Industrial Master Plans:International Comparison of Contents and Structure∗
Kenichi Ohno (GRIPS)

November 16, 2009This paper reviews the structural format of industrial master plans of developing countries, mainly from
Asia, and offers some ideas for improving them. There are a large number of studies that analyze particulardevelopment policies or particular policy documents in any country. However, studies that pay primaryattention to the methodology of industrial policy formulation are few and an international comparison ofpolicy methodology is even rarer. Nevertheless, such information is extremely useful for latecomer
countries that wish to conduct proactive industrial policies for an economic take-off. If a policy document
is produced without serious consideration of overall design, it may turn out that its content, style, lengthand structure are at the whims of ministries or donors—and even individual drafters—that happen to be
assigned for the task. As a result, the policy document may suffer from the lack of focus, relevance or
implementability. To avoid these problems, careful thinking is needed before drafting an industrial masterplan or strategy. The author hopes that this research will prove useful to interested policy makers.

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

(i) Overall industrial master plans—these cover multiple industrial activities. Some of them feature
sectoral chapters (electronics, machinery, food processing, etc.) while others are organized into
issue-oriented chapters (TVET, technology, SMEs, etc.) Not all countries produce this type ofmaster plans, and the coverage of industries differs from one plan to another.

(ii) Sector-specific master plans—these are master plans for the development of 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∗

This document was prepared 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. I would like to thank Ms. Ayako Ishiwata (senior consultant, Because Institute Co., Ltd.) and Ms.
Sayako Uesu (research associate, GRIPS Development Forum) for data collection and analysis. The author bears full
responsibility for the content of this document including any remaining errors and omissions. This research was conducted inhaste and without time or resource to cover a sufficient number of policy documents in East Asia. It is hoped that thisresearch will be strengthened with more relevant information in the near future.
1
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 a time span of a few to several years as masterplans.

1

industrial development such as transport and logistics, information technilogy, small and medium
enterprises, education and training, and so on.

(iv) Regional development master plans—these are strategies for the industrial development ofparticular regions, corridors, economic zones, and other geographically delineated areas.

There may be other variations and combinations of these basic types. Type (i) can be regarded as theamalgamation of the other types. In this paper we mainly discuss the first three types.

Apart from these policy master plans, there are also technical master plans that stipulate physicaldimensions 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 thescope of this paper.

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

Table 1. Ingredients of an Industrial Master Plan

Each of these components may occupy either one chapter or a number of chapters. The order of thesecomponents is somewhat flexible. For example, targets may be inserted after situation analysis and policy
issues. However, the vision should most properly be stated at the outset and the action plan matrix (or the2

action mechanism) should come at the end. The terminology is also flexible and substitutable by otherphrases of similar connotations. In addition to basic components, there may be other materials such aspreface, introduction, table of contents, list of tables and figures, drafting procedure and organization,
executive summary, appendices, and so on. These materials are not considered in this paper.

(i) Vision—the master plan must clarify the purpose of industrial promotion. This includes why thisindustry is important in national development, what role it should play in stimulating other sectors,
what positioning it should take in the global, regional, and national markets, and so on. If these
purposes are already presented in other documents and widely understood among stakeholders(such as ADLI and IDS in the case of Ethiopia), they can only be mentioned briefly without
spilling much ink. On the other hand, if these are not yet sufficiently expressed, the master planshould clearly and concisely state the importance of the industry. This section should be no morethan a few pages. One way to state the vision 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 sound and sustainable solutions are found and effectively implemented to cope withtraffic 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 isbuilt and indigenous industrial capability is promoted.” (Vietnam 2, p.20).
The Thai Automotive Mater Plan for 2002-2006 as well as for 2007-2011 continue to carry thesame 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) Targets2—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 amount of these targets, including how many numerical targets should be set with howmuch detail, depend critically on the characteristics of the sector in question as well as thecapability 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. Generally speaking, there should beless (numerical) 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 (see Section 4 for morediscussion).
2

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

3

[Example: The Thai Automotive Master Plan 2002-2006 had the following numerical targets forthe 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 the intervening years of 2002-2005 were not set.](iii) Situation analysis—information must be given to analyze the current status, potentials, andobstacles of the domestic industry in question. Data should be presented in tables and graphics, theresults of surveys and benchmarking should be reported (if available), and theories and empiricalanalysis should be cited (if relevant). Information should not be included randomly but insertedwith a clear purpose of making certain points. The following aspects are among those routinely
reviewed: 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 and competitiveness, 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. The appropriate selection of these analyses depends
on the degree of understanding and consensus among stakeholders. If businesses, policy makers
and experts generally agree on the current position of the domestic industry, situation analysis canbe brief with minimal pages or even skipped. If, on the other hand, policy formulation is in an
early stage and stakeholders do not yet share basic information, situation analysis becomes anintegral part of the master plan.

[Example: In Indonesia’s National Industrial Development Policy, situation analysis is containedin 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 occupies 71 pages (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 action plans (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 fromwhich the policy maker should carefully choose is listed. They are: skills and technology, cost4

reduction, quality improvement, product design and development, input procurement (including
localization and supplier policy), marketing, export promotion, infrastructure (especially transportand power), financing (including the use of ODA and external borrowing), limitation of domestic
market size, labor supply and workers, coping with cheap imports and dumping, speed and scopeof globalization and international commitments, FDI policy, tariff policy, design of incentive
measures, certification and award systems, legal reforms, international standards (ISO, quality,
environment, accounting, etc), SME support, business matching, industrial associations, public
private partnership, use of ITC, testing centers, and so on. The most relevant topics for the industry
in question should be identified and discussed among stakeholders. It is important to work onprioritized issues only rather than cover all issues 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), occupying 61 pages (78%) of the 78 page document andcovering 12 topics including macroeconomic stability, education and skill building, investing ininnovation and technology, and so on. This may be a little too much in light of selectivity andconcentrated effort, but it may be helpful for forming consensus on key issues.](v) Action plan or action mechanism—an action plan matrix or an action mechanism is essential toensure 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 (asin 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 the government at regular intervals. Two sample formats ofaction plan matrices are presented below, which 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 report what 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):
Expected
Activity Respons Monitoring
Recommendation
Activities
StatusStatus(action)(sub-action)
outputperiodibilityindicator
Promote investment 1. Identify land to Little
Land forNot yet Jun.
MACO
Monthlyin cotton production be held in MACO progress cotton
started 2007
(main),
reportby allocating land to trust
production
MoL
appropriate
2. Write to MoL Not yet identified(sub)for title deedstarted andproducers
3. Develop adm Donesecuredmechanism forfarm blocks

Note: excerpted and edited by the author.

5

[Example 2: The action plan matrix of the first Thai Automotive Master Plan (Thailand 1):
Action Plan
Strategy(sub-action)(action)
1.2 Automotive 3. Automotive training
Humancenter project
Resource
3.1 Provide
Development
Systematic training
to the industry fromworkers tomanagement level
3.2 Skill training

3.3 Provide training
to engineers in thefield of advanced
engineering andspecialized
technology

Key success
Main
Cooperati
indicator
resp. org. ve org.
Standardized 1. Number of
OIB/TAIA/
TAI
automotive
TAPMA/F
trained persons
training center 2. Number of
TI
companies
sending
employees fortraining
3. Increased
income oftrained persons
4. Costreduction andprofitability
OutputNote: excerpted and edited by the author. The deadline for all actions in this table is the year 2006.]

Alternatively, an action mechanism such as a high-level monthly committee chaired by the
President or the Prime Minister, or a well-focused budgeting and project approval processcoordinated and monitored by an effective hub organization, can be adopted. Compared with theaction plan matrix approach which stipulates all actions in advance, these process-oriented
approaches are more flexible in coping with shifting circumstances. However, their successrequires 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 preferable3.

(vi) Optional materials—in addition, there are optional ingredients of industrial master plans as listed
below. These can be regarded as general background materials from which issues (iii), targets (ii),and visions (i) above are distilled:- General review of the industry in question, and global and regional trends- Review of recent economic performance and the results of the previous master plan
- SWOT, growth diagnostics (the so-called “HRV tree”), benchmarking, investors’ country ranking,and other general tools and indicators to assess the potentiality and problems of the industry

3

Mr. Vallop Tisasiri, the President of the Thailand Automotive Institute which drafts the automotive master plan, prefers theprocess-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 andinstead relies on ongoing project-based implementation of proposed actions. If a greater budget and more projects areavailable, policy implementation is accelerated, and vice versa. In the case of the Thai automotive industry, strong leadershipexercised by Mr. Vallop and his institute, and deep trust and information sharing among industry, government and donors,
enables such an approach (interview with Mr. Vallop, November 5, 2009).

6

- Any theoretical, empirical, or field study results

These are supplementary information to the main thrust of the master plan. They may prove usefulin 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 evidenceof why certain policy issues, targets and vision are singled out in the master plan, such information
should definitely (but briefly) be incorporated in the main text. On the other hand, if thesematerials are not directly linked to the main arguments but were produced just as preliminary andgeneral 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, andsharply-focused.

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 the present course but also reachable with serious exertion ofcooperative efforts by both public and private agents. Targets that are unattainable even with great effort aremeaningless while targets that can be reached without effort are redundant. In either case, theappropriateness of original targets should be questioned.

Second, relevance should be the criterion for including any information in policy documents. All text, dataand graphics should support the main arguments and proposals 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 the history and circumstances of domestic industries,
which are already well known to policy makers and business people, is also unnecessary. Conciseness ispreferred since lengthy documents are not read by many. By adding low-value contents, clarity and impact
are lost. Master plan drafters should be reminded that mindless addition of non-essentials will not
contribute to policy quality. Sharply-focused and well-reasoned policy documents are effective even when
they are short and Spartan4.

Third, a related point is that all chapter components—vision, targets, situation analysis, policy issues, and4

However, if the industry is new to the country or policy discussion among stakeholders is seriously lacking, a master plan
may include, for educational purposes, the general description of the industry and other general materials to facilitatecommon 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.

7action plan—must be closely and logically linked. The action plan matrix must be able to achieve theproposed targets, which in turn should contribute to the fulfillment of the vision. Situation analysis andpolicy issues must inform why these visions and targets have been selected. The master plan should be aconcise and consistent statement of a policy direction. Information not linked with the rest of the masterplan should be removed.

Fourth, flexibility and adaptability must be ensured across countries, sectors and time. Since all industries
are different and all countries face different challenges, cookie-cutter molds cannot be applied to themaking of master plans. Even for the same industry in the same country, a rise in private dynamism,
improved policy capability or shifting circumstances will call for policy revisions. Creativity is needed tofit policy documents to the changing reality of the industry in question.

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 statedin the master plan is actually put into practice. Inclusion of the action plan matrix with a proper monitoringmechanism is one such device. Budgeting, personnel, and organizations necessary for execution must be
prepared. Clear assignment of responsibility, inter-ministerial coordination, reporting within thegovernment, and political will and strong commitment at the high level, are additional requirements toensure implementation.

Sixth, effective stakeholder involvement must be ensured in the entire process of designing, drafting andimplementing the master plan. The most important stakeholders are business people. Industrial experts andacademics 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 agreed action plans. Stakeholder
involvement should be substantive, not nominal or superficial. All parties should be given enough time andoccasions to voice their opinions until consensus is reached or at least the point of dispute is clarified.

4. Relative scope of government versus market
One common and vital issue in designing any industrial policy is the determination of where government
ends and markets begin. Very generally, it can be said that the state and the market must be combined
optimally rather than the former dominating the latter or the latter operating completely freely beyond thereach of the former. But 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 orshould that be left to private investors? How hard or soft should be the targets for output, export andinvestment for individual firms and for the nation as a whole? Are they to be achieved by any means or justindicators with no responsibility for realization? How should we interpret future demand scenarios?

8Clearly, the borderline between government and markets must be drawn and re-drawn for each individual
case in every industrial master plan, for which much wisdom, knowledge and judgment are required. The
table below only suggests general tendencies. Greater scope of government is often appropriate when manyof the conditions on the left column are met, and greater scope of markets is often appropriate when manyof the conditions on the right column are satisfied. Not all conditions on the left or right need to be met foreither conclusion. Moreover, the importance of each condition may be case-dependent.
.
Table 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 regards to industry characteristics, consumer goods industries such as fashion garment and mobile
phone assembly with short product cycles, unpredictable demand and relatively small initial investment canbe largely left to the decisions of private firms in response to market trends because micromanagement by
the state’s iron hand will surely prove counter-productive. By contrast, petro-chemicals or integrated
steelworks with huge required 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 regards to national capabilities, a country with a well-developed private sector, low policy capability
and ineffective public private partnership should embrace something 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 relationship with thegovernment is constructive, proactive industrial policy has a greater chance of success.

5. International comparison
In this section a number of industrial master plans from Asian countries are compared. The structures ofthese master plans are graphically summarized in Figure 1. More details, including the main contents of9

selected master plans, are shown in Appendix Table and Figures. It is clear that master plans have different
structures depending on the sector, country or purpose. There is no single proto-type for all countries toemulate.

Figure 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

VisionThailand: Small and Medium
Enterprises

Targets

Thailand: Supporting
Industries ES

Situation analysis
Policy issues

Thailand: Food Industry ES
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.

The vision and/or targets are contained in all master plans except Malaysia’s Third Industrial Master Plan
for which the national vision (Vision 2020) is too well known among Malaysian officials and citizens torequire restatement. In most cases visions and targets occupy from 5 to 15% of the entire document.

Some master plans, such as the Thai automotive (Thailand 1 and 2) and the Thai food (Thailand 3), include“action plans” in the main text while others do not. In the latter case, the reason may be due to (i) thecompilation of action plans in a separate volume; (ii) the use of process-oriented action mechanism such asa high-level committee or a budget and project process as explained in Section 2-(v) above; or (iii) the
fundamental lack of an action plan matrix or an action mechanism. For some master plans, such as the Thaileather (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
10

part of the master plan.

A few selected master plans are discussed below.
(i) Thailand: Automotive Master Plan 2007-2011 Executive Summary5—this master plan is worthy ofcareful study because it effectively directs the development of the Thai automobile industry which
has so far been successful despite two major macroeconomic shocks (the Asian financial crisis of
1997-98 and the global financial crisis of 2008-09) which severely reduced automobile sales athome and abroad. The policy formulation and implementation process is competently coordinatedby the Thailand Automotive Institute with close-knit networking among all stakeholders throughthe automotive master plan committee, focus groups, and CEO Forum. The essence of the masterplan has a lean and simple structure as follows6:
Vision 2011  4 objectives (success indicators)  5 strategies  12 action plans
The executive summary, which basically has the same content as chapter 8 of the full-version
document, presents this policy structure in the first four pages while the remaining pages are
devoted to the 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 action plans
are compactly summarized in the figure below.

As noted in Footnote 3, the Thailand Automotive Institute uses the process-oriented action
mechanism to execute these strategies and action plans. Various projects supported by the statebudget or international cooperation are approved and mobilized to attain them7. Since available
funds fluctuate from year to year, the exact size and scope of support measures cannot be decided
in advance.

5
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 an industrial master plan is prepared in Thai while the executive
summariy is produced in both Thai and English, either in one volume or in separate volumes, and uploaded in the web.
Stakeholders often use executive summaries for reference and discussion. Thai officials seem to prefer a concise checklist ofneeded actions and a diagram to explain relationship among these actions rather than a thick document containing many
supplementary materials.
6
Vision 2011 is “Thailand is the automotive production base in Asia which creates more value added to the country withstrong automotive parts industry.” Also see Section 2-(i) above. Note that “action plans” here are not the same as the detailed
action plan matrix discussed in Section 2-(v).
7Japan assists Thailand with the Automotive Human Resource Development Program by Denso, Honda, Nissan and Toyota;
dispatch of experts to universities by JODC; and cooperation with the Technology Promotion Association and the Thai-Nichi
Institute of Technology.

11

Figure 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 master plan encompassing all
manufacturing sectors in Malaysia was unique in having a clear over-arching logic and objectives
which evolved around the concepts of cluster-based industrial development and manufacturing
plus plus (lifting and broadening activities along the value chain). These ideas were proposed by aresearcher at the Malaysian Institute of Economic Research and adopted throughout the masterplan. The chapter structure of IMP2 was as follows:
Past review and macroeconomic framework  analytical framework (two concepts above) 8 sectoral chapters8  strategic directions (policy issues)  institutional framework(relatively weak)

In the eight sectoral chapters constituting the main body of this master plan, the same structure wasrepeated for each subsector as follows:
Current status  issues and challenges (SWOT)  policies and strategic 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, thismaster plan lacked an effective procedure to ensure implementation either in the form of an action
plan matrix or a process-oriented mechanism.
8

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

12

(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), androadmaps of targets and required actions. The second volume, “Business Plan,” contains moredetailed targets and required actions separately for footwear, leather garments, and leather goods.
While this master plan contains rich information about the industry, content structure and ordering
is somewhat unique and overlapping, for example, by having “targets” and “actions” in bothvolumes.

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. Fromthe viewpoint of the existing capacity and time constraint of MOTI, and also from the viewpoint ofproper division between government and markets in industrial policy formulation (Section 4
above), these numerical targets may be too many and too difficult to follow in reality.

(iv) Ethiopia: Basic Metal and Engineering (2007?)—the content of this master plan is as follows.
General information about the industry  situation analysis  “gap analyses” (capacity vs.
demand forecasts)  vision/mission/strategic objectives and goals  action plan matrix
This structure is simple and reasonably standard. Placement of general information at the outset isunderstandable since steel and metal engineering is a new industry for Ethiopia to promote, andbasic 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 specificmetal processing industries. The main issue with this master plan is not the overall chapter design
but concrete contents of its strategies, goals and action plans. More information and analyses areneeded to improve policy content and ensure implementability. For example, information onmaterial flows, alternative demand scenarios for long and flat steel consumption, feasibility ofdomestic iron ore and other inputs, diagnosis of individual establishments, and so on, must be
prepared. Based on that information, appropriate visions, proper government domain, desired
domestic production ratios, cost estimates and risk analysis, and the possible use of FDI andforeign financing, must be studied and debated.

13

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

First, sectoral master plans for priority industries—these include both export-oriented industries and importsubstitution industries—should be drafted one by one over the next several years. Existing sectoral masterplans 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 constraint of the drafting teams of MOTI as well as theavailability of international cooperation. Completion of all proposed industrial master plans during the
PASDEP II period is desirable but not absolutely necessary.

Second, the total number of industrial master plans should not exceed 10 when the above drafting cycle iscompleted. The number of sectoral master plans should not be increased endlessly. More attention shouldbe paid to executing proposed policies effectively instead of creating a large number of documents.

Third, the document size should not be too large. We recommend something like 50-100 pages. Thickdocuments are difficult to read or use. Compactness is achievable by careful planning and removing all
analyses and discussions which do not directly support proposed policy actions. An executive summary isuseful when the document is large, but if the main text is concise enough there is no need for an executive
summary.

Fourth, as argued above, there are different ways to ensure implementation: (i) an action plan matrix which
formally specifies required actions and a monitoring mechanism in detail and in advance; (ii) a high-levelmonthly committee chaired by the top leader which oversees progress and solves problems (such as the
Export Steering Committee of Ethiopia); and (iii) a hub organization that effectively mobilizes “projects”
through the state budget, donor assistance, and private cooperation to implement designated action plans.
While (ii) and (iii) are more flexible than (i), there are also constraints. The second approach can be used
for a few very important national targets (such as export performance) but not for implementing a large
number of master plans. The third approach requires a competent hub organization, such as the Thailand
Automotive Institute, which can navigate itself through different ministries, donors and private
stakeholders. For Ethiopian industrial sectors, the most appropriate initial step may be to adopt an explicit
action plan matrix of reasonable size (not too large).

Fifth, the model structure of each industrial master plan (sector-specific or issue-specific) is suggested as
below. The order and relative weight of each component can be adjusted as necessary. Different industrial
sectors can have different structures to reflect the uniqueness of each sector.
14

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 be deleted. Background papers
containing supplementary information, such as field surveys, benchmarking, SWOT, international
experiences, technical appendices, and so on, may be prepared separately from the main text.

Referenced industrial master plans
Ethiopia 1 – UNIDO and MOTI, A Strategic Action Plan for the Development of the Ethiopian Leather andLeather Products Industry, vol.I (Master Plan), vol.II (Business Plan), March 2005.
Ethiopia 2 – MOTI, The Basic Metal and Engineering Industry Master Plan, 2007?
India 1 – National Manufacturing Competitiveness Council, National Strategy for Manufacturing
2006-2015, New Delhi.
India 2 – Maharashtra State Government, Industrial Policy of Maharashtra, 2001.
Indonesia 1 – Ministry of Industry, National Industrial Development Policy, 2005-2025, Jakarta.
Malaysia 1 – Ministry of International Trade and Industry, Second Industrial Master Plan 1996-2005,
Kuala Lumpur.
Malaysia 2 – Ministry of International Trade and Industry, Third Industrial Master Plan 2006-2020, Kuala
Lumpur.
Thailand 1 – Thailand Automotive Institute, Executive Summary: Master Plan for Thai Automotive
Industry 2002-2006, Bangkok.
Thailand 2 – Thailand Automotive Institute, The Automotive Industry Master Plan 2007-2011, Full Text (inThai) and Executive Summary, Bangkok.
Thailand 3 – Master Plan for Food Industry.

15

Thailand 4 – Master Plan for Leather, Leather Goods and Footwear Industry.
Thailand 5 – Department of Industrial Promotion, Ministry of Industry, An Overview: Supporting Industriesin Thailand, October 1995.
Thailand 6 – Office of Small and Medium Enterprises Promotion, The 2nd Master Plan of Thailand’s Smalland Medium Enterprises Promotion 2007-2011, Summary,Vietnam 1 - Ministry of Industry and Trade, Institute for Industry Policy and Strategy (2007), Master Planof Vietnam Motorcycle Industry for the Period of 2006-2015, Vision towards 2020, Hanoi, July.
Vietnam 2 - Motorbike Joint Working Group (2007), For Sound Development of the Motorbike Industry in
Vietnam, Vietnam Development Forum/Publishing House of Social Labour, Hanoi.
Zambia 1 – Report of the Steering Committee of the Strategic Action Initiative for Economic Development(Triangle of Hope Project), July 2007.
Other references
Ohno, Izumi, and Kenichi Ohno (2008), “Dynamic Capacity Development: What Africa Can Learn from
Industrial Policy Formulation in East Asia,” a paper submitted to the African Task Force, the Initiative for
Policy Dialogue, Columbia University, October.
Ohno, Kenichi ed. (2006), Industrial Policy Formulation in Thailand, Malaysia and Japan, Vietnam
Development Forum/Publishing House of Social Labor, Hanoi.
Ohno, Kenichi (2009a), The Middle Income Trap: Implications for Industrialization Strategies in East Asia
and Africa, GRIPS Development Forum, Tokyo.
Ohno Kenichi (2009b), “Ethiopia: Political Regime and Development Policies,” a draft prepared for thepolicy dialogue between Ethiopia and Japan in June 2009, GRIPS, Tokyo.
Ohno, Kenichi, and Nguyen Van Thuong, eds (2005), Improving Industrial Policy Formulation, Vietnam
Development Forum/Publishing House of Political Theory, Hanoi.

16Appendix Table 1. Master Plan Structure: A Summary
Contents
Master Plan

Type

Years

Pages

Language
VisionTargets

Situation
analysis

PolicyissuesActionplans

Malaysia: Third Industrial
Master Plan

Overall

2006-2020

674

English

0.4%

4.7%

66.2%

28.6%

0%

Thailand: Automotive
Industry (exec. summary)

Sectorspecific

2002-2006

19

English

6.7%

2.7%

0%

10.7%

80.0%

Thailand: Automotive
Industry (exec. summary)

Sectorspecific

2007-201120

English

5.0%

10.0%

5.0%

0.0%

80.0%

Thailand: Automotive
Industry

Sectorspecific

2007-2011

227

Thai

0.5%

2.5%

78.9%

0.0%

18.1%

Thailand: Small andMedium Enterprises
Promotion (exec. summary)Issue
specific

2007-201138

English

10.0%

33.4%

43.6%

0.0%

7.7%

Thailand: Supporting
Industries (exec. summary)Issue
specific

1995

38

Thai andEnglish

6.7%

2.7%

0%

10.7%

80.0%

Thailand: Food Industry(exec. summary)

Sectorspecific?

9

English

27.8%

0%

11.1%

22.2%

38.9%

Thailand: leather, leather
goods and footwear industry(exec. summary)

Sectorspecific

10 years

6

English

3.8%

3.8%

53.8%

34.6%

3.8%

Indonesia: National
Industrial Development
PolicyOverall

2005-2025

238

English

2.1%

12.2%

29.8%

55.9%

0%

India: The National Strategy
for Manufacturing

Overall

2006-201578

English

2.6%

2.6%

16.7%

78.2%

0%

India: Industrial Policy ofMaharashtra State

Overall

2001-200610

English

10.0%

0%

25.0%

65.0%

0%

Note: Page numbers and content proportions are for the main text only; appendices are not counted. Action plans include both full action plan
matrices and short listings of required actions.

17Appendix Figure 1
Malaysia: Third Industrial Master Plan (IMP3) 2006-2020

Overall situational analysis(Chap.1)
Macro framework(Chap.2)
Vision: Malaysia-Towards Global CompetitivenessTargets: 5.6% CAGR for the manufacturing sector
and 7.5% CAGR for the non-government service sector(plus TFP contribution, investment, and trade targets)
Issue-specific plans(Chap. 3-6)•
external trade•
investments•
SMEs•
branding

Growth area analysisof the manufacturingsector(Chap. 7)

Growth area analysisof thenon-government
service sector(Chap. 20)

Sector-specific plans
for the manufacturing sector
with investment and export targets(Chap. 8-19)•
electrical and electronics•
medical devices•
textiles and apparel•transport equipment•
petrochemicals•
pharmaceutical•wood-based•
rubber products•
oil palm•
food processing

•
•
•
•
•

Issue specific plans(Chap. 21-25)
halal industries
domestic companies' capabilities
human resource
ICT
logistics

18

Appendix Figure 2

Thailand: Master Plan for Thai Automotive Industry 2002-2006, Executive Summary

Background(Section 1)
Vision(Section 2-3)

to become the automotive production base in Asiawith strong domestic supplier baseTargets(Section 4)• annually to produce over 1 million cars and over 2 million motorcycles• to export parts over 200 billion Bhat in 2006
• to produce 70% local value addition
Policies(Section 5)• to create predictable environment(business intelligent unit, HRD, market expansion, good governance,
infrastructure)• to enhance competitiveness of auto parts industry(trade promotion and networking, standardization, manufacturing
technology and management, product technology, HRD)
Action Plans(Section 6)
15 action plansi. situation analysis, ii. information center, iii. training center,iv. engineer development, v. certification system, vi. market
responsiveness, vii. tax structure research, viii. infrastructure
planning, ix. cluster-based development, x. standards, xi. standard
testing center, xii. R&D center, xiii. export promotion center,xiv. supplier development program, xv. product development

19Appendix Figure 3

Thailand: Master Plan for Thai Food Industry, Executive Summary

Purpose of M/P(Page 1)
to evaluate the economic status and to identify thefactors which have an impact on the food industry
Situations Analysis:
Problems and Obstacles(Page 2)

Visions and Strategies(Page 3)• to be a leader in the export of high value added food products(fisheries, cereal, fruits and vegetables, and meat products)• to produce value added products from sugar and tapioca for exports• to take actions for the development and transformation of the entire"value food chain"
Policy Issues(Page 4)• 4 bodies of the central agency, responsible for the food industry
promotion, have to operate simultaneously and to link andcoordinate systematically.
• to raise competitiveness and standards (through human resource

development, development of technology management systems,
and adapting appropriate technology)
List of Actions(Page 4-9)
1) to build capacity for competitiveness- policy setting and planning (2 plans)- industrial cost management (3 plans)- development in science and technology (8 plans)- marketing (7 plans)- food safety (7 plans)
2) to create network and linkages within and between industrial groups- food industry information (3 plans)- cooperation, networking between industrial groups and international
networking (3 plans)20Appendix Figure 4

Thailand: Master Plan for Leather, Leather Goods and Footwear Industry, Executive Summary

Situational Analysis(Section 1-2)
Policy Issues(Section 3)<Key development factors>• Factors of production;• Demand conditions;• Related and supporting industries;• Firm strategy, structure, and rivalry• Role of government
Vision(Section 4)"Thailand: Asian Footwear and Leather Goods Center"or"Thailand's Leather Goods: Italy of the East"
Targets(Section 4)
annually to export US$2 billion in 3 years
annually to export US$3 billion in 7-10 years
Policy Issues(Section 4)• proactive marketing• R&D• brand and country image creation• production and management development• cluster/linkage creation• rule and regulations
Action Plans(Section 4)
16 programs and 57 projects

21

Appendix Figure 5
Indonesia: National Industrial Development Policy
Introduction(Chap.1)
Vision(Chap.2)
Vision: to become a strong industrial nation in the worldstrong and sustainable industry with strong basis of science and technology
strong industrial structure with linkages between SMEs and large-scale enterprises
balanced growth between SMEs and large scale enterprises
well distributed industries throughout Indonesia
Situational Analysis(Chap. 3, 4, 5)"export potential industries" (natural resource intensive industry, labor intensive
industry, capital intensive industry, technology intensive industry)and "domestic market potential industries"
Targets (Chap. 6)
mid-term objectives (2004-2009)
long-term objectives (2010-2025)• increase labor absorption
10% growth per annum• increase export and empower domestic• create world class industries
market• increase the role of prioritized• increase contribution to economic
industries
growth• increase the role of SMEs in industrial• improve technology
structure• diversify industrial structure andproducts• spread development throughout
Indonesia

Main Strategy Policy Issues (Chap. 6) Operational Strategy• strengthen the linkage at all value• develop conductive and convenient
chain levels
business environment• increase added value along the value• encourage the development of priority
chain
industrial clusters• increase productivity, efficiency andvariety of resources with focus on he useof green product• develop SMEs
Sub-sectoral development policy for 10 core industries (Chap 7)1) Food & beverage; 2) Maine product; 3) textile & textile
products; 4) footwear; 5) palm; 6) wood products; 7) rubber &rubber products; 8) pulp & paper, 9) electric machinery &equipment; 10) petrochemical
Spatial Planning for the core industries (Chap 8)
Institutional framework for implementation (Chapter 9)
Exhibits:
1) analysis on international competitiveness2) map for technological development for prioritized industries3) export-import development (2002-2004)
4) projected growth 2005-09

22

Appendix Figure 6

India: National Strategy for Manufacturing

Introduction(Chapter 1)
Vision(Chapter 2)
to achieve balanced growth of the economy andgenerating adequate employment(it is necessary to increase employment without
sacrificing competitiveness creation)
Targets(Chapter 2)
12 % and above growth per annum by the manufacturing sector
minimum growth rate of 12% per annum to achieve 8-9% GDP growth.
This will contribute over 1.6 million employment per annum (keeping
the employment elasticity constant)
Policy Issues(Section 3 and 4)• Ensuring macro-economic stability (duties, taxes, and subsidies;
FDI; interest rates; labor laws)• Strengthening education and skill building (creation of "Centres of
Excellence in Manufacturing Technologies")• Investing in innovations and technology• Infrastructure development• Providing right market framework and regulatory framework• Enabling SME to achieve competitiveness (cluster approach;application of lean manufacturing)• Enabling public sector enterprises to meet competitive market
conditions• Encouraging intellectual property rights• Increasing the usage of ICT• Improving firm level competitiveness• Benchmarking against best practices• Sub-sector engagement (textiles & garments; leather & leather
products; auto components; drugs & pharmaceuticals; foodprocessing; IT hardware)

23

Appendix Figure 7

India: Industrial Policy of the State of Maharashtra

Introduction(Section 1)
Objective(Section 2 and 3)
to further accelerate the flow of investment in industry andinfrastructure, promoting IT, high-tech, knowledge based and biotech
industries, augmenting exports from the industrial units in the Stateand creating large scale employment opportunities
Policy Issues(Section 5)• incentive provision to new investment in C, D, D+ and no-industry
districts• establishment of Industrial Townships, Special Economic Zones, andSpecialized Industrial Areas• promotion of education and research institution• captive power generation• gas cooperation agreement• review labor laws and procedures• promotion of film industry

Monitoring System(Section 6)24