Strengthening Institutional
Conditions:
Interventions on the Meso-Level
to Develop the Private Sector
Ingrid Fromm
Haikou, November 8, 2004
Contents
„
„
Introduction: The Meso-Level
International Organizations:
UNDP
„ ILO
„ UNIDO
„ World Bank
„
„
Impact on Poverty Reduction
Example of Meso-Level Intervention
„
Conclusion
„
Introduction
„
„
„
Private Sector critical element, growth catalyst
Employment, income for the poor
Sustained private sector growth requires sound,
functioning policies and institutions
Incentives for
investment
Increased
Productivity,
Growth
Policies, Institutions
Poverty Reduction
Institutions
Policies
Macro-Level
•Ministry of Finance
•Central Bank
•Fiscal Policy
•Monetary Policy
Meso-Level
The Meso-Level
•R&D Centers
•Education and Training
Institutions
•SME Promotion Agencies
•Development Banks
•Chambers & Associations
•Foundations, NGOs
•Technology Policy
•Regional Policy
•Trade Policy?
•Environmental Policy?
UNDP
„
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„
Meso-level: Facilitator of
skills, knowledge, finance,
playing field
These conditions are
pre-requisites for growth
“Means to an end”
strategy – Millennium
Development Goals
UNDP
Broker/Facilitator
Engagement with Private
Sector :
(between business sector,
stakeholders, development
partners)
Partner, in concrete
initiative with organizations
„
„
China – UNDP works closely with businesses and
business associations
Federation of Chambers of Commerce – training,
intellectual property rights
ILO
„
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„
Dedicated to promotion
of social justice, human
and labor rights
Meso-level: institutions,
policies, rules provide
structure
Framework construction
UNIDO
„
„
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„
Industrial development requires private sector
growth
Private sector development one of UNIDO’s 8
service modules
Support institutions in a cluster must provide
assistance: Joint activities
Goal: enhanced productivity, better quality,
improved skills, lower costs, larger sales volumes
UNIDO
Research Institutions
MESOLEVEL
Financial Institutions
Business Associations
Civil Society Organizations
World Bank Group
„
„
„
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Private Sector Development Strategy -- 2002
Intervention through specialized institutions: IFC,
IDA, IBRD
Improving investment climate, institution building,
governance, legal and regulatory systems, financial
sector policies
Policies: private initiative and regulatory framework
required for private sector development
World Bank Group
„
„
Shift to creating an enabling environment
This is reflected in their work:
Growing importance of non-financial support
„ Shift away from direct support to enterprises to working
with intermediaries
„ Focus on the enabling environment
„
„
„
Capacity Building
Partnerships
Impact on
Poverty Reduction?
Is it plausible to analyze the meso-level and its
effects on poverty reduction?
„ How can this be achieved?
„ Example meso-level intervention Chile
„
Example: Chile
„
„
„
Fundación Chile created in 1976
Private, non-profit
Mission: Promote innovation, technology transfer,
management
Business development & job
opportunities to improve the
quality of life
Example: Chile
„
„
„
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1980’s Æ Creation of
two salmon farming
companies
Industry’s boom in the
country
In 1981 Chile produced
17 MT
2002 – 1439 MT (35%
world production)
Example: Chile
Poverty Reduction in Chile’s 10th Region
Not Poor
Poor
Indigent
Conclusion
„
„
Fundación Chile’s intervention: Industry Pioneer
Strengthening institutional conditions requires:
Rule of law
„ Fight corruption
„
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„
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Do interventions on the meso-level represent
genuine reform?
Is the problem of policy coherence addressed?
How can we gauge policy performance at the mesolevel where economic growth is concerned?