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Drafting Industrial Master Plans and Action Plans


... or explanatory (background, int l & domestic reviews, SWOT, orientation ... Thailand Automotive M/P 2007-2011 Vision 2011 4 Objectives 5 ... – PowerPoint PPT presentation

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Title: Drafting Industrial Master Plans and Action Plans

Drafting Industrial Master Plans and Action Plans
Policy Formulation in Developing Countries GRIPS
Development Forum
Goal Orientation and DCD
  • In East Asia, industrial policy is often
    characterized by goal orientation and policy
    hierarchy Vision - Strategy - Action plan (other
    terms may be used).
  • Dynamic Capacity Developmentdomestic capability
    is built up for the purpose of achieving concrete
    real-sector objectives rather than improving
    governance or removing binding constraints

Description Examples
Vision -Slogan -Short and Vague -Vision 2020 (Malaysia)-Detroit of Asia (Thailand)-Industrialization Modernization by 2020 (Vietnam)
Strategy -Document specifying goals, roadmaps, policy measures -Scope detail depend on each case -Industrial Master Plan (Malaysia)-Automotive Master Plan Main Text (Thailand)-e-Japan Strategy -Industrial Cluster Plan (Japan)
Action plan -Document, action matrix, formal/informal mechanism, or ongoing process -Automotive Master Plan Action Tables (Thailand)-Vietnam-Japan Joint Initiative-Triangle of Hope Project (Zambia)
Review Adjustment -Numerical monitoring, document report, organizational review, or no formal review -Interim final review by joint committee (VJJI, ToH Zambia)-Industry specific committees (Thailand)
Importance, role, orientation, and positioning of
industry in national development
Long- and medium-term numerical and/or
qualitative targets
Current status, potentials and obstacles of the
domestic industry in the national, regional and
global context tables and graphics for data,
surveys, international comparisons, etc.
Situation analysis
A small number of selected issues should be
identified, prioritized, and analyzed in
preparation for designing policy action
Policy issues
A large matrix that pre-specifies actions,
sub-actions, expected output, success criteria,
deadlines, and responsible organizations
procedure for monitoring and reporting should
also be specified. Alternatively, a monthly
high-level committee chaired by top leader, or a
well-focused and well-coordinated budgeting and
project approval process may substitute the
action plan matrix.
Action planoraction mechanism
Comparison of Master Plan Structure
Issues in Industrial Strategy and Action Plan
  • Country ownership
  • Stakeholder involvement
  • Inter-ministerial coordination
  • Quantitative targets
  • Methodology of policy formulation
  • Action Plan format and details
  • Review and adjustment

Country Ownership
  • Some countries (Vietnam, Thailand, Ethiopia) have
    strong policy ownership while others are largely
    donor-driven (Cambodia, Tanzania, Mozambique).
  • Policy ownership depends on leadership quality,
    existence of clear national goals, and degree of
    aid dependency.
  • Strong ownership does not necessarily guarantee
    good policy. Donor management and policy quality
    are two separate issues (cf. Vietnam).

Stakeholder Involvement
  • Key stakeholders in industrial policy are
    business community (primary, both local FDI)
    and donor community (secondary).
  • Stakeholders should be engaged throughout policy
    design, implementation, review adjustment.
  • Policy improves as stakeholder engagement is
    broadened Top-down orders ? Multiple
    interactive channels ? Private-sector led
    policy makingBut this shift requires strong
    private sector capability in parallel.

Inter-ministerial Coordination
  • Different ways to ensure policy consistency
  • Powerful technocrat team under PM/President
    (Koreas Economic Planning Board, 1960s-70s)
  • Super-ministry approach (Japans MITI, 1960s)
  • Central coordination approach (Thailand under
  • Multi-layer approach (Malaysia)
  • ? Choose the style that fits your country
  • ? Strong leader alone is not sufficient
  • ? Role of donors as enforcer of coordination
    (Vietnam-Japan Joint Initiative)

Standard Policy Making Procedure
Top leader
1. Vision
2. Consensus building process
3. Documentation process
Set broad goals direction
Drafting work
Comments revisions
Finalize approve
Studies surveys
Stakeholder consultation
Ministries agencies
Regions localities
Academics consultants
5. The entire process is coordinated by a lead
ministry or agency.
Quantitative Targets
  • Most popular industrial targets are production,
    export, investment and localization.
  • Quantitative targets should be decided by private
    sector or by private-public consultation, not by
    government alone.
  • Trust between government and business community
    must be secured. If trust is low, numerical
    targets are counter-productive.

Three Dimensions ofNumerical Real-sector Targets
Time scope
Hard vs. soft
Legal order Indicative targets Business
plans by firms or industries Forecasts
Macro level (GDP, total export) Sectoral (manuf.
/agri./FDI Priv./SOEs) Industrial
level (garment, leather) Product level
5 to 10 years or longer 2 to 3
years Annual Monthly/quarterly
Methodology ofPolicy Formulation
  • Draftersofficials, experts, sectoral institutes,
    or joint task forces (including private sector).
  • Concise (targets-action plans--Thailand) or
    explanatory (background, intl domestic
    reviews, SWOT, orientation etc--Vietnam).
  • Sharply focused analytical (eg. value chain
    analysis) or bottom-up collection of many issues.
  • Government domain vs. market domain--how much
    should govt dictate (location, projects,
    markets)? This should be country, sector and time

Action Plan Format and Details
  • Different ways to create action plans
  • Detailed action plan matriceswhat, who, when,
    and monitoring criteria (Thai Auto M/P 1,
    Zambias TOH).
  • Multiple targets, with one or a few actions for
    each target (Vietnam-Japan Joint Initiative).
  • Broad targets only without action plan
    matrix--policy measures and funding are left to
    ministry or agency in charge (Thai Auto M/P 2,
    Malaysia IMP).

Review and Adjustment
  • Different ways to monitor and revise
  • A special team or consultant is appointed to
    review progress explicitly at agreed times.
  • Ministry in charge reviews (implementerreviewer).
  • Monthly or quarterly review committee, with
    participation of PM or relevant minister.
  • No or little review.(Excuses--broad targets are
    easy to monitor spend more time on future
    strategy than past review)

  • There are different ways to make strategies and
    action plansno one method dominates.
  • Proper method depends crucially on govt
    capability and the level of private sector

Policies for Reference
  • Automotive Master Plan of Thailand
  • Industrial Master Plan of Malaysia
  • Vietnam-Japan Joint Initiative
  • Triangle of Hope Project of Zambia
  • Growth Transformation Plan of Ethiopia

Thai Automotive IndustryThe Role of TAI as
  • Thai Auto M/P is drafted by Thailand Automotive
    Institute with inputs from industry and MOI.
  • TAI was established in 1999, an NPO with both
    private govt funding. It has 70 staff, of
    which 30 are engineers. It cooperates with
    related ministries 10 universities.
  • TAIs missions (1) policy study advice, (2)
    support the clustering of auto parts, (3)
    export promotion. It also runs a training center.
  • TAI has daily contacts with private firms and
    govt officials both formally and informally.

Thailand AutomotiveM/P 2007-2011
Drafting team at Thailand Automotive Institute
  • Vision 2011 ? 4 Objectives ? 5 Strategies ? 12
    Action Plans
  • Strong coordination by Mr. Vallop of Thailand
    Automotive Institute
  • Effective stakeholder networking FDI, local
    producers, government, donors
  • Process-based action mechanism annual budget
    and projects for implementing actions (no matrix)

Thailand Automotive Industry Master Plan
  • The whole process (about 1 year) is managed by
    Thailand Automotive Institute (TAI).
  • Goals are set by private firms no government
    approval is needed for final M/P.

Brainstorming agreeing on goals directions
Set up formal committee for drafting M/P
Subcommittees study identified issues
Human resource
CEO Forum FDI local firms Exporters MoI,
MoST, MoEdu Professors team (Chulalornkorn Univ)
M/P Steering Committee Organized by
MOI Businesses Officials Experts
M/P Drafting By TAI staff
Comment dissemination
Investment linkage
Thai Automotive Vision, 5 Strategies and12
Action Plans
VisionAsias auto production base with
value-added and strong parts industry
Source Thailand Automotive Institute, The
Automotive Industry Master Plan 2007-2011
Executive Summary, p.4.
Industrial Master Plan of Malaysia
  • Vision 2020, set by Former PM Dr. Mahathir in
    1991, remains the overarching national goal.
    Malaysia aims to become a fully developed
    country by achieving 9 challenges
  • National unity, confidence, democracy, moral
    ethics, tolerance, science technology, caring
    culture, economic justice, and prosperity
  • Vision 2020 is general and vague. It must be
    concretized by rolling and overlapping policies.

Malaysia, Cont.
  • Economic Planning Unit (EPU) under PM drafts
    Malaysia Plan (5-yr Plan) Outline Perspective
  • Ministry of International Trade and Industry
    (MITI) drafts Industrial Master Plan.
  • Industrial Master Plans
  • IMP1 (1986-1995) acceleration of manufacturing,
    efficient use of local resources, local technical
  • IMP2 (1996-2005) for 8 industrial clusters,
    raise and broaden Malaysias position in value
  • IMP3 (2006-2020) strengthen many aspects such
    as SMEs, HRD, ICT, marketing branding,
    logistics etc.

Multi-layered Model Malaysia Organization for
drafting Industrial Master Plan 3
Total 338 members advisors
Malaysia Drafting of Industrial Master Plan
2006-2020 (IMP3)
IPC Industrial Planning Committee (headed by
MITI Minister)SC Steering Committee (headed by
MITI high official)TRGs Technical Resource
Groups (headed by various experts)
Business opinions reflected through TRGs and
Malaysias IMP2 (1996-2005)
  • 453 pages (English) with the following chapters
  • - Overview analytical framework (first 2
  • - Analysis proposals for 8 indust. clusters (8
  • - Directions institutional framework (last 2
  • Malaysian Institute of Economic Research (MIER)
    drafted a background paper, which gave IMP2 a
    lucid academic style (but not IMP3).
  • Possible problems (1) sectoral coverage is too
    wide, (2) method is too mechanical and uniform,
    (3) full-set industrial promotion is against
    globalization and specialization.

Malaysias Cluster-based Industrial Development
and Manufacturing
  • Malaysias IMP2 (1996-2005) aimed at raising
    and broadening the value chain.

Leveling up of each industrial cluster -Core
production -Supporting industries -Supporting
services -Human resources -Logistics -RD
Vietnam-Japan Joint Initiative
  • Purpose Improve Vietnams investment climate to
    become an attractive investment destination
  • Background (1) Japan is the largest implementer
    of FDI and largest donor in Vietnam (2)
    Govt-private dialogue (2) Vietnam joins WTO in
  • Scheme (1) Action Plan is agreed by VN govt,
    Japanese govt, and Japanese private
    companies.(2) Monitor progress and announce
    final result.
  • Phase 1, 2003-2005 (44 items, 85 achieved)
  • Phase 2, 2006-2007 (46 items, 93 achieved)
  • Phase 3, 2008-2010 (37 items)
  • Phase 4, 2011-2012 (70 items, ongoing)

Procedure for Action Plan Vietnam-Japan
  • 1. Japanese Business Associations in Vietnam
    identify problems and study support measures.
  • 2. Bilateral dialogue to agree on problems and
    solutions (two governments Japanese FDI)
  • 3. Agree on Action Plan
  • 4. Execute Action Plan
  • Vietnamreview/adjust laws and regulations
  • JapanODA support
  • 5. Monitor Action Plan
  • Interim monitoring (one year later)
  • Final monitoring (two years later)

Organization for Action Plan Vietnam-Japan (Phase
Japanese Side
Vietnamese Side
J.Embassy,JICA,JETRO in Vietnam
Ministry of Planning and Investment (MPI)
Japanese Bus. Assn. (HN/HCM) WT1 Power supply
WT2 Labor market WT3 Macroeconomy WT4
General (SI, IPR, customs) WT5 Retail
distribution WT6 Infrastructure
Govt Office M of Finance M of Industry Trade M
of Sci/Tech
M of Transp M of Post/Tel M of Resource M of
Justice M of Labor
A/P Drafting MonitoringVietnam-Japan
Drafting Action Plan
Monitoring Action Plan
Joint Committee headed by Japanese
ambassador Keidanren chairman MPI Minister Task
Force headed by MPI Minister GD attended by
Japanese Bus. Assn. Japanese Consultants Hearing
from companies Preparing action plan draft
Evaluation Committee headed by Japanese
ambassador Keidanren chairman MPI
Minister Monitoring Committee headed by MPI
Minister GD attended by Japanese Bus.
Assn. Task Force headed by MPI Secretary
DGD attended by Japanese Bus. Assn.
Action Plan Format Sample
  • (Phase I, Item 29) Adoption of international
    accounting standard (total 2 pages)
  • (1) Current statusExplanation of current
    situation and citation of relevant laws
    regulations (2 paragraphs)
  • (2) Issues raised by enterprisesGap between
    local and global accounting system adds cost and
    ambiguity, etc (2 paragraphs)
  • (3) Views expressed by Vietnamese GovtStatement
    of proposed law revisions and future direction (2
  • (4) Concrete solution measures
  • 1. Clarification of all accounting and auditing
    standards and integration into international
  • 2. From 2004, PR implementation of Accounting
  • Common deadline Action within 2 years

Reasons for Success
  • Excellent bilateral relationship between VN JP
  • High level political involvement
  • Public Private Partnership
  • Commitments with a deadline on Action Plan and
  • Support by ODA for implementing Action Plan
  • Openness and transparency of the result
  • (Cited from the presentation of Mr. Kyoshiro
    Ichikawa, Senior Investment Advisor JICA
    expert, Hanoi, Dec. 2007)

Triangle of Hope Project in Zambia
  • This project can be considered a mix of Malaysian
    IMP and Vietnam-Japan Joint Initiative.
  • Request by President H.E. Mwanawasa to JICA
    President Mme. Ogata for Asian Tiger
  • Project name Strategic Action Initiatives for
    Economic Development (Jul.2006-Mar.2009) with
    JICA support, in line with TICAD growth agenda.
  • Energetic Malaysian consultant J. Jegathesan
    galvanized Zambian Cabinet and led this project.

Triangle of Hope in Zambia -Key Project
  • 1. Investment climate improvement
  • Cabinet ?Steering Committee ?12 Task Forces
  • - Large Action Matrix with expected output,
    deadline, ministry in charge, and performance
    status (by color)
  • - Monitored by Steering Committee headed by
    President Advisor Dr. Musokotwane
  • - Progress regularly reported to Cabinet
  • 2. Multi Facility Economic Zone for receiving FDI
  • - FDI marketing missions sent to Malaysia,
  • - Malaysian firm (KLIM) to build MFEZ
  • 3. Strengthening of Zambia Development Agency

Action Plan Matrix (Zambia)
Triangle of Hope Project, Zambia, 2007 (excerpts)
  • This approach requires much effort in
    constructing and monitoring the matrix. It is
    suitable for countries lacking strong industry
    leaders or hub organizations.
  • Effective mechanisms for drafting and monitoring
    must be established.

EthiopiasGeneral Policy Orientation
  • Strong policy ownershipvisions and strategies
    are homemade, not externally imposed.
  • Strong state guides the private sector away from
    rent seeking and toward productive investment and
    technology acquisition.
  • Internalizing skills and technology is top
    prioritytraining, technology transfer and
    maximum local procurement are required of
    industrial projects.
  • Expansion of policy scope as policy learning
    proceedsfrom simple incentives for a few export
    products to broader support for more sectors with
    more policy tools.

Growth Transformation Plan 2010/11-2014/15
(Note Numbers in parentheses indicate the number
of pages in the English edition.)
GTPs Visions, Objectives and Strategic Pillars
Ethiopias vision to guide GTP To become a country where democratic rule, good-governance and social justice reign, upon the involvement and free will of its peoples, and once extricating itself from poverty to reach the level of a middle-income economy as of 2020-2023.
Vision on economic sector Building an economy which has a modern and productive agricultural sector with enhanced technology and an industrial sector that plays a leading role in the economy, sustaining economic development and securing social justice and increasing per capita income of the citizens so as to reach the level of those in middle-income countries.
Objectives 1. Maintain at least 11 growth and attain MDGs 2. Education and health services for achieving social sector MDGs. 3. Nation building through a stable democratic and developmental state 4. Stable macroeconomic framework
Strategic pillars 1. Rapid and equitable economic growth 2. Maintaining agriculture as major source of economic growth 3. Creating conditions for the industry to play key role in the economy 4. Infrastructure development 5. Social development 6. Capacity building and good governance 7. Gender and youth
The Industry Section of GTP(Section 5.2)
  • Past five yearswhile real GDP growth was 11 per
    annum, industry grew only 10 against targets of
    11-18. Industrys share in GDP stagnated around
  • Past five yearsthree targeted exports (leather,
    garment, agro-processing) did grow, but still
    small at 115m (3.8 of total export) in 2009/10.
  • According to GTP, industry should play a key role
    in the economy. Industrial growth should
    accelerate over time with average annual growth
    of 20.0-21.3. GDP share at end point should be
    23.7-16.9 (base case high case).

The Industry SectionFour Strategic Directions
Major Targets (Selected)
Risks Issues withEthiopian GTP
  • Issues that GRIPS/JICA raised are not reflected
    in textquality over speed or quantity focus on
    skills technology kaizen
  • Sub-sectoral numerical targets are too many and
    too rigid (they should be indicative, not
  • Policy making procedure organization are weak
  • Our proposal (i) national committee (ii)
    planning agency (iii) policy think tank.
  • Ethiopia needs additional policy to energize
    private dynamism (national movement for mindset
    change). Institutionalization of kaizen should be
    the key.
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