Chapter 9

An International Comparison of Industrial
Master Plans ∗This chapter reviews the structural format of industrial master plans of developing
countries, mainly from Asia, and offers some ideas for improving them.

Manystudies have analyzed particular development policies or particular policy
documents in specific countries.

However, studies that pay primary attention to themethodology of industrial policy formulation are few, and international comparisonsof policy methodology are even rarer. Nevertheless, such information is extremely
useful for latecomer countries that wish to conduct proactive industrial policies for
economic take-off.

If a policy document is produced without serious considerationof overall design, its content, style, length and structure may end up reflecting thewhims of ministries or donors—and even individual drafters—that happen to be
assigned to the task.

As a result, the policy document may suffer from a lack offocus, relevance or implementability.

To avoid these problems, careful thinking isneeded before drafting an industrial master plan or strategy.

The author hopes that

this research will prove useful to interested policy makers.

9-1. Master plan types
Industrial master plans1 can be classified broadly into the following four types.

∗

1This chapter was prepared in November 2009 at the request of Prime Minister Meles Zenawi and Dr.
Newai Gebre-ab, Senior Economic Advisor to the Prime Minister, of the Federal Democratic
Republic of Ethiopia in the context of bilateral policy dialogue between Ethiopia and Japan. Data
collection and analysis by Ms. Ayako Ishiwata (senior consultant, Because Institute Co., Ltd.) and
Ms. Sayoko Uesu (research associate, GRIPS Development Forum (GDF)) are highly appreciated.
The GDF bears full responsibility for the content of this document including any remaining errors
and omissions. The coverage of master plans is limited due to the time constraint in preparing thisstudy.
Master plans are alternatively called policies, strategies, strategic plans, roadmaps, blue prints, etc.
In this paper we regard all official documents that contain policy targets, analyses, and actions with atime span of a few to several years as master plans.

219

CHAPTER 9(i)Overall industrial master plans—these cover multiple industrial activities.
Some of them feature sectoral chapters (electronics, machinery, foodprocessing, etc.) while others are organized into issue-oriented chapters(technical and vocational education and training (TVET), technology, small
and medium enterprises (SMEs), etc.). Not all countries produce this typeof master plan, and the coverage of industries differs from one plan to another.

(ii) Sector-specific master plans—these are master plans for the developmentof one specific industry such as textile and garment, food processing,electronics, and so on.
(iii) Issue-specific master plans—these are strategies targeting cross-cutting
aspects of national industrial development such as transport and logistics,
information technology, small and medium enterprises, education and training,and so on.
(iv) Regional development master plans—these are strategies for the industrial
development of particular regions, corridors, economic zones, and othergeographically delineated areas.
There may be other variations and combinations of these basic types.
be regarded as an amalgamation of the other types.

Type (i) canIn this paper we mainly

discuss the first three types.
Apart from these policy master plans, there are also technical master plans that
stipulate physical dimensions and proper technology and equipment requirements
for large investment projects such as highways, steelworks, power plants, industrial
estates, and so on.

These technical blueprints are beyond the scope of our analysis.

9-2. Chapter components
Policy-oriented industrial master plans normally have the following components.

220

An International Comparison of Industrial Master Plans

Table 9-1. Ingredients of an Industrial Master Plan
VisionImportance, role, orientation, and positioning of industry innational development

Targets

Long- and medium-term numerical and/or qualitative targets

Situation analysis

Current status, potentials and obstacles of the domestic
industry in the national, regional and global context; tables
and graphics for data, surveys, international comparisons,etc.

Policy issues

A small number of selected issues should be identified,prioritized, and analyzed in preparation for designing policy
actionAction plan or
action mechanism

A large matrix that pre-specifies actions, sub-actions,
expected output, success criteria, deadlines, and responsibleorganizations; procedure for monitoring and reporting should
also be specified.
Alternatively, a monthly high-level committee chaired by top
leader, or a well-focused and well-coordinated budgeting andproject approval process may substitute the action plan
matrix.

Each of these components may occupy either one chapter or a number of chapters.
The order of these components is somewhat flexible.

For example, targets may beinserted after situation analysis and policy issues.

However, the vision should

most properly be stated at the outset and the action plan matrix (or the action
mechanism) should come at the end.

The terminology is also flexible andsubstitutable by other phrases of similar connotations.

In addition to basic

components, there may be other materials such as preface, introduction, table ofcontents, list of tables and figures, drafting procedure and organization, executive
summary, appendices, and so on.

These materials are not considered in our

analysis.
(i)

Vision2—the master plan must clarify the purpose of industrial promotion.
This includes why this industry is important in national development, whatrole it should play in stimulating other sectors, what positioning it should

2

Vision is sometimes stated in a layered structure consisting of vision, missions, and objectives. Thisis acceptable but not compulsory.

221

CHAPTER 9take in the global, regional, and national markets, and so on.

If these

purposes are already presented in other documents and widely understoodamong stakeholders (such as Agricultural Development Led Industrialization(ADLI) and the Industrial Development Strategy (IDS) in the case of
Ethiopia), they can be mentioned only briefly without spilling much ink.
On the other hand, if these are not yet sufficiently expressed, the masterplan should clearly and concisely state the importance of the industry.
This section should be no more than a few pages.

One way to state thevision is to present it as part of the introductory chapter.
[Example: Vietnam’s Draft Motorcycle Master Plan states its vision as
follows.

“Motorcycles should continue to be used to ensure people’s

mobility and reducing infrastructure cost per year, provided that soundand sustainable solutions are found and effectively implemented to copewith traffic congestion, traffic accidents, environment, and industrial
property rights. At the same time, the motorcycle industry should become
the principal industry by which supporting industry base is built andindigenous industrial capability is promoted.”(Vietnam 2, p.20).

The Thai Automotive Mater Plans for 2002–2006 as well as for 2007–2011
continue to carry the same vision: “Thailand is the automotive production
base in Asia which creates more value added to the country with strong
automotive parts industry.”(Thailand 2, Executive Summary p.2)](ii) Targets3—long- and medium-term targets, quantitative and/or qualitative,
should be presented with a clear time frame, which should normally extend
over a few to several years.

The appropriate scope and number of thesetargets, including how many numerical targets should be set with how muchdetail, depend critically on the characteristics of the sector in question as
well as the capability of the government and the private sector of that country.
For this reason, there is no fixed formula applicable to all master plans for
all countries.
3

Generally speaking, there should be fewer (numerical)

Targets are also called goals, objectives, strategies, action plans (different from “action plans” in9-2-(v) below), and so forth. We regard all of these as “targets” as long as they describe somequalitative or quantitative aims to be achieved.

222

An International Comparison of Industrial Master Plans

targets if the industry is not capital-intensive, the market and prices
are unpredictable, the industry produces final consumer goods, the domestic
private sector is mature, policy capability is weak, and the private sector
does not trust the government.

Before setting any targets, policy makers

should have a thorough discussion with all stakeholders, including private
businesses and experts, for the proper configuration of such targets (seesection 9-4 for more discussion).
[Example: The Thai Automotive Master Plan 2002–2006 had the following
numerical targets for the ending year 2006.

(i) Produce 1 million cars

(700,000 one-ton pick-up trucks and 300,000 passenger cars), with 40%
exported; (ii) produce 2 million motorcycles valued over 100 billion baht,with 20% exported; (iii) export 200 billion baht of high-quality spare parts;and (iv) localization (percentage of local value-added) of produced vehicles
and parts should be 60% (Thailand 1, p.2). This was the entire set of targets
and not the summary of more detailed ones.

Numerical targets for theintervening years of 2002–2005 were not set.](iii) Situation analysis—information must be given to analyze the current status,
potentials, and obstacles of the domestic industry in question. Data should
be presented in tables and graphics, the results of surveys and benchmarking
should be reported (if available), and theories and empirical analysis should
be cited (if relevant).

Information should not be included randomly but

inserted with a clear purpose of making certain points. Routinely reviewed
aspects include the past performance of output, capacity, demand, export
and import, localization, etc; the current status of product mixes, producers,
regional distribution of production units, quality, competitors andcompetitiveness, and impediments to further development; demand forecast(possibly with alternative scenarios); and global, regional or domestic market
trends that may impinge on the development of the industry.

Theappropriate selection of these analyses depends on the degree ofunderstanding and consensus among stakeholders.

If businesses, policy

makers and experts generally agree on the current position of the domestic
industry, situation analysis can be brief with minimal pages or even skipped.
223

CHAPTER 9

If, on the other hand, policy formulation is in an early stage and stakeholders
do not yet share basic information, situation analysis becomes an integral
part of the master plan.
[Example: In Indonesia’s National Industrial Development Policy, situation
analysis is contained in three chapters to review the conditions of both export
potential industries (natural resources intensive industries, labor intensive
industries, capital intensive industries, and technology intensive industries)
and domestic market potential industries.

This section occupies 71 pages,

which is 30% of the 238-page document (Indonesia 1).](iv) Policy issues—after the industry situation is reviewed comprehensively in(iii), specific aspects that need to be fortified by policy to realize vision (i)and targets (ii) above must be identified, prioritized, and analyzed.

The

issues may involve either removal of negatives or strengthening of positives.
Then action must be proposed (later to be elaborated into detailed actionplans (v)). Obviously, which issues are most important cannot be prejudged
because circumstances differ from one industry to another and from one
country to another.

Here, the common agenda from which the policy

maker should carefully choose is listed.

They are skills and technology,

cost reduction, quality improvement, product design and development, input
procurement (including localization and supplier policy), marketing, export
promotion, infrastructure (especially transport and power), financing(including the use of official development assistance (ODA) and externalborrowing), limitation of domestic market size, labor supply and workers,
coping with cheap imports and dumping, speed and scope of globalizationand international commitments, foreign direct investment (FDI) policy,
tariff policy, design of incentive measures, certification and award systems,
legal reforms, international standards (the International Organization forStandardization (ISO), quality, environment, accounting, etc), SME support,
business matching, industrial associations, public private partnership, useof ICT, testing centers, and so on. The most relevant topics for the industry
in question should be identified and discussed among stakeholders.

It isimportant to work on prioritized issues only rather than cover all issues
224

An International Comparison of Industrial Master Plans

broadly and superficially.

Issues raised here should be given concrete

solutions in the following action plan section.
[Example: discussion of policy issues is the main part of India’s National
Strategy for Manufacturing 2006–2015 (India 1).

It occupies 61 pages,

which is 78% of the 78-page document, and covers 12 topics including
macroeconomic stability, education and skill building, investing in innovationand technology, and so on.

This may be a little too much from the pointof view of selectivity and concentrated effort, but it may be helpful forforming consensus on key issues.](v) Action plan or action mechanism—an action plan matrix or an action
mechanism is essential to ensure implementation.

An action plan matrix

is a large table that translates analyses and proposals conducted in previous
chapters into concrete actions.

It may be included in the master plan text

(as in Thailand 1) or prepared in a separate document (as in Zambia 1).
Either way, it is crucial that its progress is monitored and reported to thegovernment at regular intervals. Two sample formats of action plan matrices
are presented below.

The matrices typically contain the following cells:

actions, sub-actions, deadlines, expected output, performance criteria(success indicators), main responsible organizations, and other cooperative
organizations.

The implementation procedure, such as who will reportwhat to whom by when, must also be clearly stated alongside the action
plan matrix.
Example 1: The action plan matrix of the Triangle of Hope Project (Zambia 1):
Recommendation
Activities
Status(action)(sub-action)
Promote Investment 1. Identify land Little
In cotton production
to be held in progressby allocating land to
MACO trust
appropriate
2. Write to MoL Not yet
producers
tor title deed started
3. Develop adm Donemechanismfor
farm blocks
Note: Excerpted and edited by the author.

Expected
StatusoutputLand for Not yet
cottonstartedproduction
identified
andsecuredReprinted from Table 4-2.

225

Activity
Respons Monitoring
periodibilityindicator
MonthlyJun. 2007 MACO
report(main),MoL (sub)CHAPTER 9

Example 2: The action plan matrix of the first Thai Automotive Master Plan(Thailand 1):
Action Plan
Output(sub-action)
1.2 Automotive
3. Automotive training
Standardized
Human
automotive
center project
Resource
training center
3.1 Provide
Development
Systematic training
to the industry
from workers tomanagement level
3.2 Skill training
Strategy (action)

3.3 Provide training
to engineers in thefield of advanced
engineering andspecialized
technology
Note: Excerpted and edited by the author.

Key success
Main
Cooperati
indicator
resp. org.
ve org.
1. Number of trained TAI
OIB/TAIA/T
persons
APMA/FTl
2. Number ofcompanies
sending
employees fortraining
3. Increased incomeof trained persons
4. Cost reduction andprofitability

The deadline for all actions in this table was 2006.

Alternatively, an action mechanism, such as a high-level monthly committee chairedby the President or the Prime Minister or a well-focused budgeting and projectapproval process coordinated and monitored by an effective hub organization, canbe adopted.

Compared with the action plan matrix approach, which stipulates all

actions in advance, these process-oriented approaches are more flexible in copingwith shifting circumstances.

However, their success requires strong and effective

guidance by the top leader or the designated hub organization.

In cases where

political and administrative support for policy execution is weak, the action plan
matrix approach may be preferable.4(vi) Optional materials—in addition, there are optional ingredients of industrial
master plans as listed below. These can be regarded as general backgroundmaterials from which the issues (iii), targets (ii), and vision (i) above are
distilled.
4

Mr. Vallop Tisasiri, the President of the Thailand Automotive Institute, which drafts the automotive
master plan, prefers the process-oriented approach in ensuring implementation. Although the first
automotive master plan of Thailand (2002–2006) had a large action plan matrix, the second
automotive master plan (2007–2011) has only a small action summary table and relies heavily on
ongoing project-based implementation of proposed actions. If a greater budget and more projects
are available, policy implementation is accelerated and vice versa. In the case of the Thai
automotive industry, strong leadership exercised by Mr. Vallop and his institute and deep trust andinformation sharing among industry, government, and donors, enables such an approach (interview
with Mr. Vallop, November 5, 2009).

226

An International Comparison of Industrial Master Plans-General review of the industry in question and of global and regional
trends-Review of recent economic performance and the results of the previous
master plan
-SWOT, growth diagnostics, benchmarking, investors’ country rankings,
and other general tools and indicators to assess the potential and problemsof the industry-Any theoretical, empirical, or field study results
These are supplementary issues to the main thrust of the master plan. They
may prove useful in the preparation stage such as brainstorming, problem
identification, and general education.

Whether they should be cited in

the main text depends on each case. If they provide clear evidence of why
certain policy issues, targets, and vision are singled out in the master plan,such information should definitely (but briefly) be incorporated in the maintext. On the other hand, if these materials are not directly linked to the mainarguments but were produced just as preliminary and general inputs, they
can be safely omitted from the master plan. The reason for this treatment,
as explained further below, is that the master plan should contain only key
ingredients without being diluted by information of secondary importance.
This makes the master plan lean, readable, and sharply focused.

9-3. Required features
There are several required features that must be borne in mind when drafting an
industrial master plan.
First, long-term and medium-term targets in (ii) above should be ambitious but
realistic.

Numerical targets should be higher than simple extrapolation of thepresent course but also reachable with serious exertion of cooperative efforts byboth public and private agents.

Targets that are unattainable even with great effort

are meaningless, while targets that can be reached without effort are redundant.
either case, the appropriateness of the original targets should be questioned.
227

InCHAPTER 9

Second, relevance should be the criterion for including any information in policy
documents.

All text, data and graphics should support the main arguments andproposals of the master plan.

Statistics that add little informational value, abstract

words with no implication, and general statements applicable to any industry in any
country (such as “improve X,” “promote Y,” “properly manage Z”) should be
removed from policy documents as much as possible.

A lengthy account of thehistory and circumstances of domestic industries, which are already well known topolicy makers and business people, is also unnecessary.
since lengthy documents are not read by many.
and impact.

Conciseness is preferred

Low-value content reduces clarity

Master plan drafters should be reminded that the addition of

non-essentials will not contribute to policy quality.

Sharply focused andwell-reasoned policy documents are effective even when they are short andSpartan.5
Third, a related point is that all chapter components—vision, targets, situation
analysis, policy issues, and action plan—must be closely and logically linked. The
action plan matrix must be able to achieve the proposed targets, which in turnshould contribute to the fulfillment of the vision.

Situation analysis and policy

issues must inform the selected visions and targets.

The master plan should be aconcise and consistent statement of a policy direction.

Information not related to

the rest of the master plan should be removed.
Fourth, flexibility and adaptability must be ensured across countries, sectors andtime.

Since all industries are different and all countries face different challenges,

cookie-cutter molds cannot be applied to the making of master plans.

Even for thesame industry in the same country, a rise in private dynamism, improved policy
capability, or shifting circumstances will call for policy revisions.

Creativity isneeded to fit policy documents to the changing reality of the industry in question.

5

However, if the industry is new to the country or if policy discussion among stakeholders is seriously
lacking, a master plan may include, for educational purposes, a general description of the industry
and other general materials to facilitate common understanding on basic issues. Even in that case,such materials should be presented concisely and should not become the main part of the master plan.
Separate background papers may be attached for expounding them.

228

An International Comparison of Industrial Master Plans

Fifth, implementability is crucial.

A policy document, however excellently written,

is just paper if it is not implemented.

All efforts should be made and all devices

must be mobilized to make sure that what is stated in the master plan is actually put
into practice.

Inclusion of the action plan matrix with a proper monitoringmechanism is one such device.
for

execution

must

be

Budgeting, personnel, and organizations necessary

prepared.

Clear

assignmentof

responsibility,inter-ministerial coordination, reporting within the government, and political will
and strong commitment at a high level, are additional requirements to ensure
implementation.
Sixth, effective stakeholder involvement must be ensured in the entire process ofdesigning, drafting and implementing the master plan.

The most important

stakeholders are business people. Industrial experts and academics should also be
intensively consulted.

This is essential if the policy is to be implementable,

realistic, and supported by the business community, which must execute the agreed
action plans.

Stakeholder involvement should be substantive, not nominal orsuperficial.

All parties should be given enough time and occasions to voice theiropinions until consensus is reached or at least until the points of dispute areclarified.

9-4. Relative scope of government versus market
One common and vital issue in designing any industrial policy is the determinationof where government ends and markets begin.

Very generally, it can be said thatthe state and the market must be combined optimally rather than the former
dominating the latter or the latter operating completely freely beyond the reach of
the former.

But determining how the two should be combined in the concrete

context of any particular industry is a very difficult matter.

Should the government

stipulate technology and equipment to be adopted or should that be left to private
investors? How hard or soft should be the targets for output, export, and investment
for individual firms and for the nation as a whole? Are they to be achieved by anymeans or are they just indicators with no responsibility for realization? How should
future demand scenarios be interpreted?
229

CHAPTER 9

Clearly, the borderline between government and markets must be drawn andre-drawn for each individual case in every industrial master plan.
much wisdom, knowledge and judgment.
tendencies.

This requires

The table below only suggests general

Greater scope of government is often appropriate when many of theconditions in the left column are met, and greater scope of markets is often
appropriate when many of the conditions in the right column are satisfied.
conditions on the left or right need to be met for either conclusion.

Not allMoreover, theimportance of each condition may be case-dependent.
.
Table 9-2. Relative Scope of Government versus Market

Initial capital investment (sunk cost)
Gestation periodMarket volatility
Product type
Private sector maturity and dynamism
Government policy capability
Trust between government and business

Setting targets and specifying products, producers, investment,
technology, location, markets, etc.
Greater scope forGreater scope forgovernment
markets
Large
Small
Long
Short
High
Low
Industrial inputs
Consumer goods
Low
High
High
Low
High
Low

With regard to industry characteristics, consumer goods industries such as fashion
garment and mobile phone assembly with short product cycles, unpredictabledemand, and relatively small initial investment can be largely left to the decisions ofprivate firms in response to market trends because micromanagement by the state
will surely prove counter-productive. By contrast, petro-chemicals or integrated
steelworks that require a huge investment, relatively predictable domestic demand,and volatile global markets must be properly guided by the state, even when private
firms are the producers, to avoid overcapacity, inadequate scale of production,
adoption of inappropriate technology (obsolete, too capital-intensive, etc.),
excessive debt burden, or environmental damage.
With regard to national capabilities, a country with a well-developed private sector,
low policy capability, and ineffective public private partnership should embracesomething close to laissez-faire since official intervention in such circumstances
will certainly make things worse.

But if the government has built up its policy

capability sufficiently while the private sector remains weak and its relationship230

An International Comparison of Industrial Master Plans

with the government is constructive, proactive industrial policy has a greater chanceof success.

9-5. International comparison
In this section, a number of industrial master plans from Asian countries arecompared.

The structures of these master plans are graphically summarized in

Figure 9-1.

More details, including the main contents of selected master plans, areshown in the table and figures in the appendix.

It is clear that master plans havedifferent structures depending on the sector, country, or purpose.

There is no

single prototype for all countries to emulate.
Figure 9-1. Master Plan Structure: A Comparison
0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Malaysia: Third Industrial
Master Plan
Thailand: First Automotive
Industry ES
Thailand: Second
Automotive Industry ES
Thailand: Second
Automotive Industry

VisionVisionThailand: Small and Medium
Enterprises

Targets
Targets

Thailand: Supporting
Industries ES

Situation analysis
Situation
analysis
Policy issues
issues
PolicyThailand: Food Industry ES

Action plans

Action plans

Thailand: Leather, leather
goods, footwear ES
Indonesia: National Industrial
Dev. Policy
India: National Strategy for
Manufacturing
India: Industrial Policy ofMaharashtra State

Note: The structure of main text in number of pages. ES means executive summary. Care should be taken tointerpret the structure of executive summary as it may not be the same as that of the full version. Meanwhile,
executive summaries are sometimes used more often than the full version.

All master plans contain a vision and/or targets except Malaysia’s Third Industrial
Master Plan, for which the national vision (Vision 2020) is too well known among
Malaysian officials and citizens to require restatement.
targets occupy from 5 to 15% of the entire document.
231

In most cases visions andCHAPTER 9

Some master plans, such as the Thai automotive (Thailand 1 and 2) and the Thaifood (Thailand 3), include “action plans” in the main text while others do not.
Where they do not, the reason may be due to (i) the compilation of action plans in a
separate volume; (ii) the use of a process-oriented action mechanism such as ahigh-level committee or a budget and project process as explained in section 9-2-(v)above; or (iii) the fundamental lack of an action plan matrix or an action mechanism.
For some master plans, such as the Thai leather (Thailand 4), the Indonesian
National Industrial Development Policy (Indonesia 1), and the Indian National
Strategy for Manufacturing (India 1), situation analysis and policy issue analysis are
the dominant parts of the master plan.
A few selected master plans are discussed below.
(i)Thailand: Automotive Master Plan 2007–2011 Executive Summary6—thismaster plan is worthy of careful study because it effectively directs thedevelopment of the Thai automobile industry, which has so far beensuccessful despite two major macroeconomic shocks (the Asian financial
crisis of 1997–98 and the global financial crisis of 2008–09) that severely
reduced automobile sales at home and abroad.

The policy formulationand implementation process is competently coordinated by the Thailand
Automotive Institute with close-knit networking among all stakeholders
through the automotive master plan committee, focus groups, and CEO
Forum.

The essence of the master plan has a lean and simple structure:7

Vision 2011 Î 4 objectives (success indicators) Î5 strategies Î 12
action plans
67

The executive summary is essentially the same as chapter 8 (entitled “Automotive Industry Master
Plan 2007–2011”) of the full-version Thai document. The rest of the original document contains
frameworks, situation analysis, policy making organization, and so on. In Thailand, the full text of
the industrial master plan is prepared in Thai while the executive summary is produced in both Thaiand English, either in one volume or in separate volumes, and uploaded to the web. Stakeholders
often use executive summaries for reference and discussion. Thai officials seem to prefer a concise
checklist of needed actions and a diagram to explain relationships among these actions rather than athick document containing many supplementary materials.
Vision 2011 is “Thailand is the automotive production base in Asia which creates more value added
to the country with strong automotive parts industry.” Also see Section 7-2-(i) above. Note that
“action plans” here are not the same as the detailed action plan matrix discussed in Section 9-2-(v).

232An International Comparison of Industrial Master Plans

The executive summary, which basically has the same content as chapter 8of the full-version document, presents this policy structure in the first four
pages while the remaining pages are devoted to explanation of the 12 Action
Plans, one by one.

There is no situation analysis or discussion of policy

issues in this executive summary.

The five strategies and twelve actionplans are compactly summarized in the figure below.
The Thailand Automotive Institute uses the process-oriented action
mechanism to execute these strategies and action plans.

Various projects

supported by the state budget or international cooperation are approved
and mobilized to attain them.8 Since available funds fluctuate from year
to year, the exact size and scope of support measures cannot be decided inadvance.
Figure 9-2. Thai Automotive Master Plan: 5 Strategies and 12 Action Plans

Source: Thailand Automotive Institute, The Automotive Industry Master Plan 2007–2011 Executive Summary, p.4.

(ii) Malaysia: Second Industrial Master Plan (IMP2) 1996–2005— this masterplan encompassing all manufacturing sectors in Malaysia was unique in

8Japan assists Thailand with the Automotive Human Resource Development Program with theparticipation of Denso, Honda, Nissan and Toyota; dispatch of experts to universities by the Japan
Overseas Development Cooperation (JODC); and cooperation with the Technology Promotion
Association and the Thai-Nichi Institute of Technology.

233

CHAPTER 9

having a clear overarching logic and objectives that evolved around theconcepts of cluster-based industrial development and manufacturing plus
plus (lifting and broadening activities along the value chain). These ideas
were proposed by a researcher at the Malaysian Institute of Economic
Research and adopted throughout the master plan.

The chapter structureof IMP2 was as follows.
Past review and macroeconomic framework Î analytical framework(two concepts above) Î 8 sectoral chapters9 Î strategic directions(policy issues) Î institutional framework (relatively weak)
In the eight sectoral chapters constituting the main body of this master plan,
the same structure was repeated for each subsector as follows.
Current status Î issues and challenges (SWOT) Î policies andstrategic direction (short term; and medium to long term)
While this master plan had lucid organization, application of the same format
and the same perspective on all major industries of Malaysia was somewhat
too mechanical. In addition, this master plan lacked an effective procedure
to ensure implementation either in the form of an action plan matrix or aprocess-oriented mechanism.
(iii) Ethiopia: Leather and Leather Products (March 2005)—This master plan
has two volumes.

The first volume, “Master Plan,” contains situation

analysis (including SWOT and benchmarking), vision (“Top Down Approach,”which means final demand- oriented policy formulation), and roadmaps oftargets and required actions. The second volume, “Business Plan,” contains
more detailed targets and required actions separately for footwear, leather
garments, and leather goods.

While this master plan contains richinformation about the industry, content structure and ordering are unique

9Electrical and electronics; textiles and apparel; chemicals; resource-based industries; agro-based andfood products industries; transportation industry (automotive, etc); materials industries; andmachinery and equipment.

234

An International Comparison of Industrial Master Plans

and overlap in some places; for example, “targets” and “actions” appear inboth volumes.
This master plan contains a large number of numerical targets for output,
material procurement, investment, markets, capacity building, and so on,
for each year and even for each month. From the viewpoint of the existing
capacity and time constraints of the Ministry of Trade and Industry (MOTI),
and also from the viewpoint of proper division between government andmarkets in industrial policy formulation (section 9-4 above), these numericaltargets may be too many and too difficult to follow in reality.
(iv) Ethiopia: Basic Metal and Engineering (2007–2008)—the content of thisstrategy is as follows.
General information about the industry Î situation analysis Î “gapanalyses” (capacity vs. demand forecasts) Î vision/mission/strategic
objectives and goals Î action plan matrix
This structure is simple and reasonably standard.

Placement of general

information at the outset is understandable since steel and metal engineering
is a new industry for Ethiopia to promote, and basic information must be
provided and shared among stakeholders.

Inclusion of demand forecasts

is fairly common in materials industries such as steel although it is not so
common in specific metal processing industries.

The main problem withthis strategy is not the overall chapter design but the concrete contents of
its strategies, goals, and action plans.

More information and analyses areneeded to improve policy content and ensure implementability. For example,
information on material flows, alternative demand scenarios for long andflat steel consumption, feasibility of domestic iron ore and other inputs,
diagnosis of individual establishments, and so on, must be prepared. Basedon that information, appropriate vision, proper government domain, desired
domestic production ratios, cost estimates and risk analysis, and the possible
use of FDI and foreign financing, must be studied and debated.

235

CHAPTER 9

9-6. Recommendations for Ethiopia
From the analyses above, the following recommendations are offered to the drafting
teams of Ethiopian industrial master plans.
First,

sectoralmasterplans

forpriority

industries—theseincludeboth

export-oriented industries and import substitution industries—should be drafted one
by one over the next several years.

Existing sectoral master plans should also be

revised every several years to reflect new situations and enhanced policy capability.
Quality, not speed of drafting, should be the most important consideration.

When

this process is completed will depend on the ability, funding, and time constraints ofthe drafting teams of MOTI as well as the availability of international cooperation.
Completion of all proposed industrial master plans during the Plan for Accelerated
and Sustained Development to End Poverty (PASDEP) II period is desirable but not
absolutely necessary.
Second, the total number of industrial master plans should not exceed 10 when theabove drafting cycle is completed.
be increased endlessly.

The number of sectoral master plans should not

Attention should be paid to executing proposed policies

effectively instead of creating a large number of documents.
Third, the documents should not be too long.
50–100 pages.

We recommend something likeThick documents are difficult to read or use.

Compactness isachievable by careful planning and removing all analyses and discussions that do
not directly support proposed policy actions.

An executive summary is usefulwhen the document is large, but if the main text is concise enough, there is no needfor an executive summary.
Fourth, as argued above, there are different ways to ensure implementation: (i) an
action plan matrix that formally specifies required actions in detail and a monitoringmechanism in advance; (ii) a high-level monthly committee chaired by a leader who
oversees progress and solves problems (such as the Export Steering Committee of
Ethiopia); and (iii) a hub organization that effectively mobilizes projects through thestate budget, donor assistance, and private cooperation to implement designated236

An International Comparison of Industrial Master Plans

action plans.

While (ii) and (iii) are more flexible than (i), there are also

constraints.

The second approach can be used for a few important national targets(such as export performance) but not for implementing a large number of masterplans.

The third approach requires a competent hub organization, such as theThailand Automotive Institute, which can navigate itself through different ministries,
donors, and private stakeholders.

For Ethiopian industrial sectors, the mostappropriate initial step may be to adopt an explicit action plan matrix of reasonablesize (not too large).
Fifth, a model structure for each industrial master plan (sector-specific or
issue-specific) is suggested below.

The order and relative weight of eachcomponent can be adjusted as necessary.

Different industrial sectors can havedifferent structures to reflect the uniqueness of each sector.
Introductory materials (brief)
Overview – vision, goals, positioning, significance, 5–10%
Situation analysis (review of past and current domestic situation, 20–30%
Analysis of policy issues, 20–30%
Implementation procedure (brief)
Action plan matrix, 40–45%
If the action plan matrix approach is not adopted, the last component should bedeleted.

Background papers containing supplementary information, such as fieldsurveys, benchmarking, SWOT, international experiences, technical appendices, andso on, may be prepared separately from the main text.

237