitate access to credit; regulatory reforms that stimulate credit to entrepreneurs and start-ups; financial education.
• Entrepreneurial culture: Integrating values, skills and abilities of the entrepreneur into the formal and non-formal educational system; identify successful entrepreneurs to systematize their cases; promote entrepreneur training programs through non-formal education; national and international exchange programs
• Education system: Training teachers on entrepreneurship issues; creating a national curriculum on entrepreneurship; role of the education sector on research, innovation and entrepreneurial development; creating a stepped entrepreneurship environment; links between academic, commercial and industrial sectors.
The entrepreneurship policy is considered of utmost importance to strengthen the entrepreneurial ecosystem, promote the generation of employment, social inclusion, innovation, and competitiveness in the productive sector. Also, the law will allow the Government of Honduras (GOH) to be in line with United Nations Sustainable Development Goals No. 1 and No. 8. Technological Innovation of Financial Services. On occasion of the first national congress for Digital Transformation of Finances (February 21-22), Honduran President, Juan Orlando Hernández, established financial digitalization as a key element for the immediate development of the Honduran economy, and the President of the Central Bank of Honduras, , announced the creation of an ad-hoc Board for the discussion of financial innovation (FINTECH). The Coordinator for the Financial Innovation Board, , invited TMS to formally participate in FINTECH as part of a group of institutions to: a) evaluate a new project to reform the law that regulates electronic payments, b) create a permanent forum to evaluate its application, and c) support the national strategy of financial inclusion.
Pilot interventions stemming from the Entrepreneurship Action Plan under co-creation with partners and stakeholders included:
• Piloting rural business models focused on innovation and technology, in alliance with the Lempa Center for Enterprise Development,
• Promotion of e-commerce platform for MSMEs.
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FUTURE DIRECTIONS AND NEXT STEPS • Engage academic staff and students at UNAH to explore data, publish articles and integrate findings within curriculum. Move towards where UNAH is the primarily entity responsible for data collection and analysis.
• Explore pathways to establish a think tank function in the market system, whereby COHEP and/or partners are proactively consulted on new regulatory initiatives and can serve as an informed voice of private sector.
• Add-drop-adapt variables for 2019 based on 2018 results in consultation with a broader set of stakeholders to evolve diagnostic to ‘best fit’ for the Honduran market system. Integrate new data sources.
Researching resilience capabilities
During the week of March 18 to 22, , at the University of California at Berkeley, worked with the TMS ME&L to analyze the level of resilience that companies have when confronted by the crime of extortion. The workshop to analyses this issue was co-designed by TMS, MESCLA, USAID/Honduras, and USAID/Washington staff. The analysis included interviews throughout the week with Fuerza Nacional Anti Maras y Pandillas (National police anti-gang unit), the Dirección de Operaciones de Policía Nacional de Honduras (National Police Operations Office), the State Department International Narcotics and Law Enforcement Affairs Section, INICIO (University Institute for Democracy, Peace and Security), Cámara de Transporte de Carga de Honduras (The Honduran Chamber of Transportation), Asociación de Transporte Interurbano de Honduras, (Honduran Association for Inter-Urban Transportation), Cámara de Comercio de Industrias de Choloma (Choloma Chamber of Commerce and Industry), and multiple enterprises affected by extortion.
Development of ME&L Plan Version 3.0
Based on the diagnostic and Inception Phase Steps 2 and 4 outcomes, TMS consulted with ME&L experts as part of an iterative process to prepare for TMS ME&L Plan version 3.0. Through the support of the USAID/Honduras MESCLA Activity, TMS connected with from MesoPartners to agree upon the research priorities for his consulting assignment to collect evidence of other market system monitoring interventions to determine the best fit for TMS. TMS hosted a call with , a
for the International Labor Organization (ILO)’s Lab for Market Systems Development and Decent Work, to discuss options to measure job quality for rates of self-employment in Honduras. In addition, TMS reached out to RTI International to learn about their USAID Haiti LEVE project development and the use of Type I and II multipliers, applying input-output (IO) models for the textile sector. Finally, TMS contacted , who is working with the Bureau for Food Security and the Center for Resilience to apply USAID’s guidance on market systems resilience measurement.
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SECTION VI: LOOKING FORWARD The most salient activities planned for the following quarter are:
v Launch indicator dashboard, publish whitepaper and disseminate findings with COHEP and its affiliated chambers.
v Submission of Version 3.0 of the Monitoring, Evaluation, and Learning Plan
v Start implementation of the pilot projects under co-creation.
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PUBLIC-PRIVATE COLLABORATION IN POLICY REFORM LEADS TO POSITIVE ECONOMIC IMPACT
TMS Facilitating Public-Private Collaboration to achieve economic impact.
TMS Team working with AMOHN to maximize economic impact in the San Marcos Municipality
Co aborat on among d fferent pub c and pr vate assoc at ons s key to ensure lasting cultural change on how civil society impact economic and public policy reform. Nowhere is the need for this to happen more relevant than present day Honduras.
In Honduras there are very few recent nstances of successfu and effective inter-organizational collaboration. Most civil society advocacy for business-friendly reforms has been atomized or rendered ess effect ve by the ack of jo nt strateg c p ann ng and information sharing.
Th s background marks the recent dec s on to work together made by the Municipal Association of Honduras (AMHON), the leading oca governm ent organ zat on represent ng a of Honduras 298 municipalities, and the national Council for Private Enterprise (COHEP), the main private sector “umbrella” association; as a pioneering milestone which TMS worked diligently to achieve.
Both organizations have joined forces to improve efficiency and break barriers for economic growth in Honduran municipalities. According to , of COHEP “… the administrative simplification in municipalities is a subject of great importance for the economic growth and development of the country”. The first step in the collaboration process was the s gn ng of a Memorandum of Understand ng between AMHON and COHEP, which took place in February 2019. TMS supported the draft ng of the MOU and the schedu ng of subsequent meet ngs between both organ zat on and TMS beg nn ng March 2019.
The r co aborat on w n t a y focus on mprov ng the ease of do ng business in selected municipalities, particularly those with more advanced management systems and nst tut ona strateg c p ann ng. Act v t es w may nc ude sett ng up one-stop-s hops for bus ness cens ng, the rat ona z at on of mun c pa revenue p ann ng (“planes
de tasas y arbitrios”), and incorporating entrepreneurship development into municipal local development strategies.
TMS has been nstrument a n th s co aborat on n t at ve from ts ncept on, hav ng he ped br ng ng both s des together to exp ore common nterests and empower ng the r budd ng a ance w th
SECTION VIII: ANNEX
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spec f c object ves and goa s, as we as offers of techn ca ass stance. TMS identified early AMHON’s critical need to sustain their ability to prov de serv ces to the r members on strateg c p ann ng at a t me the nat ona governm ent was decentra z ng oca fund ng and turned t into an opportunity for them to work together with COHEP, an institution looking at the same time for a way on how to influence oca governm ent strateg es for bus ness-fr end y reforms dur ng the decentralization process.
A key end result expected for this initiative is that the lessons earned and methodo og es gathered from ts efforts w rema n the nte ectua asset of both organ zat ons to a ow for the r rep cat ng among other municipalities outside the impact area of the TMS project and long after the project has run its course.
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TRANSFORMING MARKET SYSTEMS ACTIVITY FOURTH …