Local Economic Development What have we achieved? Objective: Public and private stakeholders in selected Provinces implement essential promotional policies and activities Indicators: 1. At least twice yearly biz fora take place to promote cooperation between government and biz community 2. 4 (anticipated) innovative instruments to promote investment and business start ups are being applied 3. At least 3 factors relevant to business activity have improved in each selected provinces (PCI-USAID). 4. Result of pilot implementation have been transferred to at least 5 more provinces Intervention areas: 1. Dialogue forum between public and private sectors 2. Political and administrative framework conditions are improved 3. Capacity building on LED tools and LED related topics 4. Promotion structures and Strategies for Priority Sectors 5. Investment and Business Start-up promotion strengthening 6. PPP: Formulation of the Public Private Partnership model (PPP) 7. Development of Local Business Associations Outcome Leads to reduced time and costs for registering and setting up an enterprise Higher rating of the 4 provinces in PCI Increase in no. of enterprises and investment Increase in Employment

Local Economic Development What have we achieved? Indicator 1: Regular biz Fora: A new format of business forum (Public private Dialogue-PPD) has been piloted in Hung Yen last year and will be continued. To be applied in Quang Nam, An Giang and Hung Yen this year. The format has been introduced to more than 20 biz associations in June 2008 and published in brochure of LED component. VCCI will try to “institutionalize” PPD and assessment tool for Biz Associations. Indicator 2: Innovative instruments: Development of investment promotion materials for provinces (Business Portal, brochure, CD-ROM, standard investment promotion presentation) and several events, promotion tours for investment. Pool of LED consultants was developed (PACA consultants, RED Managers). GHK institutionalized with SMEDEC, high potential in An Giang and Hung Yen. CEFE very popular but not entirely sustainable. Sector Reasons tourism good business environment (political and economic stability) and tourist potential strong growth tendencies promoted by the government interest by foreign investors Software industry growth tendencies and new start-ups tax incentives by the government reinforced outsourcing tendencies of other countries national qualification programme (under restriction) Telecommu- nicattion/ information sector strong expansion in the past years and increasing demand increasing competition through privatisation and interested foreign investors

Indicator 3: Improvement of 3 sub-indices of PCI In all 4 provinces at least 3 sub-indices of PCI, which the program has influence on, have improved. Entry Costs Transparency Time Costs Proactivity PSD Services 2005 2007 An Giang 6.36 7.76 4.1 6.93 4.64 5.61 7.71 4.18 7.74 Dak Lak* 6.48 7.32 4.99 6.31 4.83 5.3 5.87 3.3 5.27 5.01 Hung Yen 7.73 7.19 5.34 7.07 6.28 6.6 6.01 5.25 3.08 5.44 Quang Nam 6.23 8.76 4.65 6.63 5.23 6.26 7.01 6.89 7.03 6.67 Obs: the data for Dak Lak is only available from 2006 onwards.

Local Economic Development What have we achieved? Indicator 4.: Transfer of instruments to a least 5 other provinces Instruments/products like Local coordination board, Public Private Dialogue, Biz Portal and PACA have been taken over by more than 5 other provinces (Nam Dinh, Quang Binh, GTZ/IFAD Tra Vinh, GTZ Poverty Daklak, Hai Phong). Financed by own sources, other GTZ projects or other donors. Capacity building Capacity building for public and private partners at the local level (inland and abroad) in such fields as investment promotion, leadership skills, presentation and communication skills, association management, regional economic development, PACA, GHK,… Several initiatives to increase “learning from each other” and networking by organizing joint trainings, study tours to other provinces or events to exchange experience Knowledge Management SMEDP intends to systematize successful products/instruments. For the LED component these are: Public Private Dialogue, Local Coordination Board, BusinessPortal, LED process in An Giang.

Local Economic Development What have we achieved? What did the project progress review say? Component is on track (but different achievements in different provinces). Most of the indicators expected to be met until the end of phase. Process-oriented (sometimes supply driven), multi-level, flexible and participatory approach with long-term perspective appreciated by partners. Overall strategy process to describe a LED approach for Vietnam still under construction. National owner for LED component is lacking. Local Coordination Boards at provincial level – accepted as coordination mechanism of SME Action Plan. Strong ownership at the local level. Selected projects on district level (lighthouse projects): e.g. in investment promotion, tourism, start-up promotion, good housekeeping important to “show concrete results”. Good cooperation with Component 1 (business registration, business portals): link between macro and meso/micro level. Dissemination of good practices and selected instruments to other provinces (e.g. in the Mekong-Delta region). High recognition amongst donors.

Lessons learned Support of the political level in the Province (PPC) is crucial. Different conditions for LED in different provinces need different approaches and lead to different speed in implementation. Too many isolated interventions can lead to a loose-end approach far from achieving the expected impact (f. ex. tourism) Weak business associations limit joint projects/coordination of activities between public and private sector. Special strategies are needed to motivate and involve private stakeholders. LED is a multi-sectoral and multi-level approach; there is no natural “owner” and the link to the national level is lacking.