The GTZ Philippines Experience: Convergence of Donor Assistance towards developing the SME Sector Martina Vahlhaus Program Manager, SMEDSEP

2 Background: The Paris Declaration on Aid Effectiveness Objectives –improve effectiveness of development cooperation –Contribute to achieve Millennium Development Goals 4. Results (mutual accountability) 3. Harmonization (donors – donors) 2. Alignment (donors – partners) 1. Ownership (partner countries) Partners set the agenda Aligning with partners’ agenda Using partners’ systems Establishing common arrangements Simplifying procedures Sharing information

3 Ownership: Partners (DTI) set the Agenda SMED Plan and SMED Action Plan are owned by the SMED Council, DTISMED Plan and SMED Action Plan are owned by the SMED Council, DTI Donors respect DTI’s policies and help strengthen their capacity to implement (result oriented) and monitor resultsDonors respect DTI’s policies and help strengthen their capacity to implement (result oriented) and monitor results Since Feb. 2006Since Feb –DTI Usec. Mel Alonzo has taken the lead in donor-co- ordination –The DTI Secretary has taken leadership with regard to streamlining of business licensing/registration (as announced during the final plenary of the Philippine Development Forum last March 06) 4. Results (mutual accountability) 3. Harmonization (donors – donors) 2. Alignment (donors – partners) 1. Ownership (partner countries) Partners set the agenda Aligning with partners’ agenda Using partners’ systems Establishing common arrangements Simplifying procedures Sharing information

4 Alignment: with Partners’ Agenda, within Partners’ System 2004 – donors try to align to SMED Plan (matrix, difficult, too many activities) 2005 – SMED- Council/DTI/partners prioritize the SMED Plan (CIDA and GTZ) SMED Plan 48 Activities SMED Action Plan 10 Groups Provinces 4. Results (mutual accountability) 3. Harmonization (donors – donors) 2. Alignment (donors – partners) 1. Ownership (partner countries) Partners set the agenda Aligning with partners’ agenda Using partners’ systems Establishing common arrangements Simplifying procedures Sharing information

5 SME Action Plan Activity Groups Activity Group Donor / Progress Cover- age* 1 – SME Information Support ADB, CIDA N 2 – SME Counseling and Advisory and Upgrading of SME Centers CIDA, JICA, GDC, USAID N, V, M 3 – Facilitating Partnership / Linkages for Competitiveness ILOL 4 – Enhanced Support for Trade Fairs & Access to Market Services 5 – Product Development and Design Services JICAN 6 – Increased Productivity and Quality 7 – Information Technology Appreciation and Application 8 – Entrepreneurship Training CIDA, ILO N, L, V, M 9 – SME Financing Support Programs ADB, CIDA, GTZ, IFAD, IFC, KfW N, V, M 10 – Streamlining of Business Regulatory Requirements CIDA, GTZ, IFC, TAF, USAID, ILO N, L, V, M Alignment: with Partners’ Agenda, within Partners’ System 4. Results (mutual accountability) 3. Harmonization (donors – donors) 2. Alignment (donors – partners) 1. Ownership (partner countries) Partners set the agenda Aligning with partners’ agenda Using partners’ systems Establishing common arrangements Simplifying procedures Sharing information *N = National, L = Luzon, V = Visayas, M = Mindanao

6 ADB developing a National Business Registry that links business databases of national agencies (BIR, SSS, NSO, etc.) and LGUs CIDA Local Governance Support Program (LGSP) in ARMM; and the Local Governance Support Program, Phase 2, Pearl2, Business Advisory Project (BAP), Corporate Volunteers for Enterprise Dev (CVED), and Promoting Rural Industries and Market Enhancement (PRIME) IFC PEP* to provide technical assistance to Mindanao in investment promotion capacity, SME-Finance and support to Agro-business (Value Chain) ILO assisting selected LGUs in implementing employment generation programmes and adopting DOLE’s Labour Standards Enforcement Framework JICA “Management Consulting Program for SMEs” tech. cooperation project capacity building of DTI-SME Counselors, SME Policy Advice to DTI-BSMED, and improving packaging technology tech. cooperation project with DOST GDC Focus Visayas: (GTZ) Small and Medium Enterprise Development for Sustainable Employment Program (SMEDSEP) Business Licensing, SME Finance, BDS, (KfW) Soft Loan for SMEs + TA to SBC, other GTZ: Eco-Industrial Developement with PEZA, Decentralisation Program; plus DED, CIM and InWent capacity building (BDS/LRED) USAID capacity building of business support organizations and trade associations all over Mindanao through the Growth with Equity in Mindanao (GEM) Project, Transparent Accountable Governance Project (implemented by TAF) on streamlining of Business Permits and Licensing Processes in 16 cities in Mindanao *funded by CIDA, AusAID, and World Bank Alignment: with Partners’ Agenda, within Partners’ System 4. Results (mutual accountability) 3. Harmonization (donors – donors) 2. Alignment (donors – partners) 1. Ownership (partner countries) Partne rs set the agend a Aligning with partner s’ agenda Using partner s’ system s Establishing common arrangements Simplifying procedures Sharing information

7 Harmonization: Establishing Common Agreements, Sharing Information Donors and DTI agreed to focus on Activity No. 10 “Streamlining of Business Regulatory Requirements” with their action plan” (1 year)Donors and DTI agreed to focus on Activity No. 10 “Streamlining of Business Regulatory Requirements” with their action plan” (1 year) Donors and DTI agree on common action plan for streamlining business registrationDonors and DTI agree on common action plan for streamlining business registration Common analysis (Consultative Working Group)Common analysis (Consultative Working Group) Sharing of Good Practices (Handbook for LGUs)Sharing of Good Practices (Handbook for LGUs) Advocacy activitiesAdvocacy activities Supporting selected LGUs in StreamliningSupporting selected LGUs in Streamlining Capacity Building for accelerating smooth business registration (Training of SME Counselors)Capacity Building for accelerating smooth business registration (Training of SME Counselors) 4. Results (mutual accountability) 3. Harmonization (donors – donors) 2. Alignment (donors – partners) 1. Ownership (partner countries) Partners set the agenda Aligning with partners’ agenda Using partners’ systems Establishing common arrangements Simplifying procedures Sharing information

8 Results and Mutual Accountability 4. Results (mutual accountability) 3. Harmonization (donors – donors) 2. Alignment (donors – partners) 1. Ownership (partner countries) Partners set the agenda Aligning with partners’ agenda Using partners’ systems Establishing common arrangements Simplifying procedures Sharing information Message from the Mayor and BPLO Chief of Ormoc City on Business Registration Streamlining

9 Results and Mutual Accountability Outlook and Results Development of a Common Monitoring Framework – –Performance Assessment – –Measure progress against accountability 4. Results (mutual accountability) 3. Harmonization (donors – donors) 2. Alignment (donors – partners) 1. Ownership (partner countries) Partners set the agenda Aligning with partners’ agenda Using partners’ systems Establishing common arrangements Simplifying procedures Sharing information Action Plan What results Lessons SMED Activity Groups 1-10 learned achieved? Implemented

10 Results and Mutual Accountability Outlook and Results 2005 World Bank Report2005 World Bank Report Minimum of 11 procedures and 48 days to registerMinimum of 11 procedures and 48 days to register QuestionsQuestions –Business regulations? –How many days does it take? –Does this reduce the time? –What are the costs for …? –Are sufficient information and instructions available? 4. Results (mutual accountability) 3. Harmonization (donors – donors) 2. Alignment (donors – partners) 1. Ownership (partner countries) Partners set the agenda Aligning with partners’ agenda Using partners’ systems Establishing common arrangements Simplifying procedures Sharing information Action Plan What results Lessons SMED Activity Groups 1-10 learned achieved? Implemented Activity Group 10