GRIPS Development Forum
Policy Minutes

Policy Minutes No. 21
GRIPS Development Forum

January 2007

Seminars on East Asian Development Experiences andthe Role of Emerging Donors
Feedback Seminar on GRIPS Study― Managing the Development Process and Aid ―East Asian Experiences in Building Central Economic Agencies
Seminar on FDI Promotion in African Countries― Strategic Action Initiatives for Economic Development ―Malaysia’s Experiences in FDI Promotion and its Applicability to Africa―――――― in Tokyo, Japan (November 8-9, 2006)Foreword
The GRIPS (National Graduate Institute for Policy Studies) Development Forum organized
two seminars, featuring “East Asian Development Experiences and the Role of Emerging
Donors” on November 8-9, 2006.
The main purposes of the two seminars were to: (i) share the interim findings of the GRIPS
study on “Managing the Development Process and Aid” that examines the East Asianexperiences on institution building and enhancement of development administration, withspecial attention to the coordination mechanisms of central economic agencies; and (ii)present concrete on-going initiatives to apply the East Asian experiences of FDI promotion
strategies in Africa. These seminars were complementary and aimed at discussing the East
Asian experiences in development and aid management, as well as investment promotion.
Active discussions took place for both seminars, and we have greatly benefited from valuableremarks and presentations by distinguished panelists and a guest speaker, who have sharedcountry perspectives and their actual experiences in Thailand and Malaysia. In addition,
senior Japanese aid practitioners have provided donor perspectives, building on their richexperiences. The GRIPS team sincerely appreciates their cooperation and valuable inputs tothe seminars.
We would like to publish the records of these two seminars in the GRIPS policy minutes
series to share the content of presentations, issues raised by the panelists, and seminar
discussions. These perspectives will be duly taken into account when the GRIPS team
finalizes its study paper. The policy minutes consist of two parts:• Part I: Feedback seminar on GRIPS study:“Managing the Development Process and Aid—East Asian experiences in building
central economic agencies”• Part II: Seminar on FDI promotion in African countries“Strategic Action Initiatives for Economic Development—Malaysia’s experiences in FDI
promotion and its applicability to Africa”
For more details, please visit the website of GRIPS Development Forum:
http://www.grips.ac.jp/forum-e/research2006/aidmgt.htm (English)
http://www.grips.ac.jp/forum/aidmgt/index.htm (Japanese)
We hope that the two seminars will contribute to deepening discussions on how to concretizeand disseminate East Asian experiences in development and aid management and investment
promotion to the other part of the world including Africa and the role of emerging donors inthese regards.
January 2007
GRIPS Development ForumAbout the speakers
Seminar on 8th November 2006▪

Ms. Izumi Ohno:
Professor / GRIPS
Specialized in development administration and partnership; ODA policies andreform.

▪

Ms. Masumi Shimamura:
Associate Professor / GRIPS
Specialized in international development and economic cooperation policy;
development administration and aid coordination.

Seminar on 9th November 2006▪

Mr. Jegasothy Jegathesan:
Senior Investment Adviser : Consultant to JICA and the Government of Zambia andformer Deputy Director General of the Malaysian Industrial Development Authority(MIDA).

About the panelists
Seminar on 8th November 2006▪

Mr. Nophadol Bhandhugravi:
President of Neighbouring Countries Economic Development Cooperation Agency(NEDA), Thailand.
Prior to NEDA, he was Deputy Director-General of the Fiscal Policy Office,Ministry of Finance.

▪

Mr. Jegasothy Jegathesan:
Senior Investment Adviser : Consultant to JICA and the Government of Zambia andformer Deputy Director General of the Malaysian Industrial Development Authority(MIDA).

▪

Mr. Takeo Matsuzawa:
Director General, Development Assistance Department I, Japan Bank forInternational Cooperation.
Specialized in Overseas Economic Cooperation Operations to Southeast Asian
countries including Thailand, Malaysia and the Philippines.

Seminar on 9th November 2006▪

Mr. Aiichiro Yamamoto:
Senior Assistant to the Director General, Africa Department of the Japan
International Cooperation Agency (JICA).

GRIPS Development Forum Seminars
East Asian Development Experiences and the Role of Emerging Donors

CONTENTSPART I: Feedback Seminar on GRIPS Study: Managing the Development Process
and Aid―East Asian Experiences in Building Central Economic Agencies
Program······································································································································ 2
Report on the Feedback Seminar on GRIPS Study ······························································· 3
Summary of Presentations ······································································································· 4Comments from the Panelists ·································································································· 6Main Points Discussed (Panel Discussion and Q&A Session) ··············································· 10PART II: Seminar on FDI Promotion in African Countries: Strategic Action
Initiatives for Economic Development―Malaysia’s Experiences in FDI
Promotion and its Applicability to Africa
Program···································································································································· 17
Report on the Seminar on FDI Promoting in African countries ········································ 18
Summary of Keynote Speech································································································· 19
Main Points Discussed··········································································································· 22
ANNEXES································································································································ 27
Annex 1: Presentation materials of Part I (PPTs and Handouts)
1-1 “Study Concept and Diverse Model of Macroeconomic Coordination in East
Asia” by Ms. Izumi Ohno····················································································· 29
1-2 “Key Factors Affecting the Effectiveness of Development Administration and
Aid Management in East Asian Countries” by Ms. Masumi Shimamura·············· 47
1-3 Introduction of the NEDA organization: Forward together with Thailand NEDA········ 63
1-4 “Managing the Development Process and Aid” by Mr. Takeo Matsuzawa ············ 69
Annex 2: Presentation materials of Part II (PPTs and Handouts)
2-1 “Strategic Action Initiatives for Economic Development; Strategies for
Investment Promotion in Developing Nations” by Mr. Jegasothy Jegathesan ······ 70
2-2 Comments by Mr. Aiichiro Yamamoto ·································································· 81

PART I
FEEDBACK SEMINAR ON GRIPS STUDY

1

Program<Feedback Seminar on GRIPS Study>
Managing the Development Process and Aid- East Asian Experiences in Building Central Economic Agencies - Time: November 8th 2006 (Wednesday), 13:30-16:30
 Venue: GRIPS Roppongi Campus, Conference Room 4A (4th floor) Program:

13:30-13:40

Introduction(by Ms. Izumi Ohno, Professor, GRIPS)

13:40-14:40

Presentations on the GRIPS study (30 minutes for each) Study Concept and Diverse Models of Macroeconomic Coordination in
East Asia(by Ms. Izumi Ohno, Professor, GRIPS) Key Factors Affecting the Effectiveness of Development Administration
and Aid Management in East Asian Countries(by Ms. Masumi Shimamura, Associate Professor, GRIPS)

14:40-14:50

Intermission

14:50-15:20

Comments from the panelists (10 minutes for each) Mr. Nophadol Bhandhugravi(President, Neighboring Countries Economic Development Cooperation
Agency – NEDA, Thailand) Mr. Jegasothy Jegathesan(Senior Investment Adviser, Consultant to JICA and the Government ofZambia and former Deputy Director General of the Malaysian Industrial
Development Authority – MIDA) Mr. Takeo Matsuzawa(Director General, Development Assistance Department I, Japan Bank forInternational Cooperation – JBIC)

15:20-16:20

Panel discussions and Questions & Answers(Moderator: Ms. Masumi Shimamura)

16:20-16:30

Wrap up2

Report on the Feedback Seminar on GRIPS StudyManaging the Development Process and Aid- East Asian Experiences in Building Central Economic Agencies -The Feedback Seminar on the GRIPS study about East Asian experiences in building central
economic agencies in the areas of development and aid management was the first part of the
GRIPS Development Forum Seminars. The main purpose of this feedback seminar was toshare with those interested stakeholders the interim findings of the GRIPS study on“Managing the Development Process and Aid” that examines the East Asian experiences ininstitution building and enhancement of development administration. By doing so, it intended
to: (i) promote the understanding of how the East Asian countries (namely Thailand, Malaysia
and the Philippines) have managed the development process, integrating aid; (ii) facilitate
active discussions on the relevance of bringing these concrete experiences into today’s
developing countries including Africa; and (iii) enhance the understanding of the role ofemerging donors in East Asia in this regard.
The seminar consisted of three parts. First, the GRIPS study team made two presentations on:(i) the study concept and diverse models of macroeconomic coordination in East Asia by Ms.
Izumi Ohno (GRIPS); and (ii) key factors affecting the effectiveness of development
administration and aid management in East Asian countries by Ms. Masumi Shimamura(GRIPS). This was followed by the comments and discussions by the three panelists with
distinguished professional experiences in development and aid management. These panelists
were: (i) Mr. Nophadol Bhandhugravi, President, Neighbouring Countries Economic
Development Cooperation Agency (NEDA), Thailand; (ii) Mr. J. Jegathesan, Senior
Investment Adviser, Consultant to JICA and the Government of Zambia and former Deputy
Director General of the Malaysian Industrial Development Authority (MIDA); and (iii) Mr.
Takeo Matsuzawa, Director General, Development Assistance Department I, Japan Bank forInternational Cooperation (JBIC). Lastly, panel discussions and questions and answers (Q&A)
by all the participants took place.
This note provides: (i) the summary of presentations by the GRIPS study team; (ii) commentsfrom the three panelists; and (iii) the main points discussed among the GRIPS study team, thepanelists and participants during panel and open discussions.
Approximately fifty aid professionals, including policymakers, practitioners, consultants,
researchers and students participated in the seminar. The participants were those interested in
the issues on strengthening of development administration and capacity building indeveloping countries, as well as global debates on aid effectiveness. Active discussions took
place over: (i) the role of the private sector and public-private cooperation; (ii) the roles oflegislature and politicians (also related to democratization); (iii) decentralization andgovernance structures; (iv) leadership; and (v) the applicability of East Asian experiences to
Africa and the role of donors.
The GRIPS team appreciated valuable inputs and comments provided by the panelists andparticipants and will make necessary revisions to finalize the study paper.

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Summary of Presentations(1) Ms. Izumi Ohno (Professor, GRIPS)“Study Concept and Diverse Models of Macroeconomic Coordination in East Asia”
The speaker first explained the focus of the analysis and basic premise of the GRIPS study. The
study examines Thailand and Malaysia, mainly from the late 1950s to 80s when the current
development administration system was formulated and enhanced. It also includes the analysisof the Philippines before and after the turning point of democracy restoration in 1986. A central
part of the analysis is the coordination mechanisms of central economic agencies—through such
instruments as development plans, budget, public investment and aid management—because
they assume a critical role as “strategic core centers” of development management. The study
also examines key factors affecting their operations and institution building.
This study endeavours to bring country perspectives and learn from the real experiences of thethree East Asian countries. In this respect, the speaker presented the East Asian views of“ownership” (that should be fostered by recipients) by highlighting the three elements that are
insufficiently captured in today’s global debates: (i) managing donors and aid, as integral partof the development process; (ii) willingness to graduate from aid, supported by an “exit plan”;
and (iii) managing policy ideas, with selectively adopting foreign knowledge.
After explaining the country contexts of the three East Asian countries on macroeconomic andaid management, the speaker gave an overview of macroeconomic coordination mechanisms by
central economic agencies and the role of development plan. There exist institutional variations
for the design and coordination mechanisms of central economic agencies, including theirpolicy and resource alignment functions. At the same time, the experiences of Thailand andMalaysia suggest that there exist common functional principles that have ensured theiroperations as strategic core centers. These are a strategic role of development plans,
comprehensive enforcement of macroeconomic guidelines, good inter-agency coordination, andcommitment and capacity to use aid as integral part of the development process. Also, strong
alliance between political leaders and technocrats around shared visions is essential.
The speaker stressed the importance of taking account of the local context when building
institutions and argued that donors should be mindful of promoting alignment of theirassistance, especially in the countries with weak strategic core functions.
[See Annex 1-1 for PPT and handouts]

4(2) Ms. Masumi Shimamura (Associate Professor, GRIPS)“Key Factors Affecting the Effectiveness of Development Administration and Aid
Management in East Asian Countries”
The speaker examined critical factors that affected the formulation and enhancement ofdevelopment administration in three East Asian countries, namely, Thailand, Malaysia and thePhilippines, by looking into the dynamics of development administration: (i) quality ofleadership; (ii) alliance between leadership and technocrats; (iii) fear of external and domestic
crises; (iv) degree of political intervention to the “executive branch”; and (v) utilization of aid
as integral part of development management. The speaker pointed out that the cumulativesynergetic effect of a number of factors had affected the countries’ overall development
administration. External factors (both positive and negative) gave major impacts ondevelopment administration, and leadership mattered especially at critical stages ofdevelopment.
The speaker analyzed diverse mechanisms for development planning, investment
programming and aid management for each country. The actual coordination features were
presented to show how each country organized itself in pursuing priority development goals.
The speaker analyzed how each country brought development plans to realization,
maintaining coherence among development priorities, public investment planning and aid
management. With respect to donor management, the speaker pointed out that both Thailand
and Malaysia have strategically and selectively utilized aid toward “graduation”.
The speaker examined the specific case of one of Thailand’s most notable mega-projects, theEastern Seaboard Development Plan that started in the 1980s to illustrate what major factors
contributed to its advance towards success: (i) strong and effective leadership to ensure thepublic’s interest; (ii) competency of technocrats; (iii) powerful central economic agencies; (iv)
special institutional settings; (v) functioning coordination mechanisms; and (vi) external
global factors.
Finally, the speaker emphasized the need to understand the country context more carefully
when aiming to enhance aid effectiveness because key factors affecting development
administration are diverse and such differences should be well taken into account.
[See Annex 1-2 for PPT]

5

Comments from the Panelists(1) Mr. Nophadol Bhandhugravi, President, Neighbouring Countries Economic
Development Cooperation Agency (NEDA), Thailand1
The first panelist, Mr. Nophadol Bhandhugravi, shared his thoughts on Thailand’s
development administration, looking back to his own experiences as policymaker. Prior to
NEDA, he served for the Fiscal Policy Office (FPO) and the Public Debt Management Office(PDMO) in the Ministry of Finance.
He pointed out the importance of strong leadership, commitment and ownership in order tostrengthen country’s development administration. He emphasized that, especially for alatecomer country, leaders should provide long-term development vision with strong will andthat technocrats in the central economic agencies should translate the vision into action plansby mobilizing various resources and coordinating with various stakeholders including theprivate sector. He remarked that for most part of Thailand’s history, leaders came up withdreams and technocrats translated them into tangible and workable reality.
Mr. Nophadol congratulated the GRIPS team for conducting an excellent study including
country analyses and a case study on Thailand’s Eastern Seaboard Development Plan. The
study has accurate information, with relevant facts and sources that he can hardly argue with.
He also acknowledged the importance of examining the roles and responsibilities of eachcentral economic agency, including how they coordinated among themselves, in order tounderstand Thailand’s success. Nevertheless, he made one correction in the GRIPS
presentation, suggesting that: (i) the “gang of four” referring to the four central economic
agencies should be phrased as the “big four”; and (ii) among the “big four” responsible fordevelopment and aid management, the Bureau of the Budget has played a critical role and the
Bank of Thailand is not one of the “big four,” although it has been a part of various
committees for macroeconomic management2.
Based on his experiences as policy maker at the FPO, Mr. Nophadol recalled that he has
closely worked with the other agencies in handling development management including
foreign aid. He confirmed that the Thai government has utilized aid as supplementaryresources to fill domestic financial gap, as analyzed in the GRIPS study. He emphasized that
Thailand has strived to become self-sufficient, possessing an “exit plan.” While utilizing
foreign aid, the Thai government endeavored to generate its own resources through FDI
promotion and private sector development.
He mentioned that the secret of Thai government’s coordination mechanism lies in theinformal discussions and consensus-building process. It worked the same way for the Eastern
Seaboard Development Plan. In addition to the formal channels such as national committees
1

See Annex 1-3 for introduction of the NEDA Organization.
During the intermission, he clarified that the “big four” consists of the National Economic and Social
Development Board (NESDB), the Bureau of the Budget (BOB), the Fiscal Policy Office (FPO), and the
Public Debt Management Office (PDMO).

2

6

and sub-committees, the Thai government has effectively conducted policy dialogues andcoordination informally with the relevant stakeholders including the private sector to come up
with important policy decisions.
(2) Mr. Jegasothy Jegathesan, Senior Investment Adviser, Consultant to JICA and theGovernment of Zambia, and former Deputy Director General of the Malaysian
Industrial Development Authorities (MIDA)
The second panelist, Mr. Jegathesan, began his comments emphasizing the critical role ofleadership in development management. He then raised an issue of donor-driven agenda
setting especially in Africa, based on his own experiences as investment adviser in various
African countries. He concluded his remark with a concrete suggestion on the key factors that
affected the development administration of the three East Asian countries, which wasaddressed by the GRIPS study.
With regard to the role of leadership, he pointed out that both donor and recipient sides aretrident, consisting of: (i) political leadership; (ii) civil service leadership; and (iii) private
sector leadership. He raised the following questions to donor and recipient sides to provoke
the thinking of "real" motives of leadership, and then emphasized that all these tridents mustcome together to carry out donor assistance successfully3.
<Donor side>• What is the motive of political leadership in donor countries?—to keep recipient countries
totally dependent on donors, or to help recipient countries become self-sufficient andgraduate from aid?
• What is the motive of civil service leadership in donor countries?—for example, howmuch bureaucratic effort has been made to undertake aid activities?
• One can see in many instances “donor fatigue” taking place. But who is at fault.
Ostensibly NO ONE for all undertake these programs with a good motive. But what effort
is made to ensure that the funds provided are “demand-driven” to meet a real and felt needof the recipient nation and to what extent is the aid “supply-driven” to fulfill an agenda ofthe donor government?
<Recipient side>• What is the motive of political leadership in recipient countries?—to use donor money for
their own personal interests, or to use it for national development?
• What is the motive of civil service leadership in recipient countries?—are they committed
to pursuing efficiency and integrity?
• Do recipients accept whatever donor program is offered even if they do not need thisprogram, for fear that any refusal will “offend” the donor and may affect future funds
inflow?

3

The question of the motive of private sector leadership was not raised here, as he was going to cover it
in-depth in the seminar next day.

7

Regarding the issues of donor-driven agenda setting especially in Africa, he emphasized that thecritical challenge for donors is to understand the real needs of recipients and work with themclosely. Often recipients do not speak up their real demand to donors. They are afraid that donor
assistance may be terminated if they dare to speak up. Thus, they prefer to keep quiet.
He also pointed out the significant challenge for donors in helping recipients graduate fromaid. He stressed that the idea of recipients’ “managing donors” and having “exit plans,” assuggested in the GRIPS study, is highly important and that the only solution is to create
wealth and jobs through developing private sector dynamism. It is important to develop theprivate sector as an engine of growth because successful companies generate profits andcontribute to tax revenues, which can then be utilized for building a self-sustainable economy;otherwise, recipient countries would be stuck in poverty and continue with aid dependency. In
this regard, he appreciated Japan’s South-South cooperation proposed at the Tokyo
International Conference for African Development (TICAD) process highly important.
He gave one classic example of how Malaysia handled donor management when it used to be
aid recipient. The Malaysian government did not necessarily listen to everything what donors
suggested. When Malaysia launched the New Economic Policy after the 1969 ethic riot, every
international agency criticized it a “socio-economic engineering” and anticipated its failure.
Despite such criticisms, the Malaysian government firmly maintained its policy andsuccessfully overcame the crisis.
Finally, regarding the implications for donors, he supported the point made by the GRIPS
study on the need for donors to understand the country context more carefully to enhance aid
effectiveness. At the same time, he further suggested that donors make increased effort toassist the countries in establishing an economic environment for creating wealth and jobs by
the private-sector.
(3) Mr. Takeo Matsuzawa, Director General, Development Assistance Department I,
Japan Bank for International Cooperation (JBIC)
The third panelist, Mr. Takeo Matsuzawa, raised the three points from a donor’s perspective:(i) the predictability of development policies, especially from private sector perception; (ii)prioritization on the sector supported by external assistance; and (iii) feedback mechanism ofdevelopment plans.
With regard to the predictability of development policies, he assessed that both Thai and
Malaysian governments have assured their predictability. Especially, the Thai government has
been flexible to meet private sector needs. A good example was the government’s response to
the Eastern Seaboard Development Plan. Also, the Thai government’s policy in promoting
security markets and long-term banking facilities for private sector development had goodeffects on the country’s development programs. In the case of Malaysia, the government has
firmly demonstrated policy continuity, and dared to make huge investments such as super
corridors. Moreover, the Malaysian government, in comparison with the other countries, has
shown the real capacity of implementation.

8

By comparison, he noted that development policies had been less predictable in thePhilippines. Every time government changed, policy also changed. So, there was lack ofpolicy consistency, and the predictability for project implementation was hardly secured. In
this regard, he stated that the discussions on the Philippines’ ongoing efforts to improve policy
predictability might be useful for other developing countries including Africa.
Regarding prioritization for external assistance, he stated that in Thailand, JBIC and theformer Overseas Economic Cooperation Fund (OECF)4 could easily identify and support
Thai government’s strategic priorities. Developing road networks (both national and rural) is agood example, and the government duly considered and specified criteria, such as
improvement of income distribution and alleviation of urban-rural disparities. In the case of
Malaysia, the government has prioritized particular sectors to encourage foreign direct
investment—for example, power generation in the peninsular—although foreign aid is notsought for funding all requirements of the private sector. Such way of prioritization
contributed to attracting more private sectors.
He also shared his thoughts on the feedback mechanism in Thailand looking back to the 1980s
when Dr. Saburo Okita 5 dispatched policy dialogue missions to Thailand. The Thaigovernment revised previous Mid-term Development Plans every five years and shared theirvision with Japan. As such, there was no need for the Japanese government to makeintervention at the micro-level (e.g., small programs and projects). He recalled that suchpolicy dialogue had facilitated aid relationship between Japan and Thailand.
[See Annex 1-4 for the outline of his comments]

4

The current JBIC took over the Official Development Assistance (ODA) loan operations of the OECF in
1998.
5
As a leading economist at the ex-Economic Planning Agency, Dr. Okita made significant contribution torealizing Japan’s post-war economic recovery and growth. Later, he served as the President of ex-OECF
during 1973-77, as well as the Minister of Foreign Affairs during 1979-80.
9Main Points Discussed (Panel Discussions and Q&A Session)
The discussions focused on the following issues: (i) the role of the private sector andpublic-private cooperation; (ii) the roles of legislature and politicians (also related todemocratization); (iii) decentralization and governance structures; (iv) leadership; and (v) theapplicability of East Asian experiences to Africa and the role of donors. Many of the issues
raised (especially (i)-(iv)) are related to the scope, direction, and basic premise of the GRIPS
study. The discussions benefited a lot by the contributions of the three panelists, who provided
their concrete experiences of Thailand and Malaysia in managing the development process
and aid—either from a recipient side or a donor side.
(1) The role of the private sector and public-private cooperation
Several participants noted the importance of analyzing the role of the private sector andpublic-private cooperation. For example, one participant suggested that while the GRIPS study
primarily focused on the role of the government (especially, central economic agencies), it
should also pay attention to the role of the private sector because the private sector served as theother side of the coin in achieving shared growth. Thailand and Malaysia both have had strong
business associations (e.g., Thai Chamber of Commerce, Federation of Malaysian
Manufacturers), and without these professionally managed associations, the role of thegovernment would have been weak. According to him, the role and capacity of businessassociations in the Philippines were relatively weak indeed. He also shared his findings that
although some former socialist countries in East Europe (e.g., Poland, Czech, Hungary) had
strong leadership, super-ministries, and good coordination mechanisms in the 1970s and 80s,
business associations and the private sector had very limited roles in their economies. Anotherparticipant stated that the experiences of Thailand and Malaysia in strengthening public-private
sector consultation process might be relevant to African countries. He suggested that theanalysis of how these governments had established coordination mechanisms and networks withthe private sector in 70s and 80s would enrich the GRIPS study.
Mr. Jegathesan commented on the role of the private sector in Malaysia, looking back to its
historical evolution. After 1969, throughout the 70s and early 80s, no prominent private sector
existed in Malaysia, and there was not single manufacturing factory. So, the country was
purely driven by the government and civil service leadership at the time. However, within ten
years (from 1970 to 80), Malaysia succeeded in promoting export industries. It was only after
the mid-1980s, during Prime Minister Mahathir’s administration, that the Federation of
Malaysian Manufacturers (FMM) and the chamber of commerce had become stronger andthat many of the industries associations (e.g., rubber and electronic industry associations) had
created think tanks to give recommendations to the government. Thus, the local private sector
became part of the think tanks, which facilitated policy coordination between public andprivate sectors. He added that now the private sector was very much part of the government’s
strategic thinking in development administration.
While fully acknowledging the important role of the private sector in the development process,the GRIPS team clarified that this study intended to focus on intra-government coordination10

mechanisms and aid management and that the detailed analysis of the private sector’s role
would be beyond its scope. The GRIPS team recognizes the complementary role between thegovernment and private sector. This is why the study attempts to analyze the functions andcoordination mechanisms of the central economic agencies which could importantly affect theprivate sector’s role and capacity, through such instruments as development planning, public
investment selection, and macroeconomic management (to create an economic environment
conducive to private sector activities).
(2) The roles of the legislature and politicians (also, related to democratization)
Strong interests were shown on the treatment of the executive-legislative relationship,including the role of politicians, in the GRIPS study. A participant commented that while thestudy seemed to treat the legislative intervention into the executive branch (in the case of thePhilippines) negatively, many developing countries today were experiencing the
democratization process where the legislature tended to gain stronger power indecision-making. Therefore, the more balanced view could be taken to examine the role oflegislature in development management. Another participant also suggested the importance ofanalyzing the issues on: (i) capacity building of politicians; and (ii) the role of the parliamentsin Thailand and Malaysia during the 70s and 80s, as compared with that of the Philippines.
While the study analyzes the role of politicians in the Philippines in a negative context, thismay not be the case for Sub-Sahara African countries. The role of politicians in Sub-Sahara
Africa may be considered more positively since they are making efforts to strengthen theircapacity, and external pressure from donors is also generating momentum.
The GRIPS team agreed on the importance of the ongoing democratization process in many
developing countries. It also shared that legislative intervention itself should not be viewed ina negative context because the legislature is expected to provide check and balance functionsin policy decisions. Nevertheless, the GRIPS team stressed that the important point waswhether the whole nation, including politicians, had a shared, united vision for development.
In the case of the Philippines, despite the central government’s effort to formulate and realize
national development priorities from holistic and comprehensive viewpoints, respective
politicians have their own specific interests (often attached to local constituencies) which areapart from national development priorities. Because they propose projects that have nothing to
do with public investment priorities (“pork barrel”), such intervention may lead toinefficiency and create allocative distortion. It is this circumstance—the absence of a shareddevelopment vision across the executive and legislative branches—that political interventions
may become problematic.
A participant supplemented the GRIPS team’s explanation from a public financial
management viewpoint. He stated that the problem with the “pork barrel” was that the
government could not handle the entire inflow of funds because such funds allocated to eachlegislator were not subject to the government’s scrutiny. In other words, legislators try toinsert additional projects and programs, displacing those that have originally received highpriorities in the pubic investment programs.

11

Mr. Jegathesan stressed the vital importance of capacity building of politicians. Althoughmany people discuss capacity building of civil servants and the private sector, the political
capacity building is most crucial. This is one of the important lessons he has learned from his
ongoing work in Zambia6. Unless political leaders at the local and regional levels understandthe direction and reasons for promoting development, they will protest and complain aboutdevelopment policies. Because all political leaders are not economic literates, capacity
building at the political level is essential to make them understood why economic
development and FDI promotion are important. This is the first crucial task toward
strengthening political will.
(3) Decentralization and governance structures
Active discussion took place on decentralization and various levels of governance structures,and the actual decentralization experiences in Thailand and Malaysia were also shared. One
participant pointed out that the study seemed to examine development administration in East
Asia in the 1970s and 80s, mainly in light of their role and functions in managing
infrastructure development rather than service delivery. However, as many countries face thechallenge of expanding and improving service delivery, the study should pay greater attention
to the analysis of governance structure including the sub-national government, the private
sector, and NGOs. Otherwise, this study may have limited relevance and applicability totoday’s developing countries.
The GRIPS team appreciated his comments and stated that it fully recognized the importance ofservice delivery and that such functions might be better served by the decentralized, local
government or other actors. Nevertheless, the team stressed that this study gave importance tothe policies that promote growth and consequently, development administration in support offormulating and implementing growth promotion policies. In this regard, larger-scale public
investments play a vital role, and the functions and coordination mechanisms for development
planning, investment prioritization, resource mobilization become a central part of the analysis.
Then, a participant explained the ongoing decentralization process in Indonesia and asked
how the government (especially local and regional governments) should strengthen theircapacities for development planning and investment programming. Other questions were also
raised regarding different governance structures between Thailand (centralized unitary statesystem) and Malaysia (federal state system) at both central and sub-national levels and theirimplications for institution building in today’s developing countries.
Mr. Jegathesan explained that Malaysia’s federal system has had important advantages inpromoting development. The country has thirteen states. Each state became the engine of
growth, and as a result, thirteen engines of growth have been created. Many of thedevelopment programs have been state-led, and the federal government provided financial
support. Although decentralization/devolution had not been a planned initiative in Malaysia,
under the federal system, each state had to push forward its development agenda and compete
among them to achieve economic development.
6

Mr. Jagethesan is currently involved in South-South Cooperation for Investment Promotion. Please see
the Part II of this policy minutes for the details.
12Mr. Matsuzawa stated that although Thailand and Malaysia had been decentralized, theircentral economic agencies still had important roles. These agencies would set the basic
direction of development in the national development plans, and under such basic direction,
the local governments would incorporate respective local needs and make necessary
modifications. If everything is decentralized and every plan is to be prepared by the local
governments, the scarcity of human resources and capacity would become bottlenecks. As
such, JBIC attaches great importance to coordination between the central economic agencies
and local governments. This point is discussed in details in a recent study: ADB-JBIC-WorldBank on East Asia and Pacific Infrastructure Flagship Study7.
A participant asked how the study incorporated the analysis of corruption because this issue
had increasingly attracted attention in the governance agenda. The GRIPS team responded
that the study did not analyze the issue on corruption per se and rather tried to consider thegovernance issues in relation to the ownership concept. The study also takes account of thepoint made by Prof. Yasutami Shimomura (Hosei University) in his discussion paper8, whichargues that although Thailand did not score highly on the internationally available governanceindices in the 1970s and 80s even compared with Africa and other countries, it has achieved
remarkable economic development. While corruption can be a critical factor affecting
development administration, this may not be the only factor to take account. In other words,
the other factors must be also considered. For these reasons, the GRIPS study primarily
focuses on intra-government coordination mechanisms and alignment functions in view ofdevelopment planning, budgeting, investment selection, aid management, and so on.
(4) Leadership
A participant asked for the conceptual clarification of the “quality of leadership” used in the
GRIPS study. More specifically, the study discusses the “quality of leadership” as one of the
key factors affecting development administration and stresses the importance of strong
leadership. But, it is also possible to regard dictatorship as strong leadership. Therefore, it isnecessary to clarify this concept, especially about the differences between strong leadershipand dictatorship.
The GRIPS team explained that strong leaders were not necessarily effective leaders. A good
example is the comparison between President Marcos in the Philippines and Prime Minister
Prem in Thailand. Although both were strong leaders, Prime Minister Prem was generally
regarded as a strong and effective leader. President Marcos deployed cronies around him who
exercised strong power to maintain his dictatorship and to secure his own interests. On theother hand, Prem had sound vision and dedication to ensure the public’s interest for the
benefit of the whole country. To put it simply, effective government is a subset of the bigger
category of strong government since strong government is not necessarily effective.
Consequently, strong and effective government may have good leadership.

7

Connecting East Asia: A New Framework for Infrastructure, Asian Development Bank, Japan Bank forInternational Cooperation, and the World Bank, 2005.
8“The Role of Governance in Development Revisited: A Proposal of an Alternative View” (2005)
Discussion Paper on Development Assistance No.5, FASID International Development Research Institute.
13

Mr. Jegathesan stressed that leaders should not be confined to Prime Ministers and Presidents
and that this matter should be considered from a broader perspective. There are three
categories of officials that constitute leaders: (i) Prime Ministers and Presidents; (ii) Ministersof government ministries; and (iii) Permanent Secretary and head of departments with theministries (mainly, civil servants). Whereas politicians and ministers ((i) and (ii)) come and go,
civil servants ((iii)) hold permanent jobs. So civil servants assume important role. Problems
occur when the inferior and mediocre people occupy the more superior positions than thosetruly capable and superior. Only when the truly superior people occupy the superior positions,dynamic development would take place. Therefore, the challenge of leadership is how toposition people so that the superior people can occupy the superior positions.
(5) The applicability of East Asian experiences to Africa and the role of donors
Several questions were raised on the applicability of East Asian model to Africa. One
participant asked which country case—among the three East Asian countries (Thailand,
Malaysia and the Philippines)—would be most relevant to the current African context. The
other participant wished to know specific ways how the experiences in Thailand and Malaysia
could be applied to African countries today. The panelists shared respective views based on
their experiences. Discussions also developed into the role of donors in supporting African
development, including possible improvement of current aid approach.
Mr. Nophadol responded that there would be no “one size fit all” panacea and that development
management must be conducted, by taking account of the country-specific context.
Mr. Jegathesan also stated that the applicability of East Asian model(s) should be considered
selectively, for example, by specific sector, rather than nationwide. The African situations aredifferent from those of East Asia, and in fact, there is no Asian success model for aland-locked country. He also pointed out that the problems also existed on the donor side andthat donors must improve their aid-giving practices. His working experiences with the top
government officials in Africa (including the governments of Uganda, Zambia, Senegal and
Ghana) suggest that they are all competent and knowledgeable about the bottlenecks
respective countries face. Although donors tend to tell these governments “what” to do, they
already know the problems and bottlenecks. So, donors should rather advise the governments“how” to do on the ground, by step by step. This is the critical challenge for donors, and many
donors have failed to take such approach.
From a donor perspective, Mr. Matsuzawa stressed that flexibility would be more important
than applying any specific East Asian model(s) to Africa. For long, Japan has been conducting
annual consultations with the recipient countries in East Asia to closely discuss theirdevelopment priorities and the issues on planning and implementation of ODA projects. Suchcontinuous, annual consultations seem to have helped Japanese policymakers and aid
practitioners to deepen their understanding of recipients’ priorities and country-specificproblems and to take flexible approach when adjustments are needed. However, in the case of
Africa, it is difficult for Japan (especially, the ODA loan operations) to conduct annual
consultations with recipient countries due to the resource constraints on the Japanese side. If
Japan wishes to apply its aid approach (which has been extended to East Asia for long) to14

Africa, it would become necessary to focus its assistance on a few countries in Africa insteadof supporting every country in an equal manner.
A participant from the Embassy of Thailand, who has working experiences with various
donors during financial crises in the late 1990s, stated that Japan’s “partnership approach”
was a very good practice. At that time, Japan held consultations with the Thai government,
respecting its ownership. She stressed the vital importance for donors to consider recipient’s
real needs when providing assistance.

15

16

PART IISEMINAR ON FDI PROMOTION IN AFRICAN COUNTRIES

17

Program<Seminar on FDI Promotion in African Countries>
Strategic Action Initiatives for Economic Development- Malaysian Experiences in FDI Promotion and Its Applicability to Africa -

Time: November 9th 2006 (Thursday), 13:30-16:30
Venue: GRIPS Roppongi Campus, Conference Room 3C (3th floor)Program:

13:30-13:40

Introduction(by Ms. Izumi Ohno, Professor, GRIPS)

13:40-15:10

Keynote Speech on FDI promotion initiatives in Africa (90 minutes)
Strategic Action Initiatives for Economic Development: Strategies for
Investment Promotion in Developing Nations(by Mr. Jegasothy Jegathesan, Senior Investment Advisor, Consultant to
JICA and the Government of Zambia and the former Deputy Director
General of the Malaysian Industrial Development Authority – MIDA)

15:10-15:20

Intermission

15:20-15:30

Comment (10 minutes)


Mr. Aiichiro Yamamoto(Senior Assistant to the Director General, Africa Department, Japan
International Cooperation Agency – JICA)

15:20-16:20

Free discussions(Moderator: Ms. Masumi Shimamura, Associate Professor, GRIPS)

16:20-16:30

Wrap up18

Report on Seminar on FDI Promotion in African Countries
Strategic Action Initiatives for Economic Development- Malaysia’s Experiences in FDI Promotion and Its Applicability to Africa -The Seminar on FDI Promotion in African Countries was the second part of GRIPS
Development Forum Seminars on “East Asian Development Experience and the Role ofEmerging Donor.” The main purpose of this seminar was to present concrete on-going
initiatives to apply the Asian experiences in FDI promotion to Africa. Successes of Asian
countries, such as South Korea, Thailand, and Malaysia in FDI-led economic development,suggested some lessons for African countries to solve their today’s social and economic
issues.
The seminar consisted of: (i) keynote speech by Mr. Jegasothy Jegathesan—Senior
Investment Adviser, Consultant to JICA and the Government of Zambia and the former
Deputy Director General of the Malaysian Industrial Development Authority (MIDA)—on
Malaysia’s experiences in FDI promotion and its applicability to Africa; (ii) comments by Mr.
Aiichiro Yamamoto—Senior Assistant to the Director General, Africa Department, JICA; and(iii) questions and answers by all participants.
After introductory remarks by Professor Izumi Ohno, Mr. Jegathesan presented his empiricalexperiences in investment promotion of Malaysia in the 1970s and 1980s as well as its
applicability to Africa. He also introduced the Triangle of Hope (TOH) Program currently
being implemented by JICA and the Government of Zambia under the framework of theSouth-South Cooperation Program, where he provides advisory service as an expert.
Followed his presentation, Mr. Aiichiro Yamamoto from JICA gave comments on thepresentation and supplemental information on how JICA has been supporting Africa in theareas of local industry development.
Approximately forty professionals participated in the seminar, including policy makers,
practitioners, consultants, researchers and students. Active discussions took place over: (i) theapplicability of Asian experiences into Africa, (ii) African growth challenges (especially in
the globalized economy); and (iii) the importance of an “exit strategy” for African countries
to overcome aid dependency and the vital role of leadership in this regard.
The seminar has also confirmed the usefulness of South-South Cooperation Program,including “Asia-Africa Knowledge Co-creation Program.” The participants appreciated the
speaker, the panelist and the GRIPS team for sharing their experiences and views, as well as
providing an opportunity to discuss the African development in an open and objective manner,
based on the concrete, on-going initiatives.

19

Summary of Keynote Speech
Mr. Jegasothy Jegathesan, Senior Investment Adviser, Consultant to JICA and theGovernment of Zambia, and former Deputy Director General of the Malaysian
Industrial Development Authorities (MIDA)“Strategic Action Initiatives for Economic Development: Strategies for Investment
Promotion in Developing Nations”:
Mr. Jegathesan’s presentation is built on his own professional experiences of realizing Malaysia’s
industrial success over thirty years, as the former Deputy Director of MIDA, and also on his
ongoing advisory service for Zambia’s investment promotion. The speaker first explained
Malaysia’s experiences in industrialization in the 1970s and 1980s, drew lessons for Africancountries from these experiences, and then introduced his current activities and experiences incooperation with the Zambian government to implement strategic action initiatives for African
economic development through South-South Cooperation Program of JICA.
(1) Malaysia’s experiences in industrial development
After race riots in 1969, the Malaysian government launched the first, twenty-year Outline
Perspective Plan (OPP) from 1970 to 1990 and the New Economic Policy (NEP) to solve
racial imbalance in wealth distribution. The main objectives of OPP and NEP were to create
jobs and wealth and to redistribute income and opportunities within the context of a rapidly
expanding economy. Ten years after the implementation of the plan and policy, in 1980,
Malaysia transformed from a raw material producer into the world-largest producer ofelectronic semiconductors and the third-largest exporter of room air conditioners. The
successful experiences of Malaysia, which could be useful for African countries, weresummarized in what the speaker called Triangle of Hope, Quadrant Strategy, and Strategic
Action Initiative.
Triangle of Hope (TOH) is a symbol of the harmony among three forces of a nation, namely,(i) political will & integrity, (ii) civil service efficiency & integrity, and (iii) private sector
dynamism & integrity. In Malaysia, all the three forces had same mindset, shared a same
strategic vision and worked together to achieve the national goals. The existence of suchharmony is crucial and prerequisite to development undertakings. However, it is not enoughfor ensuring long-term prosperity and economic stability. For this, “pull factors” that will
absorb flows of FDI, not as a little, occasional dribble, but as a wave, are needed. These pull
factors make up the essence of the Quadrant Strategy for investment promotion, and in fact,
Malaysia implemented such strategy to attract FDI and achieved economic growth. The firststep in this process is to create an attractive environment for general and specific sectors(environment); secondly, identify projects/industries those have comparative and competitive
advantages (projects/industries); thirdly, promote and build national images to attract inflow
of investment (promotion); and finally, implement the approved projects as speedily as
possible to provide the much needed jobs and wealth within country (implementation). The
investment environment created by Malaysian government could be described in a simple

20

formula, namely Strategic Action Initiative (SAI):
E + C4 + O = P
where, P: Profits for enterprises and Prosperity for the nation
E: Environment
C4: Cost and Convenience of doing business, Capability of theenvironment to sustain dynamic growth, and Concessions
O: Opportunities
Regarding the environment (E), the speaker stressed the ten check-points that every investor
would consider before investing in a nation, including: (i) political stability, (ii) economic
fundamentals, (iii) attitude of welcome, (iv) government policies, (v) infrastructure, (vi)human resources (vii) banking and finance, (viii) government bureaucracy, (ix) local businessenvironment, and (x) quality of life. Here, “incentives” were not taken into account because,
according to him, these ten check points would be fundamental to attract competitive andprofitable companies. Just giving government’s incentives without these checkpoints mightend up with inviting less competitive companies.
(2) Lessons for Africa’s investment promotion
Based on the experiences of Malaysia, the speaker drew some useful lessons for Africancountries to promote FDI. The first lesson is the role of leadership. Leaders must empower
the people with the vision so all feel that this was part of their vision and all want to be part ofthe mission to realize the vision. According to him, leaders should not be limited to president,
prime minister or ministers, but also include senior government officials and parliamentarians.
The second lesson is the importance of strengthening competitive advantage because
comparative advantage is not enough. Thirty years ago, Malaysia was in the same position of
Africa in term of economic backwardness, but now it has become a center for businessexcellence. The reason for Malaysia’s success lies in the creation of its competitive
advantages through the implementation of TOH, Quadrant Strategy and SAI. The speakerindicated that the weakness of African countries in the implementation of Quadrant Strategy
was their excessive focus on promotion without the sufficient preparation for the environment
and projects/industries. Moreover, implementation tends to receive lower priority, compared
to project approval. In this regard, he emphasized the role of the National Investment
Promotion Agencies (IPA) as a key element in the SAI formula. But he also stressed that the
IPA was only the arrowhead; by itself it could not hit any target. Thus, there is a need to build
close coordination among policy and law makers, all government departments involved ineconomic development, the private sector, and IPA to achieve the goals. Based on Malaysia’s
experiences, what is needed is not emotional nationalism, but the Strategic Action Initiatives(SAI) to design short-, medium-, and long-term targets.
Another major lesson is the impact of globalization. The speaker stressed the need torecognize the three great waves that are currently driving the economies of nations: (i)agricultural development, which is slow but provides a continuous drive; (ii) industrial
development based on competitive advantage; and (iii) service/knowledge-based industry.

21African countries must do specific analyses and find out which sector(s) and wave(s) should
be followed in order to gain respective competitive advantage.
(3) Ongoing JICA-supported South-South Cooperation Program (between Malaysia andZambia)Finally, the speaker introduced a concrete example of “the Strategic Action Initiatives for
Economic Development in Africa,” based on the ongoing South-South Cooperation Program
by JICA, for which he works as a consultant.
According to him, although many aid programs were implemented in Africa, there was no
single success story so far that others could emulate. Unlike Asia, economic model(s) for
African success stories is yet to be established. To meet such challenge, he proposed that threesuccessful models for African countries be selected, consisting of: (i) a model for land-locked
nations; (ii) a model for nations with coastline and relative large population; and (iii) a model
for island nations. Among the three models, JICA chose the model of land-locked
nations—namely, Zambia—and has initiated the implementation of the SAI under theframework of South-South Cooperation Program. A Memorandum of Understanding (MOU)
was signed between JICA and the Government of Zambia in March 2005 to launch a“Triangle of Hope” Program (the name of the South–South Cooperation Program in Zambia).
The program has been strongly supported by the Zambian government including the President,
as well as parliamentarians. A Presidential Steering Committee chaired by a Deputy Secretary
to the Cabinet has been set up to monitor the implementation of the program. Twelve task
forces including governmental and private sectors have been formed to examine the issues
related to the physical and administrative infrastructure (corresponding to the environment
and implementation in Quadrant Strategy) and sectors that would have competitive advantage(corresponding to projects/industries in Quadrant Strategy). All recommendations made bythese task forces regarding agricultural development, cotton industry, human resource
development, health care, information and communication technology (ICT), tourism, smalland medium-enterprises (SMEs) and so on were approved by the Cabinet. The program isnow moving to the stage of promotion and implementation. Investment seminar will beorganized in Malaysia at the end of November 2006, and a visit by Malaysian Investment
Mission to Zambia is planned for March 2007. The similar promotion activities are expected
to be carried out in the other Asian countries in the second quarter of 2007.
The speaker believed that if all went as planned and all recommendations of the task forceswere fully implemented, Zambia would experience increases in FDI and joint ventures in thenext two and three years, that should bring jobs and wealth for the Zambian people.
[See Annex 2-1 for PPT]22

Main Points Discussed
Initial Comments from the Panelist
Mr. Aiichiro Yamamoto, Senior Assistant to the Director General, Africa Department of
the Japan International Cooperation Agency (JICA)
As the panelist, Mr. Aiichiro Yamamoto shared his views and the information on JICA’s
activities in support of economic development in Africa. His comments focused on the threeissues: (i) the role of Asia-Africa cooperation and the replicabiltiy of Asian success models; (ii)trade and investment in the current globalized economy; and (iii) African growth challenges.
Firstly, regarding the replicabiltiy of Asian success models into Africa, Mr. Yamamoto statedthat a simple copy would not work and that the African people must solve their problems bylearning from the Asian experiences by themselves. This is why JICA has been implementing
the “Asia-Africa Knowledge Co-creation Program (AAKC)” to promote cooperation between
Asia and Africa and to help African countries to solve their problems in an African way, byusing the Asian experiences. Under the AAKC approach, JICA initiated last year a Rural
Community Development Program between Thailand and African countries to share
Thailand’s experiences in rural development with the African countries.
Secondly, he questioned a feasibility of trade- and investment-led development in the current
globalized economy, stating that FDI would not be the only solution across Africa. Because of
the accelerating globalization and increasing pressure for economic integration, Africancountries could not simply follow the same path that the Asian Tigers had gone through in the
1970s-80s. In addition, there exists a big gap across African countries in attracting FDI. So far,
FDI has concentrated in only those countries with rich oil and mineral resources, such as
Angola, Sudan, and Mozambique.
Finally, he discussed African growth challenge. There might be a certain limit if Africancountries try to prepare for economic growth only through FDI in the same fashion as Asia didin the 1980s. African countries should also consider utilizing non-traditional, endogenous andlocal resources more effectively rather than depending on exogenous resources, such aslarge-scale foreign investment. Even in the globalized economy, there are still niches in local
and domestic markets where small businesses could find their ways to market and sell theirproducts. For example, “one village one product” movement in Malawi supported by JICA isnow becoming an engine of local economic growth because through this, Malawi farmers havelearned how to market their products and how to take part in the supply chain in domestic
markets. He suggested that Africa’s growth should be achieved not only by promoting
large-scale foreign investment, but also by stimulating local and domestic economies throughvalue adding to local resources and local marketing. In conclusion, he stressed that the successof Africa would not be brought in from outside, but could come from inside.
[See Annex 2-2 for handout]

23

Free Discussions
The discussions evolved around the following three issues: (i) the applicability of Asianexperiences into Africa; (ii) African growth challenges (especially in the globalized
economy); and (iii) the importance of an “exit strategy” for African countries to overcome aid
dependency and the vital role of leadership in this regard.
(1) Applicability of Asian experiences into Africa
Several participants questioned the applicability of Asian experiences into Africa because thetwo continents differ significantly in terms of people, culture and history. A participant agreed
with Mr. Jegathesan on the vital importance of leadership in driving economic success of acountry, but also argued that it was difficult for many African countries to get long-term visions
and strong commitments from leaders, politicians and parliamentarians because their politicalterms were often short. Based on his experiences in working in Kenya for many years, he
expressed a feeling that it would be very difficult to draw up a successful case in Africa.
While acknowledging the political difficulties in Africa, Mr. Jegathesan reiterated his belief
that a success story could be made in Africa. In fact, JICA’s South-South Cooperation
Program, which is currently being implemented in Zambia and known as the “Triangle ofHope” (TOH) Program, is moving in this direction. This program has received strong
commitment from the President himself and established a strategic vision that has been
widely shared by the Parliament as well. As part of the JICA’s cooperation program, Mr.
Jegathesan undertook briefings to Zambia’s Parliament and Cabinet members and witnessed
the existence of their political support and coalition toward implementing this program. Now,
the TOH program has moved to the stage of implementing the recommendations made by
twelve taskforces. While recognizing the challenges ahead, Mr. Jegathesan stressed that the
TOH program enjoyed strong support and ownership by the Zambian authorities including theprivate sector and that he was hopeful of its success.
Mr. Yamamoto also gave an example in Malawi to complement Mr. Jegathesan’s point on theimportance of leadership. The “one village one product” program in Malawi got strong
commitment from the (previous) President. So, during his terms, the President had alreadyestablished the structure of program implementation at administrative levels. This has secured
the program’s continuity even after the recent change of President. Thus, Malawi’s “onevillage one product” program enjoys the continued implementation under the new leadership.
Another participant stated that it would be difficult for Africa to apply the Asian experiences
due to the historical differences between the two continents. Asia is unique because many
Asian countries received cultural influences by China and India. Prior to colonization, theirindigenous societies had achieved a certain degree of maturity, possessing their own
knowledge and technologies. This might have facilitated the process of their absorbing,
adapting and internalizing Western technologies into their local contexts. However, Africancountries are more diverse and went through dynamic changes. These might have made themmore difficult to establish their own basic technologies, which could have been utilized whenthose countries attempted to absorb and internalize the modern technologies.

24Mr. Jegathesan responded that the differences in culture and history were not decisive factors
for successful economic development, citing Malaysia as a good example in this regard. In thecolonial period and right after dependence, the international society had a pessimistic view on
Malaysia’s future. The prevailing view at that time was that the country would never besuitable for industrialization because the Malaysian people were lazy and the economy
depended heavily on agriculture. But thanks to leaders’ vision and commitments of the people
concerned, Malaysia transformed completely. He reiterated that he was hopeful of Zambia’s
successful future, although it faced many problems at this moment.
(2) African growth challenges
A participant from the Embassy of Zambia thanked Mr. Jegathesan for giving great hope forthe country through his invaluable cooperation and advice to the Zambian authorities. He
explained that Zambia had enjoyed 42 years of peace since independence and thus its politicalenvironment was more stable than in Kenya. At the same time, recognizing the fact that theZambian economy remains heavily dependent on agriculture and agribusiness, he questioned
whether Zambia could develop knowledge-based industries and how Zambia could get
support from JICA to conduct “one village one product” movement.
Regarding knowledge-based industries, Mr. Jegathesan provided the detailed explanation of
the activities and recommendations of twelve taskforces. According to their ideas, Zambia
should and could develop knowledge-intensive industries, such as educational industry, healthcare service, tourism, and information and communication technology (ICT) because these“third wave” industries can build a basis for a center of business excellence and present a
promising opportunity for land-locked countries like Zambia in the age of globalization.
Mr. Yamamoto explained that One Village One Product Movement (OVOP) was multi-faceted
and implemented at different levels. He further went on to say that OVOP consisted of three
categories: (i) the program basically targeted at export industries in large scale, (ii) the“overall movement for small-scale industries” targeted more rather than small groups of
farmers, and (iii) the “one village one product movement” targeted at community-based
groups. According to his analysis, largely in Africa, the third category is more applicable,
especially in agriculture-based countries like Malawi, Ghana, Kenya and Zambia. However, it
should be adapted to the country-specific context and demand. He encouraged the Zambian
government to contact and discuss this matter more in depth with the JICA office in Zambia,
if the government was interested.
Another participant worried about the fiscal constraints faced by many African countries.
Given the fact that wages and salaries accounted for the most part of Zambia’s budget andlittle room was left for developmental activities, he questioned whether the task forces of the
TOH program made any request for budget allocation and how the Zambia government could
get financial sources to implement their recommendations.
Mr. Jegathesan responded that the government had allocated some budgets every year for thetaskforces. Because the cabinet secretariat knows about the program, they have allocatedenough funds for each task force’s activities. The task forces also include private business25

sector. In addition, the government also made a brief report to the donor community to ask fortheir support. He noted that the donors should provide aid based on the countries’ demand tohelp create jobs and wealth. On the other hand, the recipient countries should also build up an“exit strategy” to develop quickly and get out of aid dependence.
A participant questioned how far Malaysia’s New Economic Policy (NEP) has succeeded inraising competitiveness of the Bumiputra Malaysian people. He wondered whether and to what
extent the Bumiputra Malaysian people, after having received many preferential treatments
under the NEP, have become competent compared to the non-Bumiputra Malaysian. Because
many African countries are multi-racial and face racial problems, it is very important to knowwhether African countries can learn from Malaysia’s experiences to solve racial issues.
Mr. Jegathesan explained that the results of the NEP should be evaluated holistically,
considering all aspects, not only discussing the situation of the Bumiputra people. General
speaking, the NEP did not discriminate against any race in the economic activities. The
Chinese and Indian Malaysian were not disturbed at all in conducting their businesses.
Nevertheless, the international society at that time was quite skeptical about the NEP, callingit as a “socio-economic engineering” exercise. Mr. Jegathesan stressed that overall the NEP
had played a critical role in fostering a strategic and shared vision for unified Malaysia,
contributed to overcoming the racial crisis in 1969, and provided the basis of today’s
prosperity. About the applicability of Malaysia’s experiences in solving race riots, Mr.
Jegathesan said that each country had its unique racial situation and must resolve the problem
by its own way.
(3) Importance of an “exit strategy” to overcome aid dependency and the vital role ofleadership in this regard
Throughout his presentation and free discussions, Mr. Jegathesan repeatedly emphasized thatdeveloping countries, including Africa, should establish and implement an “exit strategy” toget out of aid dependency. Each country must formulate a strategic and shared vision for
creating jobs and wealth. Poverty eradication should be considered in the context of a rapidly
expanding economy; otherwise, there is a risk that countries might end up with distributing
poverty nationwide. Leadership based on the coalition across key politicians, civil servants,
and private sector is vital in this regard. This is the essence of “Triangle of Hope” program,which is based on Malaysia’s nation building experiences.

26

ANNEXES

27

28

Annex 1-1
Ms. Ohno’s PPT

Slide 1

Managing the Development
Process and Aid
Study Concept and Diverse Models of
Macroeconomic Coordination in East Asia

GRIPS Development Forum
Izumi Ohno
November 8, 2006

Slide 2Outline of Presentation1.

About the GRIPS study

2.

Country contexts: Thailand, Malaysia andthe Philippines

3.

Overview of macroeconomic coordinationof central economic agencies (CEAs) inthree East Asian countries

4.

Synthesis--Focus of the analysis, basic premise29Annex 1-1
Ms. Ohno’s PPT

Slide 3

1. GRIPS Study: Focus of the Analysis<Issues> Coordination mechanisms of central
economic agencies (CEAs)
Role of Development Plan (DP) in policy and resource
planning, alignment functions; Budget and public investment planning; Aid management
 Key factors affecting CEA effectiveness: therole of leadership, technocrats, etc.

Slide 4

Coordination Mechanisms of CEA
Policy & resource planning,alignment functions

Key actors affecting
CEA functions

VisionPolitical will

LeaderDevelopment plans
Priority policies
Macroeconomic mgt.

CEA Technocrats

Utilize

Aid

PublicInvestment
selection

DonorsBudgetPrivate &non-govt.
stakeholders

Resource
allocation
Private &non-govt
activities

Ministries
Other stateorgans

Implementation, Service delivery etc.

30

Local
govt.

Annex 1-1
Ms. Ohno’s PPT

Slide 5GRIPS Study: Focus of the Analysis<Countries> Thailand and Malaysia (late 50s-80s)
Building institutional basis for developmental CEAs
Mobilizing resources and organizing for development;
achieving structural transformation (esp. 70s-80s)
 New emerging donors The Philippines (esp. late 80s-)
Mixed experiences under the Marcos era;
 Now, renewed effort for CEA building after democracy
restoration in 1986 (“turning point”)


Slide 6GRIPS Study: Basic Premise Emphasis on country perspectives
Real experiences, rather than idealprescriptions
 No standardized, donor-driven approach toinstitution building Critical role of CEAs in managing thedevelopment process East Asian views of ownership31Annex 1-1
Ms. Ohno’s PPT

Slide 7GRIPS Study: Basic Premise<Critical Role of CEAs>
 Economic cases for central administration(Bardhan 1997)
 Policy coordination in the presence of scaleeconomies Inter-jurisdictional externalities, with spillover
effects across localities Support to local administration-- Complementary to decentralized administration-- Providing the enabling environment for private sector
development

Slide 8GRIPS Study： Basic Premise

Developmental” role of CEAs (Johnson,
Haggard, Evans, Wade, etc.)
 Agent of managing the transformative,

development process (Leftwich 1995)
 Strategic core centers:-- Aligning policy planning and resource mobilization
with attaining strategic priorities-- Coordinating different interests of various
stakeholders (domestically and externally; verticallyand horizontally)32

Annex 1-1
Ms. Ohno’s PPT

Slide 9GRIPS Study: Basic Premise<East Asian Views of Ownership > Managing donors and aid, as integral part ofthe development process Willingness to graduate from aid, supported
by an “exit plan”
 Managing policy ideas, with selectively
adopting foreign knowledge(Shimomura and I. Ohno 2005)-Thailand and Malaysia (esp. 70s-80s): demonstrating
East Asian “ownership”.
-The Philippines (esp. late 80s-) : currently making
effort to establish it.

Slide 10Development Management and Aid
RecipientCountries
DonorsDevelopment vision

Identification of aid needs

Development strategy & plan
Implementation (public
investment, service delivery)
Aid money Internal budget

Formulation of aid strategy

Donor (aid) Management

Development effectiveness &sustainability

Aid relationship as part ofthe entire development process

Achievement of strategic goals

Development Management
Source: Adapted from I. Ohno and Niiya (2004)33

Annex 1-1
Ms. Ohno’s PPT

Slide 11

2. Country Contexts<Socio-Economic Indicators>
GNP
per capita ($)

Annual growthrate (%)
per capita
GNP avr.
1965-90

Poverty ratio(%)
1980-90
avr.

1976

1990

South Korea

670

5400

7.1

16

Malaysia

860

2300

4.0

27

Thailand

380

1420

4.4

30

The Philippines

410

730

1.3

58

Sources: World Development Report (1976, 92, 93) and Human Development Report (1992)

Slide 12Country Contexts: Macroeconomic
and Aid Management (Î see Handouts)
Thailand Strong fiscal discipline; prudent debt

Malaysia

 Fiscal activism to support large

The Philippines Problems of allocative efficiency; heavy

management
 Active, but selective use of aid; changes
in aid mix and graduation
development expenditures; overallbalanced economic management
 Selective use of aid; changes in aid mix
and graduation
debt burden constraining development
expenditures
 Active use of aid continuing; selectivity?

34Annex 1-1
Ms. Ohno’s PPT

Slide 13

3. Overview of CEA Macroeconomic
Coordination Mechanisms<Points>
 What are the role and functions of CEAs in
three East Asian countries?
 How have macroeconomic coordination
mechanisms worked?, What are key actors?
 What is the role of development plans (DPs)in policy and resource alignment (i.e.,budget, public investment selection, aid)?
 What are implications for building effective
CEAs?

Slide 14

Overview of Macroeconomic Coordination
Mechanisms
Thailand

Malaysia(esp.70s-80s)(esp.70s-80s)

Role of CEAs in
Strategic coredevelopment mgt. centers

Strategic core

The Philippines(late 80s-now)Strategic corecenters

centers?

 Dual track (theexecutive vs. thelegislature)Insufficient,inter-agency
coordination

Features ofmacroeconomic
coordination

Centralized, but
responsibility
shared amongfour CEAs
Subtle check &balanceCentralized, under
super-ministry(EPU)
Multi-layered,rule-based
coordinationRole of DPs

Guiding policyalignment with
development
priorities, underannual fiscal
scrutiny

Guiding policy &Limited policy &resource alignment resourcewith developmentalignment withpriorities
DPs
DPs as action planto achieve LT vision

Enforcement ofmacro-guidelines

ComprehensiveComprehensive(incl. ODA, SOEs) (incl. ODA, SOEs)

35

Limited, with
exemptions

Annex 1-1
Ms. Ohno’s PPT

Slide 15

3-1. Thailand: CEA Functions and
Key Actors
Centralized power in the four economic
agencies (“gang of four”)







Leadership: empowering technocrats to plan
and administer economic policies

NESDB (National Economic & Social Development Board):
PM’s Office
BOB (Bureau of the Budget): PM’s Office
FPO (Fiscal Policy Office) + PDMO (1999-): MOF
Bank of Thailand: central bank

Technocratic insulation from political interventions

Role of CEA technocratsStrong inter-agency coordination; shared responsibility
Enforcing legal limits for fiscal deficits and external borrowing(But, sector-level coordination not necessarily strong)

Slide 16

Thailand: macroeconomic coordination mechanism
Prudent macroeconomic management as a whole DP alignment

VisionFigureNESDBBOB•Planning•Public investment•Development budget•Budgeting(investment &recurrent)

FPO
DTEC/
TICA
•Technical assistance•Fiscal policy

Prime
Minister

CentralBank
PDMO(1999-)•Monetary policy•Public debt management(including foreign loans)

36

Delegate
authority toplan andadminister
policyAnnex 1-1
Ms. Ohno’s PPT

Slide 17

Thailand: Role of DP in Policy andResource Alignment
 Indicative DPs, without budget implications
 Development priorities clearly indicated in DPs
 ODA utilization strategy included (esp. 60-70s).
 Flexibility in medium-term planning, while

scrutinizing all projects in the annual budget &debt approval decisions
BOB mobile units providing vertical link to line agencies,
through the annual budget process.
 National Debt Policy Committee; National Committee on
State Enterprises.
 Consultation with the private sector (from the70s, strengthened in the 80s)

Slide 18

3-2. Malaysia: CEA Functions and
Key Actors
Centralized power in Prime Minister s Dept.
(EPU as super-ministry)







EPU (Economic Planning Unit): PM’s Dept.
ICU (Implementation Coordination Unit): PM’s Dept.
MOF (Ministry of Finance) and Central Bank

Strong political leadership, providing longterm visions and direction for changes
Role of CEA technocratsTechnical arms to realize PM’s visions (esp. New Economic
Policy or Bumiputra policy in the 70-80s)
DPs and budgets as rolling plans to achieve long-term visions

37

Annex 1-1
Ms. Ohno’s PPT

Slide 19

Malaysia: macroeconomic coordination mechanism

Balanced macroeconomic
management
 DP alignment
Figure•Budgeting (investment& recurrent)•Fiscal policy•Public debt management(including foreign loans)

EPU

Prime
Minister
VisionTechnical
support arm
to realize
PM’s vision•Planning•Public investment•Development budget•Development assistance

MOF
CentralBank•Monetary policy

ICU•Project monitoring

Slide 20

Malaysia: Role of DP in Policy andResource Alignment Directive DPs, with budget implications
 Development priorities and resource allocation

clearly indicated in DPs

Enforcing budget and sector ceilings for the plan period, while
adjusting at mid-term review
 ODA utilization strategy included in DPs (from the 60s andlater expanded as int l cooperation strategy) Multi-layered, inter-agency coordination forplanning and implementation to ensure
coherency

National Planning Committee, National Action Committee (asapexes); top-down and bottom up coordination
 Role of the “planning cells” technocrats -- macro-sector links
 Consultation with the private sector: e.g., annual

budget dialogue (from the 80s)

38

Annex 1-1
Ms. Ohno’s PPT

Slide 213-3. The Philippines: CEA Functions
and Key Actors
Dual track system: executive channel vs.
congressional interventions
President-led NEDA Board (leadership?)

NEDA (National Economic & Development Authority)
DBM (Dept. of Budget Management)
DOF (Dept. of Finance)
Central bank






Cabinet-level, inter-agency coordination bodies(incl. Development Budget Coordination
Committee)



Effort to synchronize DP, Public Investment Plan (PIP), andannual budget; MTEF introduced in 2003.
Effort to strengthen supervision of GOCCs (Govt. Owned andControlled Corporation), esp. on budget and debt approval.



Slide 22

The Philippines: macroeconomic coordination mechanism
Dual
track

Legislature DP alignment

FigureIntervention(especially during budget process)

Executive branchPresident

NEDA Board Cabinet level interagency committees•Planning•Budgeting•Public investment•Regional development etc.

Vision?

DOF•Public debt
management(including
foreign loans)

DBM•Budgeting(investment& recurrent)

NEDA

CentralBank•Monetary policy•Planning•Public investment•Development budget•Development assistance

39

Other relevant
Departments

Annex 1-1
Ms. Ohno’s PPT

Slide 23

The Philippines: Role of DP and
Macroeconomic Coordination Features
 Limited role of DPs in policy planning andresource alignmentNo budget ceilings for DP and PIPStrategy for ODA utilization and private sector collaborationunclear (until recent DP) Weak enforcement of macroeconomic guidelines
 Large GOCCs exempted from ceiling of Foreign Borrowing Act
 Vigorous appraisal and monitoring procedures, applied only for
ODA and BOT projects
 Congressionally initiated projects ( pork barrel funds) outside
the regular budget process Congressional interventions in the annual budget

process, undermining the Executive efforts of
DPs-PIP-budget synchronization

Slide 24

4. Synthesis
 Importance of strengthening CEAs as strategic

core centers of development management Diverse models of macroeconomic coordinationin three East Asian countries
Institutional variation for CEA design and coordination
mechanisms
 Need to take account of the local context when building
effective CEAs
ÆDonors should be mindful of promoting alignment of theirassistance, especially in the countries with weak strategic
core functions.

40Annex 1-1
Ms. Ohno’s PPT

Slide 25

Synthesis
 The Philippines: Building

formal institutions is not sufficient
to ensure their effective operations.
 Importance of the political environment – its
interplay with leadership, technocrats, and CEA
operations.
 Role of aid? – enclave, or an entry point for thebroader institutional reforms?
 Thailand and Malaysia:
 Despite differences, they share common

functional principles to ensure CEA
effectiveness.

Slide 26

Synthesis: Thailand and Malaysia<Differences> Leadership style and operating principles of
CEAs Degree of DPs binding medium-term resource
allocation and project selection<Similarities – “functional” principles> The content of DPs is strategic enough toserve as the core document for policyalignment Comprehensive enforcement of macroeconomic guidelines

41Annex 1-1
Ms. Ohno’s PPT

Slide 27

Synthesis: Thailand and Malaysia
 Good inter-agency coordination to ensure

policy and resource alignment with
development priorities -- within CEAs, plus
between CEAs and line agencies
 Commitment and capacity to use ODA, as
integral part of the development planning,budget and investment planning processes Strong alliance between political leadershipand CEA technocrats around shared visions

The END

42

Annex 1-1
Ms. Ohno’s Handout
Selected Fiscal Indicators (Percentage of GDP)
40.0%

120.0%

Thailand (consolidated central government)

2000

1999

1998

1997

1996

1995

1994

1993

1992

1991

1990

1989

1988

1987

1986

1985

1984

1983

0.0%
1982

-20.0%
1981

20.0%

1980

-10.0%

1979

40.0%

1978

0.0%

1977

60.0%

1976

10.0%

1975

80.0%

1974

20.0%

1973

100.0%

1972

30.0%

Domestic Debt (right axis)

Foreign Debt (right axis)

Total Revenue and Grants

Current Expenditure

Capital ExpenditureOver-all Deficit/Surplus

40.0%

120.0%

Malaysia (consolidated central government)

2000

1999

1998

1997

1996

1995

1994

1993

1992

1991

1990

1989

1988

1987

1986

1985

1984

1983

0.0%
1982

-20.0%
1981

20.0%

1980

-10.0%

1979

40.0%

1978

0.0%

1977

60.0%

1976

10.0%

1975

80.0%

1974

20.0%

1973

100.0%

1972

30.0%

Domestic Debt (right axis)

Foreign Debt (right axis)

Total Revenue and Grants

Current Expenditure

Capital ExpenditureOver-all Deficit/Surplus

40.0%

120.0%

Philippines (consolidated central government)

Domestic Debt (right axis)

Foreign Debt (right axis)

Total Revenue and Grants

Current Expenditure

Capital ExpenditureOver-all Deficit/Surplus

2000

1999

1998

1997

1996

1995

1994

1993

1992

1991

1990

1989

1988

1987

1986

1985

1984

1983

0.0%
1982

-20.0%
1981

20.0%

1980

-10.0%

1979

40.0%

1978

0.0%

1977

60.0%

1976

10.0%

1975

80.0%

1974

20.0%

1973

100.0%

1972

30.0%

Source: IMF, Government Finance Statistics Yearbook (various years), International Financial Statistics(various years) and ADB, Key Indicators of Developing Asian and Pacific Countries (various
years).

43

Annex 1-1
Ms. Ohno’s Handout
Mobilization of Official Development Finance$ million

Thailand

3,500.00
WB & ADB

3,000.00

ODA Loans

2,500.00

ODA Grants

2,000.00
1,500.00
1,000.00

Loans

500.00Grants
2000

1998

1996

1994

1992

1990

1988

1986

1984

1982

1980

1978

1976

1974

1972

1970

1968

1966

1964

1962

1960

0.00

Year

WB & ADB

ThailandODA Loans100%

ODA Grants

80%

60%

Loans

40%

20%
Grants

1 US
2 WB
3 Germany
4 Japan
5 Austria

1 US
2 WB
3 Japan
4 Germany
5 Australia

1 WB
2 US
3 Japan
4 ADB
5 Germany

1 Japan
2 WB
3 ADB
4 IMF
5 Germany

1 WB
2 Japan
3 ADB
4 Germany
5 UNHCR

1 Japan
1 Japan
2 WB
2 WB
3 ADB
3 ADB
4 Germany 4 Germany
5 France 5 France

2000

1998

1996

1994

1992

1990

1988

1986

1984

1982

1980

1978

1976

1974

1972

1970

1968

1966

1964

1962

1960

0%

1 Japan
2 WB
3 ADB
4 Germany
5 Denmark

Year

Top 5
donorsNote:
The amount of aid (including WB and ADB) is calculated on a gross disbursement base.
Source: OECD/DAC, Geographical Distribution of Financial Flows to Aid Recipients 2000/2004.

44

Annex 1-1
Ms. Ohno’s Handout$ million

Malaysia

3,500.00
WB & ADB

3,000.00

ODA Loans

2,500.00

ODA Grants

2,000.00
1,500.00
1,000.00
500.00Loans
GrantsMalaysia

2000

1998

1996

1994

1992

1990

1988

1986

1984

1982

1980

1978

1976

1974

1972

1970

1968

1966

1964

1962

1960

0.00

Year

WB & ADBODA Loans100%

ODA Grants
80%
Loans

60%
40%
20%

Grants

1 UK
2 US
3 WB
4 Canada
5 Australia

1 WB
2 UK
3 US
4 Japan
5 Australia

1 WB
2 Japan
3 UK
4 ADB
5 Australia

1 WB
2 Japan
3 ADB
4 UK
5 UNHCR

1 Japan
2 WB
3 ADB
4 Australia
5 ArabCountries

1 Japan
1 Japan
2 WB
2 WB
3 ADB
3 ADB
4 Australia 4 Australia
5 UK
5 UK

2000

1998

1996

1994

1992

1990

1988

1986

1984

1982

1980

1978

1976

1974

1972

1970

1968

1966

1964

1962

1960

0%

1 Japan
2 WB
3 ADB
4 Denmark5 Germany

Year

Top 5
donorsNote:
The amount of aid (including WB and ADB) is calculated on a gross disbursement base.
Source: OECD/DAC, Geographical Distribution of Financial Flows to Aid Recipients 2000/2004.

45

Annex 1-1
Ms. Ohno’s Handout$ million

Philippines

3,500.00
WB & ADB

3,000.00

ODA Loans

2,500.00

ODA Grants

2,000.00
1,500.00
1,000.00

Loans

500.00Grants$ million

Philippines

2000

1998

1996

1994

1992

1990

1988

1986

1984

1982

1980

1978

1976

1974

1972

1970

1968

1966

1964

1962

1960

0.00

Year

WB & ADBODA Loans100%

ODA Grants
80%
Loans

60%
40%
20%

Grants

1 US
2 Japan
3 WB
4 Canada
5 Germany

1 Japan
2 US
3 WB
4 Germany
5 UNDP

1 Japan
2 US
3 WB
4 ADB
5 UNDP

1 WB
2 Japan
3 US
4 ADB
5 IMF

1 WB
2 Japan
3 ADB
4 US
5 Germany

1 Japan
2 WB
3 US
4 ADB
5 Germany

1 Japan
2 WB
3 US
4 ADB
5 AsDF

1 Japan
2 WB
3 ADB
4 US
5 Germany

2000

1998

1996

1994

1992

1990

1988

1986

1984

1982

1980

1978

1976

1974

1972

1970

1968

1966

1964

1962

1960

0%
Year

Top 5
donorsNote:
The amount of aid (including WB and ADB) is calculated on a gross disbursement base.
Source: OECD/DAC, Geographical Distribution of Financial Flows to Aid Recipients 2000/2004.

46

Annex 1-2
Ms. Shimamura’s PPT

Slide 1

Managing the Development Process and Aid-- Key Factors Affecting the Effectiveness ofDevelopment Administration and Aid Managementin East Asian Countries --GRIPS Development Forum
Masumi Shimamura
November 8, 2006

Slide 2Outline of Presentation
Dynamisms of development
administration including the use of aid
2. Diverse mechanisms for development
planning, investment programming andaid management
3. Eastern Seaboard Development inThailand
4. Synthesis
1.

<Countries and periods of focus>
 Thailand and Malaysia: from the late 50s to the 80s
 The Philippines: before and after the 1986 “turning point”

47

Annex 1-2
Ms. Shimamura’s PPT

Slide 3

1. Dynamisms of development
administration including the use of aid
Thailand

Malaysia

The Philippines

Formulationofdevelopment
administration

Late 50s-earlyLate 50s-early 60s:
60s: with donor
with donor advice
advice (WB, US etc), (WB, US, UK etc),
basic foundations
basic foundations forfor coordination
planning andmechanisms
coordination
established among
mechanisms
central economic
established and theagencies
PM’s Department
strengthened

70s: centralized
development
administrative body
(NEDA) createdAfter 86: NEDA
reorganized, andinter-agency
committees began tofacilitate coordination

Enhancementofdevelopment
administration

80s: national-levelcommittees andsub-committees
established tofacilitate
coordination ofpriority policy
agenda and publicprivate coordination
strengthened90s: inter-agency
committee functions
institutionalized, andODA management
strengthened, butlegislativeintervention
marginalizing suchexecutive efforts

70s: newadministrative
machinery (esp.ICU)
added to implement
New Economic Policy
80s: coordination
system between
public and private
sector strengthened

Slide 4Thailand: Major characteristics ofthe development administration<Thailand>

Delegate authority

esp. in 1980s

Leader“Bureaucratic polity”

Centralized
systemTechnocrats(CentralEconomic
Agencies)

Centralized systemmanaged by elitetechnocrats who weredelegated authority
from political leaders

Ministries,
departments, otherstate organs andlocal governments

48

Annex 1-2
Ms. Shimamura’s PPT

Slide 5

Malaysia: Major characteristics ofthe development administration<Malaysia>

Support to realize
leader’s vision

“Top-down” development
Centralizedadministration
systemLeaderTechnocrats(CentralEconomic
Agencies)

Centralized system led bypolitical leaders andsupported by elitetechnocrats to realize
leaders’ vision

Ministries,
departments, otherstate organs andlocal governments

Slide 6

The Philippines: Major characteristics ofthe development administration<The Philippines>

Legislatureesp. after 1986
Leader“Dual track” development
administration
Dual system administeredby executive branch but
challenged by legislativeintervention

49

Intervention

Technocrats(CentralEconomic
Agencies)

Ministries,
departments, otherstate organs andlocal governments

Executive
branchAnnex 1-2
Ms. Shimamura’s PPT

Slide 7

Key factors affecting the formulation andenhancement of the development administration
 Quality of leadership-- long-term visions and political will

 Alliance between leadership and technocrats-- role of technocrats to realize leaders’ visions

 Fear of external and domestic crises-- a sense of political, social and economic urgency

 Degree of political intervention to the“executive branch”
 Utilization of aid as integral part ofdevelopment management

Slide 8

Key factors affecting the formulation andenhancement of the development administration<Basic assumption>
 Synergetic effects of each “factor” affected thecountries’ overall development administration
 (Uncontrollable) external factors (both positive
and negative) gave major impacts on thedevelopment administration
 Effect of the 1985 Plaza Accord in Thailand Aftermath of the 1969 ethnic riot in Malaysia

 Leadership mattered especially at the criticalstages of developmentÎ Thailand and Malaysia were blessed with wellbalanced, visionary and dedicated leaders at timesof turning points

50Annex 1-2
Ms. Shimamura’s PPT

Slide 9Thailand: Key factors affecting the formulation andenhancement of the development administration
Quality of leadership

PM Sarit (Late 50s-early 60s) -- showeddevelopment vision and exercised strong
leadership
PM Prem (80s) -- played a leading role
especially in priority policy agenda, anddelegated authority to technocrats
Alliance between
Competent technocrats functioned as
leadership and technocrats strong support arms to administer policy

Fear of external anddomestic crises

Thai gov’t strived for structuraltransformation (late 70s-80s)

Degree of political
Technocrats were effectively insulated
intervention to thefrom political pressures“executive branch”
Utilization of aid asThai gov’t strategically and selectively
integral part ofutilized donor assistance for “graduation”
development management

Slide 10

Malaysia: Key factors affecting the formulation andenhancement of the development administration
Quality ofleadership

PM Rahman (Late 50s-70s) -- exercised strong
leadership to carry out effective rural development
PM Razak (70s) -- played a leading role inenhancing administrative machinery to implement
New Economic Policy
PM Mahathir (80s-) -- exercised strong leadership instrengthening public private partnership
Alliance between Technocrats made efforts to enhance administrative
leadership andcapacity and human resource development to realize
technocrats
PM’s vision and policy objectives
Fear of domestic Malaysia gov’t utilized development machinery as acrisestool to realize the country’s overriding objective:
promoting national unity through “poverty
eradication” and “restructuring of society”
Utilization of aid Malaysia gov’t strategically and selectively utilized
as integral part
donor assistance for “graduation”
of development
management51

Annex 1-2
Ms. Shimamura’s PPT

Slide 11

The Philippines: Key factors affecting the formulationand enhancement of the development administration
Quality ofleadership

President Marcos (prior to 86) -- created central
development administration system to maintain his
dictatorship
President Aquino (after 86) -- reorganizeddevelopment administration system with theresumption of democracy
President Ramos (90s) -- strengthened andinstitutionalized development administration system
Alliance between
Technocrats streamlined administrative structures
leadership andand functions to efficiently carry out development
technocrats
policyDegree of political “Legislative intervention” over the “executive
intervention tobranch”, especially during the budget process,the “executive
undermining the role and efforts by the technocrats
branch”
Utilization of aid
The Philippine gov’t has been utilizing foreign
as integral part of assistance actively -- strategic and selective use ofdevelopment
aid???
management

Slide 12

2. Diverse mechanisms for development planning,
investment programming and aid management
ThailandDevelopment Indicative planPlans
utilized as strategic
core documents(dev’t priorities
clearly indicated)
Do not specify
budget allocationÎsecuring room forflexibility
Public investment
PublicInvestment selected in thesubsequent annual
Plans
budget and debt
approval process(except for the 70s 3rd and 4th
Development Plans)
Project
approvalProject approval
integrated into
annual budget/debt
approval process

Malaysia

The Philippines

Directive planutilized as strategic
core documents(dev’t priorities
clearly indicated)
Specify budget
allocationÎadjusted at midterm review
Public investment
selected as part ofdevelopment
planning processÎDevelopment
Plans play the roleof de facto PIPStill insufficient as
strategic core
documents (in spite ofongoing efforts)
Do not specify budget
allocationÎlacking alignment
with budget implication

Project approval
conducted as partof development
planning process52

Public Investment
Plans prepared inparallel with
Development Plans,
but their linkages
remain weakÎstill remain as “wishlist” of projects
Project approval
conducted after PIP
process and before
annual budget process

Annex 1-2
Ms. Shimamura’s PPT

Slide 13

Coherence between development plans and investment plans<Thailand>Annual budget andNational Economic and Social Development
Plan (NESDP) Î 5year-plan*

debt approval

Projectapproval
approval Project(as part of annual
budget/debt approval
process)

Development Plan
* 1st NESDP was the only 6-year plan

<Malaysia>
Malaysia Plan Î 5-year planDevelopment PlanAnnual budget andPublic Investment Plan

debt approval Project
Project approval
approval<Philippines>
Medium-Term Philippine Development
Plan (MTPDP) Î 6-year plan*Development Plan
* coincides with the presidential termProjectapproval

Medium-Term Public Investment
Program (MTPIP) Î companion
document of the MTPDP
Public Investment

Annual budget anddebt approval

Plan
Source: Author

Slide 14

Thailand: Overview of development planning and investment programming<National Economic and Social
Development Plan (NESDP)>
Development planningAnnual budget and debt
approval Project approval<Focal point>

conducted as a part of the annual
budget/debt approval process

NESDB (National Economic
and Social Development
Board)<Focal point>

BOB (budget) andFPO+PDMO(1999-) (loans)<Coordination>
Coordination mainly among central
economic agencies):
NESDB
BOB (Bureau of the Budget)
FPO (Fiscal Policy Office) + PDMO (Public
Debt Management Office, 1999-)
Central Bank

<Coordination>
Budget hearings and dialogues:
BOB “mobile units”
State enterprises
Consultation with other central
economic agencies:NESDB
FPO, PDMOCentral Bank

*macro-sector coordination relatively weak

<Coordination mechanisms>
Î Centralized system, with strong coordination among central
economic agencies (CEAs) -- subtle check and balance functions
built-in, leading to shared responsibilities among CEAs
Source: Author – drawn from information provided by NESDB, BOB, FPO and PDMO to the GRIPS team53

Annex 1-2
Ms. Shimamura’s PPT

Slide 15

Malaysia: Overview of development planning and investment programming<Malaysia Plan>Development planningPublic investment planningAnnual budget and debt
approval

Project approval
approval Project<Focal point>

MOF (Ministry of Finance)<Focal point>

EPU (Economic
Unit)

Planning<Coordination>
Coordination for planning:
National Planning Council (Cabinet level)
National
Development
Planning Council(Officials level)
Inter-Agency
Planning Groups (Working
level)
Coordination for project approval:
Development
Projects
Examination
Committees (ministries, agencies, state gov’t)<Coordination>
Budget hearings and dialogues:
“Planning cells” in the relevant
ministries and agencies
State governments
Private sector
NGOs
Consultation:
EPU
ICU (Implementation Coordination
Unit)
PSD (Public Service Department)<Coordination mechanisms>
Î Rule-based operations duly installed in the coordination machinery
Source: Author -- drawn from “Development Planning in Malaysia” issued by the EPU in 2004 and information provided by
EPU to the GRIPS team

Slide 16
The Philippines: Overview of development planning and investment programming<Medium-Term Philippine
Development Plan (MTPDP)>

 Project approvalP<Focal point>
NEDADevelopment planning<Coordination>
Coordination for project approval:
NEDA Board Investment Coordination
Committees (ICC)ICC-Cabinet Committee
ICC-Technical BoardICC-Secretariat

Weak linkage<Medium-Term Public
Investment Program (MTPIP)>
Public investment planning<Focal point>

NEDA (National Economic
and Development Authority)
Annual budget and debt
approval<Coordination>
Coordination for MTPDP:
Planning Committees
Technical Working Groups
Legislative Executive Development
Advisory Council (LEDAC)
Coordination for MTPIP:NEDA Board Committees
Planning Committees
Regional
Development
CouncilCommittees<Focal point>

DBM (Department of Budget
and Management)<Coordination>
Coordination for budget process:Development Budget
Coordination
Committee (DBCC)

Source: Author -- drawn from information provided by NEDA to the GRIPS team54

Annex 1-2
Ms. Shimamura’s PPT

Slide 17

Coherence between development plans andinvestment plans<Thailand>

 NESDPs used to be quantitative, strategic guidance withresource allocations Înow descriptive, qualitative analysis<Malaysia>

 Malaysia Plans maintaining the roles as the quantitativeand strategic guidance for development objectives andresource allocations<The Philippines>

 Executive efforts on-going to strengthen the MTPDPs andthe MTPIPs to become strategic guidance for development
objectives and resource allocation
 …but “legislative interventions” undermining these efforts

Slide 18

Thailand: Approval process for public investment projects
Project Approval Process prior to 1992 -- all public investment projects
in theory (based on the NESDB Act in 1978)
Annual budget approval process

Inclusionin Annual
BudgetPlan

BOB(Gov’tbudget)Lineagenciesor Stateenterprises(SOE)

Reporting
Ministriesof Gov’tunits or
SOE

NESDB

CabinetParliament

by line agencies
or SOE

CabinetFPO(Domestic
and foreignloans)

Inclusion in
AnnualBorrowing Plan
(both domestic
and foreignloans)

CabinetNESDB: National Economic and Social Development Board
BOB: Bureau of the Budget
Annual debt approval process

FPO: Fiscal Policy Office

Source: Author -- drawn upon provisions from the National Economic and Social Development Board Act of 1978
and information provided by BOB, FPO and PDMO to the GRIPS team55

Annex 1-2
Ms. Shimamura’s PPT

Slide 19

Thailand: Approval process for public investment projects
Project Approval Process (recent normal procedures) -- public
investment projects (including SOE projects) over one billion baht
If shortcut route istaken, Cabinet will
ask comments fromtheconcerned
agencies
includingthe NESDB, the MOF
and the BOB prior toapproval.

Lineagenciesor Stateenterprises(SOE)

Reporting
Ministriesof Gov’tunits or
SOE(i) Ministries must submit
project proposals to the
NESDB if they were SOE
projects but (ii) they can
submit project proposals
either directly to the
Cabinet, bypassing theNESDB for shortcut, or
through the NESDB, if
they
were
not
SOE
projects.

Annual budget approval process

Inclusionin Annual
BudgetPlan

BOB(Gov’tbudget)Parliament

CabinetShortcutby line agencies
or SOE

CabinetPDMO(Domestic
and foreignloans)

Required if SOE

NESDB

PDMO: Public Debt Management Office* PDMO was formed after 1999 throughtransfer of divisions and units from the
FPO and the Comptroller General’s
Department to ensure coherent public
debt management under one agency

Inclusion in
AnnualBorrowing Plan
(both domestic
and foreignloans)

CabinetAnnual debt approval process

Source: Modification of the figure in “Policy Coordination, Planning and Infrastructure Provision: A Case Study of Thailand”, abackground paper commissioned for the ADB-JBIC-World Bank East Asia and Pacific Infrastructure Flagship Study in 2004

Slide 20

Malaysia: Approval process for public investment projects
Project Approval Process for the Malaysia Plans (Five-year Dev’t Plans)by ministries/agencies
and state government(for both development
and recurrent budget)

Ministries
Agencies
State gov’ts

EPU

Development
Projects
Examination
Committees
Chair: EPU

Consultation(If Federal Ministries,
consultation
throughtheir state branches)State EPUs

EPU

CabinetReallocation ofdevelopment
budget among
sectors,
if
necessary

As a part of Five-year Development Planning process

EPU: Economic Planning Unit

Parliament

Parliament

MOF

Consultation

EPU
ICU
PSD

Budgethearings
andbudgetdialogues“Planning cells” in therelevant ministries
and agencies,
State governments,
Private sector,
NGOs

MOF: Ministry of Finance
Annual budget and debt
approval process

ICU: Implementation Coordination Unit
PSD: Public Service Department

Source: Author -- drawn from “Development Planning in Malaysia” issued by the EPU in 2004 and information
provided by EPU to the GRIPS team56

Annex 1-2
Ms. Shimamura’s PPT

Slide 21

The Philippines: Approval process for public investment projects
Project Approval Process -- public investment projects (namely ODA andBOT projects) subject to ICC approval
Three levels of ICC

Line
agencies

NEDA
Technical
Staff

ICC
Secretariat

ICCTechnical
Board

Locally-funded
projects
aresubmitted to the DBM and/or the
NEDA depending on the size of the
project. The ICC has yet to evaluate
and approve a locally-funded project,as projects submitted to the DBM for
local funding are below the ICC
threshold of 500 million pesos.
Hence, inclusion of the project in thenational budget by the DBM becomesthe crucial selection decision for
locally-funded projects.

ICCCabinet
Committee

NEDA
Board

by line agencies

DBM

DBCC

NEDA: National Economic and Development Agency

CabinetProject approval

Inclusion of the
project in thenational budget
constitutes final
project approval

President

Congress

Annual budget approval process

ICC: Investment Coordination Committee
DBM: Department of Budget and Management
DBCC: Development Budget Coordination Committee
Source: Author -- drawn from information provided by NEDA to the GRIPS team

Slide 22

Project preparation and investment decision process
for locally funded projects and ODA projects
Thailand”Integrated

system”ÎSameprocedures andcriteria applied aspart of annual
budget/debt
approval process

Malaysia
”Integrated

system”ÎRegardless of thesources of funds,
any candidate
projects must be
scrutinized as partof the planning
process of the
Malaysia Plans

57

The Philippines
”Dual system”

Î Procedures
and criteria
applied for
locally-funded
projects are lessintensive and lesswell defined thanthose applied to
ODA projects

Annex 1-2
Ms. Shimamura’s PPT

Slide 23

Project preparation and investment decision process-- comparison among the three countries -<Thailand and Malaysia>
 “Integrated system”
 Strategically and selectively utilized aidÎ Both gov’ts strategically shifted donor composition andthe form of aid in accordance with their development
stagesÎ Both gov’ts have been careful about maintaining
bargaining power against donors<The Philippines> “Dual system”
 Setting up dual and exceptional system for ODA

would increase gov’s administrative burdenÎ create distortion and inefficiency to the economy as awhole

Slide 24

3. Eastern Seaboard Development in Thailand Mega infrastructure investments (developmentof special integrated economic zone) at thetime of structural transformation (mainly in the80s) Regarded as high priority development in the
5th and 6th NESDPs -- growth strategy withstrong country ownership Lots of controversies among stakeholders on
macroeconomic management and projectsustainability
 Intensive and strategic use of aid as integral
part of development management58Annex 1-2
Ms. Shimamura’s PPT

Slide 25

Key factors affecting the effectiveness of the development
 Strong and effective leadership toensure the public’s interest
 Competency of technocrats
 Powerful central economic agencies(esp. NESDB) Special institutional settings
 Functioning coordination mechanisms
 External factors

Slide 26

Key factors affecting the effectiveness of the development
Quality ofleadership
Competencyof technocrats

PM Prem (80s) had sound vision, strong sense ofcommitment and strong leadership
Highly motivated, competent technocrats functioned asstrong support arms to the PM

Powerful CEA(esp. NESDB)The NESDB given due authority and functioned as the
Secretariat of the Eastern Seaboard Development
Committee – “influential liaison”

Specialinstitutionalsettings

PM Prem created special coordination and decision
making mechanisms exclusively for the development

Functioning
coordination
mechanisms

Highly centralized mechanism
De facto “fast track” process
Multilayered, check and balance function incorporated
Mechanism to pursue “strategic use of donor assistance”
incorporated
Î pragmatic, independent judgment possible

Externalfactors

The significant impact of the Plaza Accord in 1985

59

Annex 1-2
Ms. Shimamura’s PPT

Slide 27

Overview of the coordination and decision making mechanisms
Cabinet
ProposeEastern Seaboard Development Committee (ESDC)
Chair: Prime Minister (later, Deputy PM)
Secretary: Secretary General of the National Economic and Social
Development Board (NESDB)
Propose・Approve・Control・Direct
・Supervise

Appoint

Sub-committees
Chair: Minister of government agency in charge

BudgetBureau of the
Budget (BOB)

Secretariat

Technical Assistance
Department of Technicaland Economic Cooperation(DTEC)

Loan

Office of the Eastern Seaboard
Development
Committee(OESD) within the NESDBFiscal Policy
Office (FPO)
・Coordinate
・Oversee・AdviseGovernment agencies (central, regional, local) and State enterprises

Source: Author -- drawn upon provisions from the Regulations of the Office of the Prime Minister Governing the Eastern
Seaboard Development (1985) and information provided by NESDB, TICA, BOB, FPO, PDMO and MOI to the GRIPS team

Slide 28

Key factors affecting the effectiveness of the development
 Synergetic effects of each “factor”

contributed to push forward thedevelopment Thai gov’t was capable of taking fulladvantage of the positive external factors(i.e. 1985 Plaza Accord) by utilizing theexisting coordination mechanisms guided by
the strong and effective leadership with thesupport of competent technocrats
 Thailand was blessed with excellent leaders
at the time of structural transformation

60Annex 1-2
Ms. Shimamura’s PPT

Slide 29

4. Synthesis
Diverse institutional framework, coordination

mechanism and approval procedures fordevelopment administration and aid
management
Various quality and competency of key actors
and relationship among them
Different configuration in terms of coherence
between development plans and investment
plans
“Integrated system” vs. “dual system” between
locally-funded projects and ODA projects giving
different implication in the use of aid andefficiency considerations

Slide 30

SynthesisÎNeed to understand the country context
carefully when aiming to enhance aid
effectiveness Quality of leadership Alliance between leadership and technocrats
 Role of central economic agencies and thecoordination mechanisms
 Degree of political intervention to the“executive branch”
 Utilization of aid as integral part ofdevelopment management

61Annex 1-2
Ms. Shimamura’s PPT

Slide 31

Thank you very much!
Please see our website for this study: "Managing theDevelopment Process and Aid"
<English site>
http://www.grips.ac.jp/forum-e/research2006/aidmgt.htm<Japanese site>
http://www.grips.ac.jp/forum/aidmgt/index.htm
We welcome your comments and feedback.

62

Annex 1-3
Introduction of the NEDA Organization

Slide 2

Slide 1

FORWARD TOGETHERWITH THAILAND“NEDA”

Neighbouring Countries Economic
Development Cooperation Agency(Public Organization): NEDA

Ministry of FinanceSlide 3Slide 4OVERVIEWBACKGROUND (1)

FOREIGN AFFAIRS POLICY
OF THAILAND
Relation withneighbouring
countries as
strategic allies

 For Thailand’s geographical proximity,strong cultural ties with countries inthis sub region, Thailand offers Strong
commitment to promote greater
economic linkages among the countries
in Mekong Sub region.
 Thailand is expected to play an activerole. Reflecting this thinking, The Royal
Thai Government, in 1988
announced a policy of turning Mekong
Riparian States to Prosperous Economic
Zone.

Link
neighbouring
countries to
sub-regions

Economic cooperations
with neighbouring
countries’ governments,
private sectors andlocals authorities underframeworks of
ACMECS/GMS/BIMSTEC/IMT-GT

Slide 5Slide 6BACKGROUND (2)In line with the policy to strengthen theeconomic stability of the neighbouring
countries with emphasis ininfrastructure, trade, tourism,
international investments also as
economic safety nets for Thailand.
Royal Thai Government established theneighbouring Countries Economic
Development Cooperation Agency(Public Organization) “NEDA” on 17
May, 2005.

From NECF to NEDA
Fiscal Policy Office,Ministry of Finance
Neighbouring
Countries Economic
Development
Cooperation Fund:
NECF

Neighbouring Countries
Economic Development
Cooperation agency(Public Organization)(Financial Assistance)(Financial and Technical
Assistance)

1996 -2005

63

Ministry of Finance2005 -

Annex 1-3
Introduction of the NEDA Organization

Slide 7

Slide 8

Vision:NEDA has a vision to be an allied agency
to foster econom ic-developm ent partnershipwith neighbouring countries so as to induce
sustainable prosperity and w ell beings of thepeoples in the region.
Mission:NEDA s m ission is to enhancecooperations by providing financial assistances
and technical assistances to Thailand sneighbouring countries in order to support
econom ic developm ents.

Vision and Mission of NEDA

7

8

Slide 9Slide 10

OUR NEIGHBOURING COUNTRIESNEDA is a bilateral Official
Development Assistance (ODA) of theRoyal Thai Government¾

LAO PDR.

¾

CAMBODIA¾

MYANMAR¾

OTHERS

Slide 12Slide 11

NEDA will make available
Concessional Loans, Grants and Technical
Assistances to meet the demand for basic
infrastructural development projects under
GMS and ACMECS frameworks.

SCOPE OF NEDA’S OPERATION

64

Annex 1-3
Introduction of the NEDA Organization

Slide 13

Slide 14(Million Baht)
Amount of loan

Diagram shows “Financial Assistance on Fiscal Year 2006”(By Country)

Country / Project

Loans

GrantsStatusTotal

LAO PDR

2%

51%

47%

Lao P DRC ambodia

Myanmar

1. Road Improvement
Project (R3)

1,385.00-

1,385.00

On going

2.Wattay Internnational
Airport Improvement
Project

224

96

320

Completed

3.Railway Construction
from Friendship Bridge
to Ban Thanaleng

137.9

59.1

197

On going

4. The Construction ofDrainage System andT2 Road Improvement
Project in Vientiane
Capital city

112

48

160

On going

5. Houi Kon –Pak Beng Road
Development Project

588

252

840

On going

2,446.90

455.1

2,902

Total
13

14

Slide 15

Slide 16

(Million Baht)
Amount of loan
Country / Project

Loans

Grants(Million Baht)

StatusAmount of loan

Total

Country / Project

The Kingdom of
Cambodia

Loans

GrantsStatus
Total

Myanmar

6. Koh Kong –Sre Ambel Road
Improvement
Project(Route No. 48)

1,385.00-

1,385.00

7. RoadImprovement
Project (R67)

1,300.00-

1,300.00

Total

2,685.00-

2,685.00

8. The Constructionof Road RouteOn going-

122.61122.61-122.61122.61

5,131.90

577.71

5,709.61

Completed

Tanintharyi –Myawaddy
Total

On going

Grand Total

15

16

Slide 17

Slide 18

LAO PDRON GOING PROJECTS

65

Annex 1-3
Introduction of the NEDA Organization

Slide 20

Slide 19

LAO PDR
Road Improvement Project (R3)
Hou
i

Rail
way
Watt
ay
T2

R3
Kon

Pakse

Slide 21

Amount1,385 MB

Scope of work

Bokeo – Louang Namtha LAO PDR.
(84.77 km.)Cabinet Approved

5 Mar. 02

Signing date

9 Oct. 02

Conditions-interest rate
-payment period (grace period)

1.5% per year
30 years (10 years)

Disbursement (as of Sept. 06)

946.88 MB (68.44%)

Progress (as of Jul. 06)

64.01%

Slide 22

LAO PDR
Railway Construction from Friendship
Bridge to Ban Thanaleng
Amount197 MB

Scope of work

Nongkhai Province - Thanaleng LAO PDR.
(3.5 km.)Cabinet Approved

1 Jul. 03

Signing date

20 Mar. 04

Conditions-interest rate
-payment period (grace period)

1.5% per year
30 years (10 years)

Disbursement (as of Sept. 06)

2.54 MB (1.29%)

Progressn.a.

LAO PDR
Houi Kon – Pak Beng
Road Development Project
AmountSlide 23840 MB

Scope of work

Muang Ngeun - Pak Beng LAO PDR.
(49.22km.)

Cabinet Approved

1 Jul. 03

Signing date

5 Feb. 04

Conditions-interest rate
-payment period (grace period)

1.5% per year
30 years (10 years)

Disbursement-

Progress-

Slide 24
LAO PDR
The Construction of Drainage System
and T2 Road Improvement Project inVientiane Capital city

Amount160 MB

Scope of work

The Construction of Drainage System(2.7 km.) and T2 Road Improvement(6 km.) in Vientiane Capital city LAO PDR.

Cabinet Approved

30 Mar. 04

Signing date

5 Apr. 04

Conditions-interest rate
-payment period (grace period)

1.5% per year
30 years (10 years)

Disbursement-

Progress-

CAMBODIA

66

Annex 1-3
Introduction of the NEDA Organization

Slide 26

Slide 25
The Kingdom of Cambodia
Koh Kong –Sre Ambel
Road Improvement Project(Route No. 48)
AmountThe Kingdom of Cambodia
Road Improvement (R 67)
Anlongweng - Siamreap

867.8 MB

Scope of work

Koh Kong –Sre Ambel Cambodia
1 Jul. 03

Signing date

9 Jul. 03

Conditions-interest rate
-payment period (grace period)

1.5% per year
30 years (10 years)

Disbursement (as of Sept. 06)

515.59 MB (62.04%)

Progress (as of Aug. 06)

61.42%

1,300 MB

Scope of work

Anlongweng - Siamreap

Cabinet Approved

1 Jul. 03

Signing date

10 Aug. 06

Conditions-interest rate
-payment period (grace period)

1.5% per year
30 years (10 years)(131 km.)(151.5 km.)Cabinet Approved

AmountSlide 27

Disbursement-

Progress-

Slide 28

National Road No.67 Construction Project (Anlong Veng-Siem Reap)ศรีสะเกษ

บุรีรัมย

THAI LAND

ชองสะงํา

Completed Projectอันลองเวง
อรัญประเทศ

เสียมเรียบ

CAMBODI A

28

สํ า นั ก ว า ง แกผรมน ท า ง ห ล วง

Slide 29

Slide 30

LAO PDR
Wattay International Airport
Improvement Project
Amount

320 MB

Scope of work

Improvement of Wattay International
AirportCabinet Approved

30 Mar. 04

Signing date

5 Apr. 04

Conditions-interest rate
-payment period (grace period)

1.5% per year
30 years (10 years)

Disbursement319.99 MB (100%)Progress

100%
29

30

67

Annex 1-3
Introduction of the NEDA Organization

Slide 31

Slide 32

31

32

Slide 33

Slide 34

Myanmar
The Construction of Road
Tanintharyi – Myawaddy
Amount122.6 MB

Scope of work

Construction of Road
Tanintharyi – Myawaddy

Cabinet Approved

20 Jan. 04

Signing date-Conditions

Grant

Disbursement

122.39 MB (99.82%)

Progress

100%

Slide 35Thank you68

Annex 1-4
Mr. Matsuzawa’s Handout

Managing the Development Process and Aid

Japan Bank for International Cooperation
Takeo MATSUZAWA
Director General, Dev. Assistant Dept.

Private Sector Perception
How to assure the “Predictability” of the Development Policy
Thailand: Flexible to Private Sector Needs
Malaysia: Firm Continuity
Philippines: Inconsistent by change of the Government
Prioritization on the sector supported by the External Aid
Thailand: Road Network
Malaysia: Power Generation in the peninsular
Philippines: Not in particular
Feedback Mechanism of previous Mid-term (5years) Development Plan
Thailand: Policy Dialogue Mission (Dr.Ookita)

69

Annex 2-1
Mr. Jegathesan’s PPT
Slide 2

Slide 1

Venue: GRIPS Roppongi Camp

Seminar on FDI
promotion in Africancountries

November 9th 2006

Dato’
Dato’ J. Jegathesan
Senior Investment Adviser :Consultant to JICA and theGovernment of Zambia and theformer Deputy Director
General of the Malaysian
Industrial Development
Authority (MIDA)
CEO - J J International
Consultants“ Strategic Action Initiatives
for Economic Development :Strategies for Investment
Promotion in Developing
Nations

Slide 3Slide 4

How is Africa (your country) perceived
by others in respect of Investment
Potential?
What is the world global scenario of
FDI flows on which Africa must depend
upon?
What are the lessons (in summary) that
African Nations can learn from the
Asian Experience?

Slide 5Slide 6
 MORE LESSONS…

ONE Lesson: LEADERSHIP is
the KEY.

 COMPARATIVE ADVANTAGE NOT THE

KEY!
 As CEOs of Companies forge Corporate Visions, Comparative Advantage of Raw Materials

Leaders of Nations must forge National Visions.

(Malaysia, Indonesia, Thailand) OR
Location (Singapore, Hong Kong etc) arenot enough.

 Leader must be sensitive enough to feel thepulse and heartthrob of the nation and forge
Visions that capture the imagination of all
sectors.
 Leader must empower the people with the
Vision so all feel that this is part of their Vision
and all want to be part of the MISSION to realize
VISION.

Key is Competitive Advantage …e.g. Rubber
1970s Malaysia – world largest producer /exporter yet world’s largest exporter of•Rubber shoes – Viking Askim in Scandinavia•Rubber swimming caps -- Skellrup in New Zealand70Annex 2-1
Mr. Jegathesan’s PPT
Slide 8Slide 7

Yet within 1000 miles of NZ and
Scandinavia – not a single rubber tree.

In simple terms:-

1970 – 1980 Malaysia focused not on RBI
but labour and competitive advantage

is conferred by God (i.e. Natural
Resources / Location etc)

After 1980 – Malaysia had bothcomparative and competitive advantage :–Viking Askim & Skellrup moved to
Malaysia

Must be manifested by man tomake full use of Comparative
Advantage.

All developing nations- to succeed- must
focus on competitive advantage

Slide 9Slide 10
 In all Nations – the people, thecitizen, the poor – look hopefully
to a

For

To manifest –need for maximum cooperation,
efficiency and incorruptibility
among certain forces that
initially make up a
– to deliver jobs, opportunities, adecent life (wealth is a bonus).

Slide 11

Slide 121)

Hope

Political Will &Integrity

Private Sector
Dynamism &Integrity

Civil Service Efficiency & Integrity

71

Government leaders / Cabinet /Politicians/ Parliamentarians: – whoare selflessly dedicated to National
development, are incorruptible. Havea vision for the future of their nationand see themselves as “gifted by
God”
God” to serve the Nation and its
people selflessly.
Political Will is the key word.

Annex 2-1
Mr. Jegathesan’s PPT
Slide 13

Slide 142) Civil servants – who understand thatthey are “servants”
servants” of the people andnot “Civil Masters”
Masters”. They should be
dedicated, incorruptible and totallyapolitical, serving the Government in
power and the people without fear or
favour. Civil service efficiency is
the key word.

3) Corporate / Private Sector – who are
dynamic, are aware of the problems of thenations, do not just wait for handouts, who
realize that only if the common people are
happy and prosperous that they too can
succeed. Are also incorruptible and areprepared to work with the Government in
power to achieve National Prosperity.

Slide 15

Slide 16

Private Sector Dynamism is the key word.

Private Sector
Dynamism &Integrity

INVESTMENT PROMOTIONPolitical
Will &
Integrity

THE QUADRANT STRATEGY
Export Orientation
Country
Orientated

Civil Service Efficiency IntegritySpecific Promotion

PROJECTS PROMOTIONImage
BuildingIndustries

Good news is: This may be OK initially.
Bad News is: This will not be enough for Long
Term Prosperity & Economic Stability!
For this we need:

ENVIRONMENT
GeneralEnvironment

Slide 17

Slide 18

Specific Sectors

Another MAJOR Lesson.
Impact of GLOBALISATION.

IMPLEMENTATION

GeneralAspectSpecific

Can African Nations aspire to become CENTERS
FOR BUSINESS EXCELLENCE?

 You either become a CENTRE OF

z Many years ago (1970), Malaysia

EXCELLENCE for Manufacturing &Business…a super efficient “CBE”… “CENTRE
for BUSINESS EXCELLENCE”. Than even if
small you can excel. (e.g. Switzerland, Belgium,
Luxembourg, Hong Kong & Singapore.)

was in the same position in termsof Economic Backwardness.
Malaysia took the Challenge to
become such a CENTER FOR
BUSINESS EXCELLENCE.

OR
 You provide a Big Market by yourself OR by

Regional Economic Groupings & a relatively
efficient Business/Investment Environment e.g.
Japan, S.Korea, China, Malaysia, Thailand,
Indonesia and now ASEAN etc.

I PRESENT HERE NOW A GLIMPSE OF THE
MALAYSIAN STORY.

72

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Mr. Jegathesan’s PPT
Slide 20

Slide 19

…in Summary:z Rampant Unemploymentz Independence in 1957 from British Colonial

z Identification of Race with Economic Function.

Rule.
z Multi racial/ Religious Nation.
z Malays ( Muslims 50%), Chinese ( Christians,
Buddhists etc 40% ) Indians & others (Hindus,
Buddhists etc 10%)z By 1965 Worlds largest exporter of Rubber,
Hardwood Timber, Palm Oil, Tin, Pepper.
z ( Rubber from Brazil. Oil Palm from Africa)
z 1969…
1969…May 13th…RACE RIOTS devastatedthe nation.

z Imbalance in Wealth Distribution.
z FOREIGNERS : owned 60% of Corporate wealth.
z Malaysian CHINESE: 40% Pop…
Pop….35%z Mal. INDIANS & OTHERS: 10%....3%z MALAYS: 50%...2% OF Corporate wealth.

THE Government LAUNCHED A 20 YEARSOVERALL PERSPECTIVE PLAN (OPP) (1970
TO 1990) & NEW ECONOMIC POLICY (NEP)

Slide 22

Slide 21
Key Objectives of OPP & NEP:
*Create Jobs & Wealth* Redistribute Income and opportunities
within context of a rapidly Expanding Economy.

► Certain elemental laws of nature

guide natural forces on this earth
and once Man recognizes theselaws, he can tap these forces forbenefit…
benefit…
► Likewise Malaysia recognized thethat certain elemental laws equally
guide forces of Economics.
► We Recognized these laws andused them for our advantage.

RESULTS?
When we started our Big Push in 1970 Malaysia
was a Raw Material Producer & did not have even
ONE export Oriented Manufacturing Company.
Company.
But 10 years later…
later…in 1980 Malaysia had become:
The Worlds Largest Producer of Electronic
Semiconductors ( employing more than 150,000
people) &The 3rd Largest country in the world exporting
Room Air conditioners.

Slide 23

Slide 24

•Centrifugal(Push)
Factor

The PULL Factors can be put into a•Centripetal(Pull)
FactorStrategic Action Initiative Formula
Or

PUSH FACTOR
At times in world economic history there are certain forces ‘pushingcompanies’ in capital and technology exporting nations to invest
abroad – i.e become F.D.I.

Negative Forces

Positive Forces•Increasing Costs of producing
locally•Increasing costs of electricity,water etc.
•Increasing costs ofenvironmental protection•Labour shortage and cost

•Expansion to new markets•Company’s drive to diversify•Company wants to be close to raw
material source•Company wants to be closer to theoverseas market or supplier•Drive to take advantage of Regional
markets e.g. ASEAN•Company divides the world into
strategic geographic areas

FAR EASTERN EXPERIENCEFORMULA FOR SUCCESS
IN
Economic Development

E + C4 + O = P
Profits for Enterprises
Prosperity for the Nation73

Not Problems

Annex 2-1
Mr. Jegathesan’s PPT
Slide 26

Slide 25

E + C4 + O = P

E + C4 + O = P
Environment – THE 10 COMMANDMENTS
Or Check Points that every investor MUST observe

Environment – THE 10 COMMANDMENTS
Or Check Points that every investor MUST observe
5. Infrastructure- land, Electricity, water etc..;
Availability, Costs, Quality, etc,.
6. Labour (Trainability, Education, Work Ethics,
Harmony…all these spell one word
PRODUCTIVITY)
7. Banking & Finance
8. Government Bureaucracy – friend & ally or
hostile obstacles
9. Local Business Environment

1. Political Stability
2. Economic Strength / Fundamentals
3. Attitude of Welcome – from highest Minister tomost junior civil servant and public
4. Government policiesa.
Equityb.
Employment of Expatriatesc.
Exchange controld.
Rule of Law (Ownership of Assets etc)

10. Quality of Life

Slide 28

Slide 27

In the 10 Checkpoints–

E + C4 + O = P

No Mention of Incentives
But are the
Icing on the Cake!!

•Cost of Doing Business•Convenience provided at all stages•Capability of the Infrastructure andGovernment Machinery•Concessions (carrots) – Incentives, etc,.

The 10 Checkpoints constitute theSolid Fruit Cake i.e. the company

must make profits.

In a bakery– which would most people choose?
The Cake without icing or the Cake with the icing…

Slide 29

Slide 30
HOT AIR BALLOON Theory for achieving
TARGETS / OBJECTIVES

E + C4 + O = P

METHODOLOGY

Opportunities – What opportunities does thecountry offer? Mining, Trading, Manufacturing,
agriculture, etc,. Is this available in
Government or private sector publications? In
short how will the investor know theopportunities for import substitution or Exportorientation that the country offers.

Other e.g.
Manpower

Destination/
Targets/
Objectives

Incentives
INPUTS

Difficulties

Motivation
Lack of Understanding

74

STRATEGYCONSTRAINTS

Policies
Obstacles
Difficulties(Red Tape)
PoliciesAnnex 2-1
Mr. Jegathesan’s PPT
Slide 32

Slide 31
THE DEVELOPING COUNTRY SYNDROM
Are you giving your investors a fighting chance?!!

► Need for a strategic Plan of

Action…based on a VISION of what
you want your country to be.
► This Vision must come from Top
leaders and the Civil Service andPrivate Sector (Business & Workers)
must join forces to realize Vision.
► Not emotional nationalism but
Strategic Action Initiatives designed
for Short, Medium and Long Term
Results.

Slide 34

Slide 33

RECOGNIZE THAT CURRENTLY
3 Great Waves drive Economies of
Nations
1) Why must foreigners come and make profits inmy country?
2) Local people must own everything , Banks,
Insurance etc. let foreigners take minority
share?
The lesson Malaysia learnt was this:Do we want to own 100% of 100OR
40% of 1000.
The key is a dynamically expanding economy…
economy…
So that Wealth & not Poverty is distributed.

1St Wave. – Agriculture – slow moving- longterm - continue this initiative!
KEY: Cost efficiency & Productivity.
2nd Wave – Industrial Development: must
establish competitive advantage.
Who are your competitors?

3rd Wave – Service / Knowledge based
drive….! Knowledge workers are driving
World Economy.

Slide 35

Slide 36TECHNOLOGIES FOR SOUTH NATIONS FORECONOMIC SUCCESS

Everybody is looking at ICT…BUT…

ONE KEY ELEMENT IN THE
STRATEGIC ACTION INITIATIVE(S.A.I.) FORMULA IS…
IS….

In looking at ICT (Information &Communication Technology) –African Nations should have a multi pronged
strategy!

 MCT – Manufacturing & Creative Technology
 ACT – Agriculture & Commodity Technology
 BCT – Building & Construction Technology
 FCT – Finance & Currency Technology

The role of the National
Investment Promotion Agencies(IPA)

ALL these Technologies will lead to
EMPOWERMENT of South Nations!

This is what Asia did!

75

Annex 2-1
Mr. Jegathesan’s PPT
Slide 38

Slide 37
And the Archer is the

NATION…
Private Sector Leader of the NATION…
The Cabinet

Economic
Success

Investment
Promotion
Agencies (IPA)
Policiesand Laws

All Government
Departments involved
in “Economic Development

The IPA is only the arrowhead – by itself itcannot hit any target …

Slide 40

Slide 39

What can AFRICAN Nations learn
from the Asian experience?
z1) POLITICAL WILL: Briefing Sessions can be held
for all Members of Parliament/Ministers(including Opposition members), on subjects
relating to:
STRATEGIC ACTION INITIATIVES FOR ECONOMIC
DEVELOPMENT AND THE ASIAN EXPERIENCE(one example: Malaysia).

Let us examine a possible Action
Agenda through the spectrum ofthe:(Malaysia, a multi racial Islamic nation, whichbecame independent in 1957…about the same time
as many African Nations, which in 1969, after the
May 13th Race riots was written of as another “basketcase” economy & what it is today, would make anideal case study.)

Slide 41

Slide 42

The objective of this ONE FULL DAY
SESSION WITH Q&A, will be :The session will help in some degree
to make all Members of Parliamentand Political Leaders realize:

To help leaders who are making
decisions about the future of
their nation in a rapidly changing
and competitive world tounderstand the Economic
Process that drives Nation
Building and the challenges of
Globalization.

# The critical role that FDIs can play in the processof Jobs and Wealth creation.
# That PROFITS should not be a bad word.
# What must be done to attract the FDI that can help
achieve economic success?
# And that every Ministry, every Dept. is part of theeconomic process of nation building.

76

Annex 2-1
Mr. Jegathesan’s PPT
Slide 43

Slide 442) The 2nd side of the Triangle of Hope relates to

In short whereas the MPs session will focus on WHAT
should be done to achieve Economic Success, the Civil
Servants session will address notjust the WHAT but HOW it can be done.

“Civil Service efficiency and integrity”!
 For Civil Servants, which will include all The lessons from Asia regarding streamlining &officers in the Investment Promotion Centerand two or three TOP OFFICIALS from every
Govt. Dept. involved in the Economic Process( Customs, Immigration, Road Transport,
Central Bank, Ministry of Finance etc)…a full 2½ to 3 day Capacity Building/Training session
can be held.

capacity building can be useful.
 The setting up of INTEGRATED APPROVAL SYSTEMS

for every Govt. Dept., the streamlining of the approvalmechanism at every level of the APROVAL PROCESS
from National/Central Govt. to Municipality/City levels
will be critical.
 The process must move from KNOW WHO to get anapproval, to KNOW HOW and the strength of the
project itself.
 There must evolve a Systems Approach in Govt. andone way would be to embrace “e governance” as aconcept to drive efficiency and to reduce Red Tape andcorruption.

 The title of the topic can be same as that for

the MPs, but this Training session will go into
depth on issues of coordination, streamlining
etc.

Slide 45

Slide 46

Integrated Approval Systems

9) Which Government Departments do you think you are
related to1) Who are you serving?

(a) Directly

2) Why?

(b) Indirectly

10) Do you know that a chain is only as strong as its‘weakest’ link?

3) Is the service you provide most efficient?
4) How to improve further?

11) In the chain of National Economic Development is your
Department – a strong or weak link?

5) Is your internal system fully integrated – (How can further
integration be achieved).

12) How to strengthen that link?

7) Do you think that the service your Department provides
has a role in Jobs & Wealth creation and Poverty
Eradication?

13) Do you know that though the chain is as strong as its‘weakest’ link – that the Department Head is the link maker,
the Minister & the Civil Service Head of Ministry make part ofthe chain and that the Head of State is the ultimate Chain
maker?

8) What is it’s role and how can maximum efficiency &productivity be achieved?

14) How can you help the Minister and Head of State to create
an unbreakable chain?

Slide 47

Slide 48

(3) The 3rd Force in the Triangle of Hope is
PRIVATE SECTOR DYNAMISM and
INTEGRITY:-In respect of the Quadrant Strategy that encompasses
INVESTMENT ENVIRONMENT, PROJECTS,PROMOTION AND IMPLEMENTATION interested African
Governments can be helped to:6) Are you integrated with other Department?

 Here it is proposed that a ONE Day briefing

session be held for all the Captains of Industry
on the similar basis as that of the MPs.
 The Topic title can remain: STRATEGIC ACTION INITIATIVES FORECONOMIC DEVELOPMENT AND THE ASIAN
EXPERIENCE In addition the presentation could include
issues relating to GLOBALIZATION, and somesuggestions as to what the private sector can
do to be prepared for these challenges.

 1) Examine & assisted as to how the Investment

Environment can be improved to attract FDI andto stimulate domestic investments.
 2) Identify strategic Industries/Projects that canbe promoted to maximize the competitive
advantage that a country has to offer.
 3) Launch Investment Promotion strategies/
programmes in target Asian CAPTEN Nations.
 4) Ensure that that proper mechanisms are inplace to ensure speedy Implementation of
approved projects.

77Annex 2-1
Mr. Jegathesan’s PPT
Slide 50

Slide 49
In addition to the above in a programmecalled “Agenda of Action”, the following
should be undertaken:b) Offer to Asian businessmen,
opportunities to participate in the1) To create a “FAMILIARITY THAT WILL BREEDCONFIDENCE” among Asian Businessmen,interested African Governments should
consider the following actions:“Privatization and Development
Projects (PDPs) the country has tooffer.”a) Organize with African private sector, buying andselling missions to target Asian nations.

To implement this, the relevant
African Governments should put
together a package of PDPs andorganize missions to target Asian
nations.

This will create direct linkages between Asianand African Businessmen, reduce the role ofthe middle man from other nations and reducethe cost of Asian products in Africa.
Such increased business linkages will create
the confidence for longer term Asianinvestments.

Slide 51

Slide 52
To ensure that the existing domestic & foreign private sector areare
an ally to Government’
Government’s Promotion efforts, African Govts. can behelped to set up “PublicPublic-Private Sector Presidential Committees onc) Promote Asian Financial
Institutions (Banks & Insurance)
to set up operations, for these
are the most powerful conduits
for flow of Investment funds.

Investments.” ( PPSPPS-PCI)OBJECTIVE: To create a happy , supportive, domestic Private
Sector Group.
1) The President with Key Economic Ministers and Captains
of Industry should meet, initially at least 2 or 3 times a
year, and later as issues are addressed and solved thesecan be reduced to an Annual basis.
2) The issue of meetings is not just to call a meeting andhaving it end as a “complaints session”
session”. The sessions
should have considerable pre planning and preparations
so that the Presidential meeting becomes highly
productive.

The Asian Experience as to how these PPS -PCIs can be set
up to become powerful tools for Investments, can be shared.

Slide 54

Slide 53
Key Question: Do African Govts.
Govts. feel that theywant to proceed on sustained, well planned
strategies?

(The TRIDENT STRATEGY)z Despite millions of dollars being poured into

Also are International & National Donor
Agencies prepared for such strategic steps
that are sustained and results not as“Reports on a dust covered shelfves”
shelfves”, but“Jobs and Wealth”
Wealth” on the Ground.
I have worked with many International
Agencies since I retired from MIDA in 1999.
All are sincere, but how many have gone
beyond “Reports that end up on shelves”
shelves”?

Africa, there is not one Economic Model thatcan be taken as a Success Story that others
can emulate, unlike the multiple successstories in Asia, from Japan to Singapore,from Taiwan and South Korea to Thailand
and Malaysia.

78

Annex 2-1
Mr. Jegathesan’s PPT
Slide 56

Slide 55

The proposal was that 3 “Test Bed Models”
Models” beselected:z I had suggested to many Internationalz (a) A Land Locked Nation (e.g. Uganda,

Agencies, that whereas all nations be
helped, 3 TESTBED Nations be
selected to launch the full 3 to 5 year
“S.A.I. for Economic Development”
Development”
programme and that we work withthese 3 Nations until we see Jobs andWealth on the ground.

Zimbabwe, Malawi, Rwanda, Zambia
etc)
z (b) A Nation with Coastline and a
relatively large population.
z ( c) An Island Economy.

I am proud to say that the Japanese
Govt. through JICA accepted thischallenge

Slide 57

Slide 58 3) Arrangements were made for the JICA

The 1st Test Bed Nation is Zambia:
Land Locked.

consultant to brief Parliament and this briefing
was well received by all parliamentarians.
 4) The President has shown personal interestand he and his cabinet has been briefed on 3
occassions on the progress of the TOH
agenda.

 1) An MOU was signed between JICA and theGovt. of Zambia in March 2005 to launch what
is now known in Zambia as the “Triangle ofHope” programme.

 2) The Political Will has been tremendous:
The President has formed a Presidential
Steering Committee chaired by the Deputy
Secretary to the Cabinet and where the JICA
Resident Representative is one of the 2 Deputy
Chairmen.

5) In keeping with the TOH formula theGovt. arranged a 3 day Briefing cum
Workshop session on the TOH programme
for Senior Civil Servants and also asession with the Private sector.

Slide 59

Slide 60 6) After fulfilling the obligations of the TOH the 9) The GOZ, with JICAs assistance where

GoZ proceeded to fulfill the requirments of the
Quadrant Strategy viz: Environment, Projects.
Promotion & Implementation.
 7) 12 Govt. Private sector Task Forces were
set up to look at issues relating to the
Physical and Administrative Infrastructure,(Environment & Implementation), and Sectorsthat will have Competitive Advantage(Projects)

necessary, is now involved in the
Implementation of all Recommendations
approved by Cabinet. A monitoringmechanism has been established and JICA is
helping in this process.
 10) Having fulfilled to an extent the
expectations of the Quadrant strategy we arenow entering the Promotion phase.
11) Project Profiles are being drawn up, initially
focusing on existing companies that wish to expand,diversify or set up new projects. An Investment Booklet
designed with the Potential Investor in mind is being
prepared.

8) The Task Forces were given a TOR and were briefed

on expectations and given 3 months to present theirreports.
This they did very effectively. All TF recommendations
were submitted to Cabinet and have been approved.

79Annex 2-1
Mr. Jegathesan’s PPT
Slide 62

Slide 61 12) A very focused Investment Seminar is beingorganized in Malaysia towards the end of Nov. 2006
and in March 2007 we are planning for a Malaysian
Investment Mission to Zambia.

THE END …..

 13) Since this is a Asia – Zambia South South

Initiative, the promotion initiatives to other
Nations in Asia will commence in the 2nd
quarter of 2007.
14) It is the expectation, if all goes as planned
and all recommendations of the TFs are fully
implemented that Zambia should experience
increased FDIs, increased JVs with Foreign
Investors and increased Jobs and Wealth for thepeople of Zambia, in the next 2 to 3 years.

Slide 63

@ Copyright
JJ International Consultants
Dato’
Dato’ J. Jegathesan
No 24, Jalan Abdullah,
off Jalan Bungsar,
Bungsar,
59000, Kuala Lumpur
Malaysia.
E-mail:mail:- jjegaic@yahoo.com
Website:Website:- www.jjegaic.com

80Annex 2-2
Mr. Yamamoto’s Handout

GRIPS DEVELOPENT FORUM SEMINAR~East Asian Development Experience and the Role of Emerging Donor
Comment by Aiichiro Yamamoto
Senior Assistant to Director-General,
Africa Department, JICA

1. Asia-Africa Cooperation-Replication of Asian success model to Africa?
-Asia- Africa Knowledge Co-creation Programme

2. Trade and Investment in the Current Globalised Economy-Changing world economic situations and the speed of globalisation.
-FDI is not the only solution across Africa.

3. African Growth Challenge-Exogenous development v.s. endogenous development-“One Village One Product” movement in Malawi.

Success will not be brought in from outside. It will come from inside.

81