Mr. Tatsuya Yanagi presentation on OVOP - Yogyakarta Workshop 2014

Sharing experiences of OVOP projects

Tatsuya YANAGI

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Note

The following are my personal opinions, not representing public statement of JICA on “OVOP”.

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　０． Purposes of my presentation　１． What is OVOP ?... just in case　２． How is OVOP projects ?

- introducing a project in Malawi- contents, achievements and challenges

　３． Way forward

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Outline

0. Purposes of my presentation- JICA supports implementing OVOP projects in 20

countries referring to OVOP initiative for promoting and developing regional economic development.

- I saw several OVOP projects on sites. - The achievements and challenges which I saw

could be beneficial for us all to consider the way forward.

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OVOP in JAPAN

- Local communities and people in Oyama village, Yufuin village etc. located at Oita prefecture

1. What is OVOP ?… just in case

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OVOP in JAPAN

- Local communities and people in Oyama village, Yufuin village etc. located at Oita prefecture

・ Oyama village ： low income farmers at mountainous areas

⇒ self-help effort by local community

“by planting plum and chestnut tree, let us go to Hawaii islands in U.S.A.”

increase of income, livelihood culturally wealthy, establish identity 　


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OVOP in JAPAN・ Yufuin village ： little tourists, without large hotels

and other entertaining facilities

⇒ self-help effort by local and tourism related people for promoting existing resources and exchanging culture, village development through utilizing scenery with paddy rice field, differentiations of quality of products.

- There are positive comments on OVOP as a movement. And at the same time, there are views that OVOP as a theory for economic development has not been confirmed and evaluated.

1. What is OVOP ?… just in case OVOP initiative is a long-term movement.

Based on 3 principles, local communities and related players keep engaging.

Local, yet globalEnsuring utilization of local resources and

adding values, products could be accepted nationally and globally as results. Products include tourism resources which contain cultural and traditional art.

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1. What is OVOP ?… just in case OVOP initiative is a long-term movement.

Based on 3 principles, local communities and related players keep engaging.

Self reliance and creativity (value addition)

It is local people who choose and select things as OVOP products. It is important for local people to think how to add values. Outsiders such as administrative bodies and others can support them based on the needs shown by local people such as providing technical and marketing advices and opportunities.

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1. What is OVOP ?… just in case OVOP initiative is a long-term movement. Based

on 3 principles, local communities and related players keep engaging.

Human resource developmentHowever there is a product with great amount of sales now, the trend could be changed and there will be competitors. It is important not only focusing on developing products, but trying to raise rural leaders who has views on how to activate rural economy, how to contribute to the societies, through those developing processes.

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1. What is OVOP ?… just in case OVOP in International Cooperation

- 1980’s: Local diplomacy by Oita prefecture- 2000’s: interests increased by foreign countries- 2005: OVOP support was mentioned at WTO Hong

Kong meeting as “Development Initiative”, then JICA, JETRO started supporting

※JETRO: OVOP markets at International airports, JETRO demonstration program for trade

development etc.- 2008: GOJ appealed supports for OVOP at TICAD IV- Yokohama plan for action mentions that the

activities in 12 countries on OVOP to be implemented.

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2. How is OVOP projects ?

- introducing a project in Malawi

One Village One Product Movement in Africa Towards Self Reliance and Economic Development of African Rural Communities

https://jica-net-library.jica.go.jp/jica-net/user/lib/makeHisRec.php?login=1&id=226&nm=112072544943133087099450822849360325410.asx&hd=jn226

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2. How is OVOP projects ?

Standard Contents of OVOP projectsProject purposes and objectivesAt disadvantageous areas, micro and small businesses utilizing local resources and local human resources are carried out. ⇒ Economic Development

“Through implementation of project, rules/ regulation/ system/ ability for rural MSMEs promotion by administrative bodies could be developed and upgraded.” ⇒ Capacity Development

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2. How is OVOP projects ? ... introduction

Standard Contents of OVOP projects

3 steps

① Consideration on how to promote OVOP

② System review and capacity building through implementing pilot projects to business groups.

③Comprehending results, achievements, lessons learned through pilot projects and sharing those with others to promote OVOP

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2. How is OVOP projects ? ... introductionStandard Contents of OVOP projects

① Consideration on how to promote OVOP

- Establishing supporting system

- Strengthening supporting ability, networking BDS providers etc. (both Technical/Financial)

- Developing operational guideline on OVOP support

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- Acquiring understandings through explanations to the BDS receivers

- Supporting developing business plans and selection of companies/groups to support


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- Providing support to the selected companies/groups and monitoring

> Training and Guidance for Book keeping, Accounting, Marketing, Production, Q/C etc.

> Supporting Marketing such as providing opportunities for joining exhibitions, developing antenna shops etc.

> Providing information of Financial support, loans, subsidies

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③Comprehending results, achievements, lessons learned through pilot projects and sharing those with others to promote OVOP

> Organizing seminars and promoting OVOP initiative to other areas

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Ex. System and Mechanism （ OVOP cycle ）

　　

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Central Level:

OVOP

Secretariat

Regional Level:

Local Government

(Province/State/Cit

y/District/Village

etc.)

Community Level:

Local

MSMEs/Producers

/Cooperatives etc.

2nd screening

+ follow up to the

not-selected groups

1st screening

+ follow up to the

not-selected groups

Services provided

1. Technical support

2. Business Management support

3. Financial support

4. Others

① ②

③

④

⑤ ⑥

⑦ ⑧

⑨Monitoring

Evaluation

Improvement

① Workshop on OVOP and service introduction from Central Level to Regional Level

② Workshop on OVOP and service introduction from Regional Level to Community Level

③ Submission of application for joining in OVOP from Community Level to Regional Level

④ First Screening of applications

⑤ Transferring of screened applications from Regional Level to Central Level

⑥ Second Screening of applications

⑦ Coordination with BDS/Financial support providers

⑧ Service and Support provided by BDS/Financial support providers

⑨ Monitor/Evaluate/Improve the system and mechanism

Counterpart ministries/agencies

Since the objectives are to promote businesses in rural areas and villages, counterpart ministries/agencies are ministries of Industry, Agriculture, Rural Development etc. depending upon the countries.

In some cases, counterpart ministries/agencies are changed during the course of the project implementation.

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Targeted areas

Rural, mainly disadvantageous areas.

Step by step (Piloting at a few states/provinces, then extending nationwide)

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Targeted groups

Legally registered groups such as cooperatives, groups and some informal groups.

Many of them have little or no experiences dealing with business.

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Main product and market

Using local resource, produce products and sell those locally. Products contain tourism products (services). Mainly agriculture/animal husbandry/forestry/fishery products.Though mainly the targeted market is local or domestic cities, some are challenging to penetrate into the foreign market.

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Targeted countries and ways of cooperation

There are many projects in Africa, affected by TICAD initiative.

Similar number of projects took place in Latin America and Asia, while less projects implemented in the Middle East and Europe.

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Significance of OVOP projects

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Where? By Whom? Who? What?

MSMEs Urban Admi n. i n charge ofI ndustry

Enterpri ses(MSMEs) Producti on/ Servi ces

OVOP Rural (Di sadvantageous)Admi n. i n charge ofI ndustry/ Agri cul ture/ Rural Devel opment

Entrepreneurs such asFarmers

Agri cul ture/ Ani malHusbandry/ Forestry/ Fi shery, Handi craf t,Touri sm

2. How is OVOP projects ? ...　　　　　　　　　　　　　　 -achievements and challenges-

Current situation of supported businesses: economic impact

Products developed through OVOP projects exported to JapanKyrgyz

http://www.muji.net/lab/found/kyrgyz/

https://www.facebook.com/GalleryCafeRosily?ref=stream&hc_location=stream&filter=3#!/photo.php?fbid=496575787021688&set=a.496575727021694.118375.215790985100171&type=1&theater

https://www.facebook.com/GalleryCafeRosily#!/photo.php?fbid=504643162881617&set=a.504643122881621.120347.215790985100171&type=1&theater

Kenya

http://www.muji.net/lab/found/kenya/

Malawi

http://www.malawi.jp/http://www.cocorocosme.comhttp://www.hukka-cosmetics.com/

Senegal

http://www.fancl.co.jp/Items/Detail?category=02&item_code=4050-03

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Example of business ： Kyrgyz OVOP （ felt products ）

The products [felt cases of mobile phones] under the packaging in Kyrgyz. In 2012 it was done in Japan, then changed in Kyrgyz in 2013.

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Mai n Product : Phone case, Busi ness card hol der etc.

Procurement :OVOP uni on purchases wool s f or al l the groupsuti l i zi ng profi t carri ed over f or the smoothconti nuati on of producti on.

Producti on :

Product i s devel oped by OVOP group members wi ththei r hand-made. Experts gave gui dance fori mprovement of producti on. Local desi gner i s f oundand contracted.

Market :

Uti l i zi ng antenna shop at the capi tal ci ty f orsel l i ng thei r products to forei gn touri sts. Si nce2011, they started exporti ng thei r products toJ apan.

Sal es/ Profi t/ Sol d products :

[to Domesti c market]30, 000USD / 3, 000USD / no fi gure[to Forei gn market]70, 000USD / 20, 000USD / 10, 000pi eces

Groups :There are 30 groups deal i ng wi th devel opi ng fel tproducts, wi th 250 members. 90% of members arewomen, no experi ences of busi ness.


Current situation of supported businesses: economic impact

Some OVOP groups started enhancing their markets through joining in the opportunities such as bazaar for tourist, local and international exhibitions etc.

Local market ⇒ City market ⇒ Capital market ⇒ Intl. market

☆Providing opportunities could be one of the key functions.

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Current situation of supported businesses: economic impactSizes of businesses (Sales amount)-In some cases, OVOP groups have other main jobs, such as farmers. OVOP activities contribute as additional income generation.-If OVOP groups are consisted with MSMEs who have been engaging their businesses more than years, there may be potentials to enhance their capacities and sales as a result. -If you consider further regional economic impact, considerations toward networking and clustering through encouraging those MSMEs in the certain areas to develop their unions can be an option.

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Current situation of supported businesses: economic impactProfit

-Growing OVOP groups generate their profit amounting 1-3 hundred USD/year/person.

* Proper book keeping by OVOP groups and close monitoring by project implementer can provide precise figures and situation.

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Business situation: Social Impact

Upgrading Quality of Life

-Profit leads increase of disposable income, then it is utilized for upgrading the quality of life.

Upgrading Self Reliance and Social Position

-Some members consider that they feel self reliance and it changed their social position.

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Business situation: Social Impact

Ex.Upgrading quality of life Renewing roof and walls of their houses Purchasing room heater Paying educational fees for their children Purchasing mobile phones Purchasing livestock

Self reliance and Upgrading social position Uniting group in the community and working together gives self reliance. Success of business improves the position of women in the household and community. For further success of business, their husbands start helping housework.

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Business situation: Social ImpactUpgrading Self Reliance and Social Position-Some members consider that they feel self reliance and it changed their social position.Ex.Upgrading quality of lifeRenewing roof and walls of their housesPurchasing room heaterPaying educational fees for their childrenPurchasing mobile phonesPurchasing livestockSelf reliance and Upgrading social positionUniting group in the community and working together gives self reliance.Success of business improves the position of women in the household and community.For further success of business, their husbands start helping housework.

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Challenges of businesses-Through projects, there are successful groups or products, yet many are still facing problems on management / production etc.

1. Business ManagementBook keeping and Accounting : It can help better planned procurement, production, sales. Also it is needed for better monitoring and advices.Marketing : Many producers have no experience to come to the capital city/abroad. Opportunities facing with customers can help producers to know the needs at the market.

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Challenges of businesses- Through projects, there are successful groups or

products, yet many are still facing problems of management/production etc.

2. Production :Quality : To get proper licensing and inspection of

Foods/Beverages, Medicines, Cosmetics etc. can help MSMEs to penetrate into other market.

Complying with the rules and regulation by MSMEs, and appropriate enforcement of those by authorities are needed.

Quantity : Dealing with market in capital city or foreign market, it is sometimes requested to have a certain bulk of products or regular dealings throughout a year. Supporting developing union can be a solution in such a case.

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Sustainability of Policy/System/Mechanism

Status of OVOP under the policy level- It can help the sustainability of OVOP activities if OVOP

is mentioned in their national development policy or the like.

- Some countries shows strong commitments by the president and/or ministers through showing their strong leadership and domestic appealing.

- Yet, policies can not guarantee the sustainability of activities and profit generation on the ground. When power shift occurred, policies can be changed, and sustainability can not be sustained, organization dealing with OVOP can be changed. Depending upon your necessity, further consideration would be needed.

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２． Current situation of OVOP projects　　　　　　　　　　　　　　 -achievements and challenges-

- In some countries, there are sometimes confusion on prioritizing (1) Economic Development, (2)Poverty Reduction, (3)Social Development.

⇒ This could be a cause of changing ministries in charge.

- Setting up clear policy objective can help you achieving goals through implementing OVOP.

- It is recommendable to confirm the policy to be achieved through implementing OVOP, and align OVOP activities with it properly. Otherwise, the activities on the ground may not achieve the policy objectives, then not stabilized and sustained.

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Sustainability and Development of the Systems, Rules and Regulations

①Sustaining and Developing the number of targeted MSMEs and/or OVOP groups and activities

- Through implementing projects, the movement of OVOP seems becoming popular.

- Activities to support MSMEs and/or OVOP groups are needed to be well maintained.

- To make it happen, close monitoring and evaluation are required.

- Decreasing the level of political commitment, budgeting, manpower, abilities could be the threat.

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②Sustainability of system and mechanism

If providing technical and financial support are not originally the mandate of the project implementation body, it makes difficult to keep sustainability of supporting activities. It is recommendable to develop the system appropriate for the actor and situation.

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３． The Way Forward The Way forward

While many of developing countries achieve high development, the gap of wealth among the players could be widened and the government would be required to fill the gap. The needs are high to support rural industries.

Rural (micro) business promotion should be implemented aligned with the policy to be achieved and the system and mechanism which are available.

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３． The Way Forward The Way forward

Targeting, scoping the recipient of business development services can be considered with the following criteria. Business development of local citizen, production

group (local entrepreneurship) Promotion of Local MSMEs （ support for enhancing

local business ） Promotion of Regional Industrialization （ local

business into regional integration and clustering ）

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３． The Way Forward

Type 1:Business development of local production group and community (local entrepreneurship)Supporting basic business activities in rural areas where governmental services are not reached, and the maturity of businesses is low, and encouraging utilization of local resources.Referring OVOP movement, provide basic knowledge and experiences necessary for producers to run their businesses especially at the entry point, such as book keeping, standard sanitary requirement etc. And develop a system and mechanism to support promoting local products.

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Type 1:Business development of local production group and community (local entrepreneurship)

There could be 2 types under this criteria. (1)aiming activation of local business activities which contribute to income generation of individuals. (2)aiming promotion of regional industrialization in the future.

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Type2: Promotion of Local MSMEs （ support for enhancing local business ）

Making use of locality and resources, government (and others) provide resources to support and develop local MSMEs.

Not only providing basic business knowledge and management techniques, developing the system and mechanism to support the local production, providing support on Q/C, productivity improvement, marketing etc. are needed so that MSMEs can add values and become competitive to some extent.

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３． The Way ForwardType 3: Promotion of Regional Industrialization（ local business into regional integration and clustering ）

To strengthen and develop regional industries, providing certain financial and technical input such as governmental loans and comprehensive BDS, the regional industry can be well supported and increase the possibility to be developed.

There is a possibility that the result or achievement achieved and obtained through the project being shared with other regions. Focusing not on individuals but rather regional compilation of industries, supply chain, clustering, etc.

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NoteNot every OVOP group nor MSMEs can survive.

In Japan, the sustainability of SME businesses more than 3 years could be around 30%.

Arranging social safety net could be considered as one of other supporting tools, though it could be handled by other ministries.

３． The Way Forward Points to keep in mind to implement the project

Clear objectives and approaches aligned with policies

- Selection of approaches that fit to the policies, targeted business entities, governmental ability

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Balancing (1)developing products and (2)developing OVOP system and mechanismTo check the achievement, (1) is important, while to evaluate the sustainability, (2) should be established and keep working.-Well balanced support and progress of activities are needed to make it effective and sustainable. The System and mechanism are selected while surveying roles and practical ability at rural areas.

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Strengthening the capabilities to cope with both supply and demand sides-It is recommendable focusing on not only “developing what you can develop locally” but also “developing what are demanded at the market (customer)”.

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Strengthening the capabilities to cope with both supply and demand sides-The services for companies/OVOP groups are to be developed and provided within the available resources(budget/human resource etc.) under your authorities in a sustainable manner. -Developing the capacities of companies/OVOP groups on book keeping and accounting have great importance for proper monitoring of the progresses and results.

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Grasping and Measuring the Result- To make proper Monitoring and Evaluation of

the result and impact of the project and policy, implementing baseline/endline surveys and compiling data are essential.

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３． The Way Forward Points to keep in mind to implement the

projectPenetrating Developed Market- There are potentials at developed market on the

products produced at developing countries to cope with the demand at their market where requesting diversification and the varieties of products, social products etc.

- Through contacting and dealing with companies in developed market, there are opportunities for the producers to learn how to improve the quality and quantities of their services/products.

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Thank you !

Hoping your success !

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Mr. Tatsuya Yanagi presentation on OVOP - Yogyakarta Workshop 2014

Business

Transcript of Mr. Tatsuya Yanagi presentation on OVOP - Yogyakarta Workshop 2014